Area vacancies down Rents up

Some real estate statistics, where “falling” and “low” are good news – Jupiter, Tequesta, Palm Beach Gardens and North Palm Beach apartment vacancy rates are at five percent, with 182 vacancies out of 3,608 units, according to a November 2010 through February 2011 survey compiled by L. Keith White, president of Reinhold P. Wolff Economic Research, Inc. in Ft. Lauderdale. The survey covered multi-unit apartment complexes.

“South Florida vacancy rates are as low as they have been in three years,” White said. “There’s demand for rentals, with the overall average rents up 3.3 percent from February 2010.

That rental rate increase followed two-percent declines in 2008 ad 2009, he said. “So, we’ve reversed that trend and it’s back to fairly normal now.”

The reason for the low vacancy rates and the rise in rental price are due to a “tremendous lack of new apartment construction as well as the apartment-to-condo-conversions that took place between 2002 and 2006,” he explained. “We lost thousands of units to conversions.”

Contributing to the demand for rentals are families who’ve lost their homes through foreclosure and short sales and can’t buy, as well as prospective homebuyers who’ve had difficulty in getting a loan, he said.

Another factor, investors buying homes and renting them, impacts the rental market, too, he said. “In Palm Beach County, February 2010, the vacancy rate was 5.1 percent. This year it’s at 5.3 percent.

“It’s a little bit of an increase, and if we didn’t have those single-family homes offered for rent, we would be near zero percent vacancy rate for apartments.”

Concerning leases, White forecasts that over the next two years, increases will be back to normal, “three percent, or four percent if new apartments are not built,” he said.

The days of incentives have declined, but are not over, he added. “When a new rental project is finished, it’s typical to offer one month off for the apartment to try to fill the project up quickly. But, when you are looking at existing projects that have been on the market for a while –no question that the incentives they offer have declined over the last year. And even though there are still some here or there, like offering two months rent, incentives are offered only on vacant units.”

According to White’s survey, average monthly rental rates for apartments in Jupiter/Tequesta/Palm Beach Gardens/North Palm Beach are $1,035 for a one-bedroom units, $1,235 for a two-bedroom units, and $1,467 for three-bedroom units.

Turning the focus to home rentals, Thomas Copeland, of Rental Plus and Camlet Copeland Realty in Jupiter, said, in the last six months, the demand is getting stronger, low inventory has held steady, and price is creeping up a little.

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This three bedroom, two-bath home, at 151 Wandering Trail in Jupiter, has tile throughout, an eat-in kitchen, family room, screened patio and a garage. The community, Indian Creek, features a pool, tennis and a park next door. Rent is $1,500 per month, unfurnished and it’s offered by Realtor Thomas Copeland of Rental Plus and Camlet Copeland Realty in Jupiter

“If the price is right, it’s gone within 30 days,” he said.

More than half of the people looking for rentals are looking in the low range, he noted. “Rentals in the $1,000-to-$1,200 range will get them a 900-to-1,000 square-foot apartment in Jupiter Village or Chasewood. About 20 percent of prospective renters are looking in the $1,500-to-$1,800 price range, which will get them about 1,200-square-foot apartment In Indian Creek. Abacoa has some units that start in that price range,” he said. Rule-of-thumb, you can expect to pay $1 per square foot for an unfurnished annual rental,” he added.

He hasn’t seen a flood of investor-owned rentals come on the market, but investors buying up good deals that can be used as rentals do help the market, he added.  “Investors can make money, with 10-to 20-percent down. Properties will carry themselves or give a short return of the capital investment. The cap rate is close to 10percent and you haven’t had that opportunity since the early 1990s.”

Concerning leases, he forecasts they will go up a little – up to five percent — in the next six months to a year. “It won’t be drastic,” he said. “But they’ve been stagnant for two years.”

Waterfront Properties agent Dan Uzzi Dan Uzzi said competition for rentals is “unbelievable.”

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Realtor Dan Uzzi with Waterfront Properties offers this three-story, three-bedroom townhome at 2411 San Pietro in gated Harbour Oaks, Palm Beach Gardens. It’s within walking distance to Downtown at the Gardens and local restaurants. The lease is $2,000 a month.

“I just rented a home. On Friday, there were nine properties that we had scheduled to see. By Monday, that number dropped to six.”

Most popular are unfurnished two- or three-bedroom homes in Abacoa or the Bluffs, or townhouses in Palm Beach Gardens running from $1,200 to $2,500 a month, he noted.

The typical renters are “families who’ve gone through foreclosure, young people not in the position to buy yet, or people who are scared of the market.”

Joe Quirk of Cobblestone Realty, LLC, said in areas he works with (Jupiter, North Palm Beach and Juno Beach), he continues to see a strong demand for rental properties, especially in Jupiter, north of Donald Ross Road, Abacoa and homes in the Jupiter High School district.

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This home at 182 Hampton Circle, Jupiter, has three bedrooms, two baths and a family room. It features tile and wood floors. The house is listed for $2,200 with Thomas Quirk, a realtor with Cobblestone Realty, LLC.

“There’s a good increase of families relocating because of Florida Atlantic University and companies like Scripps and G4S, which used to be Wackenhut. Its new headquarters in Abacoa opened in February and the company has 250 employees. That’s bringing into the area an increase of renters as well as new homebuyer prospects.”

Continued activities relating to foreclosures and short sales also impact rentals, as people with families leave their homes but rent in the same area because they want their children to stay in the same school districts, he added.

