Post by a. Pizzarelli on Jul 5, 2016 22:19:31 GMT -5
Originally Published December 15, 2015.
CLiCKE HERE for interactive Map
Dear Downtown West Palm Beach,
My name is Anthony Pizzarelli and I am a self employed active Florida Real Estate Broker since 2013. I began my Florida licensed real estate career in 1999. It's my belief most Downtown West Palm Beach condominiums are significantly undervalued.
I moved to Downtown WPB in 2001 and began to focus my full time professional real estate sales career here circa 2004. It was an exciting time locally with the success of Cityplace and new buildings seemingly going up everywhere. New inventories of property create extraordinary opportunities for real estate professionals. New vacant condos may need leasing and many people buy real estate from developers in hopes of reselling for a profit when the building is complete. Guess who’s going on a listing appointment and becoming a market leader? I did so well with my profession I earned the moniker Mr. Downtown West Palm Beach. The highlight of my 17 years of practice is a local burger joint anointing me my very own Mr. Downtown Burger. To say I have an interest and an affection for this town is an understatement.
When the real estate market and economy fell off the cliff in L8 ‘08 I was in full swing of my Mr. Downtowness. The Burger was yet to appear but the business was earning the beef. 13 years earlier I was on my own in a 15’ x 30’ trailer home on family friendly property. Fast forward just shy of 30 & I’m living penthouse style a few heartbeats away from Jerry Jones, Wayne Huizenga, Dan Marino, Donald Trump and Regis Philbin to name a few. Over the next several years the 1% income types had an attitude of survival and compassion for each other. I would hear stories of people I deemed fierce real estate sales competition cutting hair and moving to North Carolina for corporate gigs. If you’re a specialist of any kind you have role models in your field. I’ll never forget when one of mine who I was fortunate to work near pit stopped at my lil’ cubicle thingi and made a statement like “I’ve been in this business a long time and if you can make it through this market you could of made it through the worst of anything before it.” If Wall Street Journal can name that amazing person year in and year out within the top 100 agents of North America I may recognize her similar manners, tone and content of her conversations as a world class endorsement.
I picked up a great sales lesson early on; If you want to get rich, service the rich. To this day it astonishes me how so many local transactions occur in cash or under a cash term. When the economy fell off the cliff in L8 ‘08 I did a lil’ research and found 40%~ish of all year 2000+ condo owners had no mortgage. That’s right in the era of “count to 10” and get a $500,000 mortgage 4 out of 10 downtown West Palm Beach condo owners paid cold hard cash. Is it a coincidence that looking into the percentage of original owners still in the market today I’m finding the same 40%? What I’ve learned about strong money is they don’t take losses. In the years since the real estate shake up these 40% of owners worked on their tans, threw the keys to friends, rented the properties out or just left them vacant. The 40% Club paid almost two times as much as todays 2016 sales prices. The 40% Club is one of the main reasons to have confidence that the higher prices I am preaching are simply a matter of asking for them. The 40% club is your Downtown West Palm Beach neighbor and they have a very sincere interest in attaining higher property values.
Another reason why local values may be significantly higher than today's trade is marketing. That’s right marketing. According to Google marking is: the action or business of promoting and selling products or services, including market research and advertising.
Like all consumer goods condominiums are designed with as much emphasis on who will buy them as how they will be built. The products of Downtown West Palm Beach are designed for a certain style of consumer. The real estate market catastrophe of L8 08’ created new laws and practices (mainly short sales; time to federally delete that practice two years ago) allowing sales to occur outside the strict marketed boundaries condominiums and managed P.U.D.s are designed to perform within. Monthly maintenance fees are designed with property values in mind. A severe disconnect I am witnessing in DTwpb is maintenance fees being too high a percentage of asking prices. An avenue to higher local property values may be to adjust asking prices significantly higher and realign the designed maintance fee to property value ratio.
