Report: Condo development lagging in Palm Beach, Broward counties

The housing market is brutal on homebuyers in Broward and Palm Beach counties. Getting into a condominium in either county isn't any easier.

And it doesn't look like the situation will change anytime soon.

"Condo listings don't stay on the market for more than a few days," said Beverly Rothstein, an agent for Galleria International Realty in Fort Lauderdale. "Clients are asking me, 'What can I do, other than begging?'"

There's very little help on the way in the form of new construction. Only 583 units are currently under construction in the two counties and builders are planning only about 4,200 units during the next few years, according to, a Bal Harbour-based consulting firm.

That's not much, especially with demand on the rise.

"Thus far, many developers are ignoring Palm Beach and Broward," said Peter Zalewski, principal at CondoVultures. "It seems we could be headed for a situation where bidding wars will keep going higher and higher because of a lack of product."

South Florida condo prices plunged by more than 60 percent during the collapse. Thousands of unsold units left developers reeling. The Related Group of Miami, for instance, handed back several projects to lenders, including Trump Hollywood.

Once condo prices dropped well below $100,000, investors returned to the market to buy and rent out the units. With the supply virtually depleted, prices are rising quickly.

Broward's median price for existing condos in May was $108,000, a 28 percent increase from a year earlier, according to the Greater Fort Lauderdale Realtors. There were 1,656 sales last month, up 9 percent.

Palm Beach County's median was $119,000, a 21 percent jump, the Realtors Association of the Palm Beaches said. The county saw 1,581 condos change hands, 9 percent more than April 2012.

A relative lack of international buyers is the main reason condo builders have been reluctant to enter the two counties, market observers say.

For all the construction that occurred during the early part of the last decade, Broward and Palm Beach counties remain traditional bedroom communities, said Jonathan Gelman, a real estate lawyer and shareholder with Greenberg Traurig in Fort Lauderdale.

"Without the strong interest in the Broward and Palm Beach markets from foreign buyers, you're not going to have as much pressure to build condominium units there," Gelman said.

Although most existing condo sales are for cash, foreigners are more willing than domestic and Canadian buyers to fund new construction by putting down payments of 50 to 80 percent before closing, Zalewski said.

The concern among domestic and Canadian buyers is whether the condos will ever get finished, while buyers from abroad don't seem to have that worry, he said.

During the housing boom, buyers put down only about 20 percent, and sometimes less. When the market tanked, construction financing dried up, forcing many condo builders to require the hefty deposits.

"We like this model," said Carlos Rosso, president of the condo division for Related. "More cash leads to a more stable market."

Related has five projects under construction across South Florida, including sold-out Apogee Beach, a 49-unit building not far from Trump Hollywood. The luxury project is expected to open later this summer.

Related also is building BeachWalk, a condo and condo-hotel development in Hallandale Beach. The developer broke ground recently and says it has more than 85 percent of the 300 units reserved.

Most of the new condos in Palm Beach County are proposed for West Palm Beach. A 100-unit luxury project is planned for part of the First Baptist Church's Flagler Drive property, and 200 units are under construction at the President Country Club.