And “although rent prices have not changed much since last fall, they’ve maintained,” he noted.

“Spring Training brought in an exceptionally high demand for short-term, furnished, one- and two-bedroom units in Abacoa,” he said. “We were getting inundated with calls by Marlin players and administrative staff as well as fans. There weren’t enough rentals and people were going all the way north to Tequesta and south to West Palm Beach for rentals for February and March. Rates were $4,000 to $6,000 per unit, according to proximity to the stadium, and people have already locked up units for next year.”

Investors, meanwhile, are not flooding the market with rental units, he said. “I don’t anticipate that. Foreign investors, many of them Canadians, are buying foreclosures and fixing them up as second homes. They are not renting them out.”

written for palm2jupiter

New Construction in North Palm Beach County

New homes are being planned and projects are moving forward in the Palm Beach Gardens and Jupiter areas. How come?

At Frenchman’s Harbor in Juno Beach, heavy equipment is clearing land to make way for new home sites. On the Intracoastal Waterway and geared to boating enthusiasts, the community’s lots are being staked out, in preparation for single-family homes and carriage homes that will have a dock. Some of the larger homes will have docks up to a hundred feet to accommodate larger yachts.

Toll Brothers, a company that develops high-end homes, purchased the 77-acre track from WCI in June 2010 for $20 million. When the community is built out in two-year’s time, its 30 carriage houses will be priced from mid $600,000s and its 48 single family homes, priced from more than $1.5 million to a little less that $3.3 million.

Nearby, Toll Brothers has already developed Frenchman’s Reserve in Palm Beach Gardens, Jupiter Country Club and Ocean’s Edge at Singer Island — all still have available offerings. So, why did the company chose to develop this site.

“This is a prime location and there’s limited availability of homes backing up onto the Intracoastal,” explained Jason Snyder, assistant vice president of Toll Brothers. “We started accepting offers mid September 2010, and we already have five sales and two deposits. We are very happy with our progress and interest level.”

Although, nationally, builder confidence is low (the National Association of Home Builders’ Housing Market Index is 16. In the South, it’s 17 and HMI can range up to 100) some “pockets of optimism” do seem to be emerging, said National Association of Home Builders chief economist, David Crowe.

But according to February’s Commerce Department start numbers, those pockets are not very deep. Last year, builders broke ground on a total of 586,600 homes, just a tad better than in 2009 (554,000), making these two years the worse on record dating back to 1959.

Nationally, in January 2011,  permits dipped to 562,000, down 10.4 percent below the December rate, and 10.7 percent below January 2010.

In the county, though, one can catch glimpses of those pockets. According to MetroStudy, a Palm Beach Gardens research firm, home starts rose to 1,110 in 2010 from 941 in 2009 (But, that’s way down from its peak in 2003 with more than 10,000 starts).

Jupiter’s building department reports that it issued 229 building permits for single-family homes and townhomes between October 1, 2009 and Sept 30, 2010. During that time the previous year, they issued 164 permits.

In Palm Beach Gardens, 86 builders applied for permits to build single-family homes in 2010, over 77 in 2009 (That’s down from its heyday in 2005, when 313 permits were applied for in an eight-month period). If 2011 shapes up based on permits through February, it looks like 2011 will be busier, said the city’s building manager, Steven Kennedy. Based on 16 permits issued through February, he’s estimating maybe 90 to 100 permits will be issued by year’s end.

Although Brad Hunter of MetroStudy doesn’t see a V-shaped recovery, he does acknowledge that there’s been “a little more activity” in the Palm Beach Gardens and Jupiter area, and he sees “a gradual shape up.”

“You’ll see projects like Frenchman’s Harbor because it has a unique selling proposition, with all the properties having Intracoastal access,” he said, confirming Snyder’s explanation.

“Marisol is winding down – it’s running out of lots and Old Palm has new life with its new owners and properties are selling pretty well there. It will have more starts, but prices are high, so it won’t boost absolute sales and unit volume that much.

“I expect Abacoa will be the strongest producer in that area because it’s a successful master-plan community,” he said.

Old Palm Golf Club is platted for 302 residences on quarter- to one-acre lots on its 650 acres. About 140 families live in the community with 144 home-sites still available. Four builders’ homes and about 20 homes for resale are also available. Prices range from $1.5 million to $15 million.

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New home at Old Palm

The community’s selling points, according to Connie McGinnis, Old Palm’s director of sales, include low density as well as a private golf club that offers a high level of concierge services to its members as well as no waits for tee time.

DiVosta Homes is currently developing Abacoa Mallory Creek. When it’s finished it will have 263 single-family homes. So far, 159 homes are occupied. Fourteen homes are under construction and three are finished and vacant. The price range for single-family homes is $360,000-$600,000. Of the 326 town homes it will have when the community is completed, already 161 are occupied, 20 are under construction, and five are finished and vacant. Prices range from 230,000-$300,000.  Windsor Park, the final Abacoa community, will start in 2012 with 380 units planned.

“The overall land plan is brilliant,” said DiVosta director of sales Christopher Leimbach. “Jupiter and northern Palm Beach County are unique locations and the whole idea of Abacoa is based on New Urbanism with its interconnectivity to a downtown. It’s close to sports fields, spring training, and a golf course. People appreciate the sense of community and that friends and schools are in their back yards.”

written for palm2jupiter