As an example the Slade has a maintenance fee of $800~ish a month on a condo that is selling today at a low rate of absorption for $250,000~ish. These 1,175sq ft style condos when adjusted for inflation originally traded as high as $658,800 and averaged circa $400,000 throughout the entire building. $800~ish a month MF~Fee is way too high for a $250,000 style property but at $400,000~ish the $800~ish feels more comfortable to the $400,000~ish capable/willing consumer.
I feel if Downtown West Palm Beach sellers who are on the market in buildings like Flagler Pointe, Slade, Prado, 610 Clematis, Metropolitan, The Edge, Courtyards & Tower @ City Place asked $250 to $400 a foot and stood firm cash term consumers will start to appear and absorb them finding confidence that all community sellers are demading similiar prices. In some cases I believe top floors in these buildings should fetch premiums of $350-$600 a foot. This is a Gr8 part of the narrative to remind you 50%~ish of sales occurring in our local market DO NOT use a mortgage to close. What sets us apart from so many other parts of the World is exactly this point. I tracked one year 70% of the entire downtown resale market traded in CASH. Don't worry about buyers who use loans to buy real estate for the moment. After a handful of cash deals close banks will start to loan in your building.
Rents impact property prices too. The more the rent, the more a property can fetch. The bad news is there’s a lot of new apartment rentals coming to the market. The good news is they’re a few years down the road. Now is the time to set rent rates that will distinguish your community apart from the bulk of apartment rentals to be here starting 2019~ish. There are a few here now. What’s Gr8 about these 1st few arrivals namely Loftin Place and Alexander Lofts is they may be used to gauge what proper market rents are. These are professional real estate operations and they have the best sense of what a market rent may yield. Rents have been strong for years yet in key DTwpb buildings rents are lagging like the prices. The average rents in Loftin Place and Alexander Loft are $2.20~ish a foot. So 1,000 sq feet may fetch $2,200 a month. These rent rates may and should be used to calculate rents in all DTwpb buildings. Supply in buildings is super tight so this is the perfect time to get your rental properties on the market 90-60 days before they’re vacant and ask a premium lease price.
There’s a wave of new development scheduled to come to DTwpb over the next decade which leads me to a basic economic reason to ask premium prices for your property now. There’s little supply today. The next new construction condominium won’t be here for 3, 4 more likely 5 years. Also, there’s a chance nothing gets built outside the Train Station related stuff because times are shifting in the real estate industry. Developers are pulling back in major markets and DTwpb has been a lil’ L8 to the recent Real Estate expansion that swept major markets like NY, Miami & Cali. That being said any new development project making it to our market will bring new awareness to our awesome town. New development projects spend lots and lots of money promoting their surrounding communities they are creating and guess what kind of consumer they’re targeting? Hint; they’re not broke.
Discerning customers won’t look at a product because it’s too cheap. Lets face it, a $50 dollar dinner may be as good as a $100 dinner but that $100 dinner has that little something extra making it feel ok to pay two times as much for essentially the same product. Downtown West Palm Beach condominium products were built with that same marketing flair. The good news for the DTwpb community beyond the market flair of “hey it's just worth it “ is the substance I've pointed out within this message.
Here may be my strongest point to undermine the entire DTwpb condo undervaluation narrative. The National Housing market has trended up since 2012. Our local condo values have not benefited as they could've due to poor coordination of subsequent condo sales. Visit your Downtown West Palm Beach Building of interest via www.MrDTwpb.net and notice two things:
1. The Case Schiller National Home Price Index located near the bottom of building specific pages.
2. Sales of 2/2 1,100 sq ft~ish units from 2013-2015 and their near refusal to cooperate with the upward national home value trends.
If you build it they will come. If you ask the right price people will pay it. People pay $1,000,000+ for 1Br properties and some of those same people happen to be bouncing around our little town which is why Downtown West Palm Beach is an extraordinary market and what I'm mapping out here may be more than just a theory.
#HappYReaLestate,
a.
561-670-3844
CLiCKE HERE for interactive Map
Dear Downtown West Palm Beach,
My name is Anthony Pizzarelli and I am a self employed active Florida Real Estate Broker since 2013. I began my Florida licensed real estate career in 1999. It's my belief most Downtown West Palm Beach condominiums are significantly undervalued.
I moved to Downtown WPB in 2001 and began to focus my full time professional real estate sales career here circa 2004. It was an exciting time locally with the success of Cityplace and new buildings seemingly going up everywhere. New inventories of property create extraordinary opportunities for real estate professionals. New vacant condos may need leasing and many people buy real estate from developers in hopes of reselling for a profit when the building is complete. Guess who’s going on a listing appointment and becoming a market leader? I did so well with my profession I earned the moniker Mr. Downtown West Palm Beach. The highlight of my 17 years of practice is a local burger joint anointing me my very own Mr. Downtown Burger. To say I have an interest and an affection for this town is an understatement.
When the real estate market and economy fell off the cliff in L8 ‘08 I was in full swing of my Mr. Downtowness. The Burger was yet to appear but the business was earning the beef. 13 years earlier I was on my own in a 15’ x 30’ trailer home on family friendly property. Fast forward just shy of 30 & I’m living penthouse style a few heartbeats away from Jerry Jones, Wayne Huizenga, Dan Marino, Donald Trump and Regis Philbin to name a few. Over the next several years the 1% income types had an attitude of survival and compassion for each other. I would hear stories of people I deemed fierce real estate sales competition cutting hair and moving to North Carolina for corporate gigs. If you’re a specialist of any kind you have role models in your field. I’ll never forget when one of mine who I was fortunate to work near pit stopped at my lil’ cubicle thingi and made a statement like “I’ve been in this business a long time and if you can make it through this market you could of made it through the worst of anything before it.” If Wall Street Journal can name that amazing person year in and year out within the top 100 agents of North America I may recognize her similar manners, tone and content of her conversations as a world class endorsement.
I picked up a great sales lesson early on; If you want to get rich, service the rich. To this day it astonishes me how so many local transactions occur in cash or under a cash term. When the economy fell off the cliff in L8 ‘08 I did a lil’ research and found 40%~ish of all year 2000+ condo owners had no mortgage. That’s right in the era of “count to 10” and get a $500,000 mortgage 4 out of 10 downtown West Palm Beach condo owners paid cold hard cash. Is it a coincidence that looking into the percentage of original owners still in the market today I’m finding the same 40%? What I’ve learned about strong money is they don’t take losses. In the years since the real estate shake up these 40% of owners worked on their tans, threw the keys to friends, rented the properties out or just left them vacant. The 40% Club paid almost two times as much as todays 2016 sales prices. The 40% Club is one of the main reasons to have confidence that the higher prices I am preaching are simply a matter of asking for them. The 40% club is your Downtown West Palm Beach neighbor and they have a very sincere interest in attaining higher property values.
Another reason why local values may be significantly higher than today's trade is marketing. That’s right marketing. According to Google marking is: the action or business of promoting and selling products or services, including market research and advertising.
Like all consumer goods condominiums are designed with as much emphasis on who will buy them as how they will be built. The products of Downtown West Palm Beach are designed for a certain style of consumer. The real estate market catastrophe of L8 08’ created new laws and practices (mainly short sales; time to federally delete that practice two years ago) allowing sales to occur outside the strict marketed boundaries condominiums and managed P.U.D.s are designed to perform within. Monthly maintenance fees are designed with property values in mind. A severe disconnect I am witnessing in DTwpb is maintenance fees being too high a percentage of asking prices. An avenue to higher local property values may be to adjust asking prices significantly higher and realign the designed maintance fee to property value ratio.
As an example the Slade has a maintenance fee of $800~ish a month on a condo that is selling today at a low rate of absorption for $250,000~ish. These 1,175sq ft style condos when adjusted for inflation originally traded as high as $658,800 and averaged circa $400,000 throughout the entire building. $800~ish a month MF~Fee is way too high for a $250,000 style property but at $400,000~ish the $800~ish feels more comfortable to the $400,000~ish capable/willing consumer.
I feel if Downtown West Palm Beach sellers who are on the market in buildings like Flagler Pointe, Slade, Prado, 610 Clematis, Metropolitan, The Edge, Courtyards & Tower @ City Place asked $250 to $400 a foot and stood firm cash term consumers will start to appear and absorb them finding confidence that all community sellers are demading similiar prices. In some cases I believe top floors in these buildings should fetch premiums of $350-$600 a foot. This is a Gr8 part of the narrative to remind you 50%~ish of sales occurring in our local market DO NOT use a mortgage to close. What sets us apart from so many other parts of the World is exactly this point. I tracked one year 70% of the entire downtown resale market traded in CASH. Don't worry about buyers who use loans to buy real estate for the moment. After a handful of cash deals close banks will start to loan in your building.
Rents impact property prices too. The more the rent, the more a property can fetch. The bad news is there’s a lot of new apartment rentals coming to the market. The good news is they’re a few years down the road. Now is the time to set rent rates that will distinguish your community apart from the bulk of apartment rentals to be here starting 2019~ish. There are a few here now. What’s Gr8 about these 1st few arrivals namely Loftin Place and Alexander Lofts is they may be used to gauge what proper market rents are. These are professional real estate operations and they have the best sense of what a market rent may yield. Rents have been strong for years yet in key DTwpb buildings rents are lagging like the prices. The average rents in Loftin Place and Alexander Loft are $2.20~ish a foot. So 1,000 sq feet may fetch $2,200 a month. These rent rates may and should be used to calculate rents in all DTwpb buildings. Supply in buildings is super tight so this is the perfect time to get your rental properties on the market 90-60 days before they’re vacant and ask a premium lease price.
There’s a wave of new development scheduled to come to DTwpb over the next decade which leads me to a basic economic reason to ask premium prices for your property now. There’s little supply today. The next new construction condominium won’t be here for 3, 4 more likely 5 years. Also, there’s a chance nothing gets built outside the Train Station related stuff because times are shifting in the real estate industry. Developers are pulling back in major markets and DTwpb has been a lil’ L8 to the recent Real Estate expansion that swept major markets like NY, Miami & Cali. That being said any new development project making it to our market will bring new awareness to our awesome town. New development projects spend lots and lots of money promoting their surrounding communities they are creating and guess what kind of consumer they’re targeting? Hint; they’re not broke.
Discerning customers won’t look at a product because it’s too cheap. Lets face it, a $50 dollar dinner may be as good as a $100 dinner but that $100 dinner has that little something extra making it feel ok to pay two times as much for essentially the same product. Downtown West Palm Beach condominium products were built with that same marketing flair. The good news for the DTwpb community beyond the market flair of “hey it's just worth it “ is the substance I've pointed out within this message.
Here may be my strongest point to undermine the entire DTwpb condo undervaluation narrative. The National Housing market has trended up since 2012. Our local condo values have not benefited as they could've due to poor coordination of subsequent condo sales. Visit your Downtown West Palm Beach Building of interest via www.MrDTwpb.net and notice two things:
1. The Case Schiller National Home Price Index located near the bottom of building specific pages.
2. Sales of 2/2 1,100 sq ft~ish units from 2013-2015 and their near refusal to cooperate with the upward national home value trends.
If you build it they will come. If you ask the right price people will pay it. People pay $1,000,000+ for 1Br properties and some of those same people happen to be bouncing around our little town which is why Downtown West Palm Beach is an extraordinary market and what I'm mapping out here may be more than just a theory.
#HappYReaLestate,
a.
561-670-3844