March 19, 2000
THE HOUSING MARKET BORDERS
By STEVE FRIESS
Joann Kern Peart was sure she'd made a $135,000
mistake. The Delray Beach native had just moved her family into
a 2,500-square-foot ranch home near Lake Ida, just west of Swinton
Boulevard and north of a decrepit, depressed downtown area along
The home, with green shutters and a white picket
fence on a sprawling corner lot, was built in 1955 and needed
work. But more significantly, Peart looked around and wondered
whether it was wise to invest in this neighborhood.
This was, after all, an area between Federal
Highway and Interstate 95, long considered the alley throughout
Palm Beach County most unlikely to succeed. Too close to busy,
noisy highways, not close enough to the beach, the critics said.
"When we first moved here in 1987, a lot
of us were thinking we'd made an error," said Peart, now
president of the Lake Ida Property Owners Association. "The
neighborhoods were shabby. But now everybody's fixing up, changing
things, redoing their rails or their porches. Everybody's painting."
It's also a boon for the property's value. More
than a decade later, with a tremendously successful Atlantic
Avenue revitalization project overhauling Delray Beach's once-downtrodden
image and a bustling U.S. economy providing a steady stream
of homebuyers enamored by Palm Beach County, Peart and her neighbors
find themselves sitting on a possible gold mine.
Peart's home is assessed by the county at $155,000,
but that's just because the county can't increase assessed valuation
on homestead properties by more than 3 percent a year unless
she sells or the home undergoes a major renovation. County appraisers
think Peart's property actually could fetch at least $229,000
on the market, and some of Peart's neighbors have sold similar
homes for almost $250,000. By the time Peart sells -- and she's
not planning to anytime soon -- her home easily could have doubled
in value, real estate experts say.
A special case? Not really.
A study by the Sun-Sentinel of assessed valuation
across south Palm Beach County, as well as a consensus of opinion
among dozens of Realtors and homebuilders, shows an exuberance
and optimism about Palm Beach County's housing market that borders
"We've never seen anything like this before,"
said Glen Trotta, owner of DiVosta Homes Corp., which recently
sold the last of 278 new lots in 2-year-old Hammocks Reserve,
west of Congress Avenue on Linton Boulevard. Some of those homes
are reselling at 15 percent mark-ups, records show. "The
demand for housing in this county is unbelievable, and I don't
see anything short of a major economic disaster that will keep
it from only getting hotter and hotter."
Several factors contribute to the good news,
from downtown revival efforts like that in Delray Beach to rampant
efforts to tear down older homes along the coast and rebuild.
The Boca Raton area continues to thrive on the back of its unbeatable
location along the Broward County line and the fact that the
steaming economy has created dizzying new personal wealth. Boynton
Beach and West Boynton are capitalizing on available vacant
land to provide working-class families with large, affordable
The proof is in the assessment numbers:
Only 164 of 2,533 subdivisions of single-family
homes in Palm Beach County saw their average assessed valuation
drop between 1998 and 1999. Most declines were due to homes
being torn down, thus lowering the assessments until they are
rebuilt, county assessment officials said.
More than 92 percent of the 184,755 single-family
homes on the tax rolls in both 1998 and 1999 saw an increase
in their valuation in 1999.
More than 96 percent of the subdivisions in
the region south of Lantana Road, which envelopes all of Boynton
Beach, Delray Beach and Boca Raton as well as the burgeoning
unincorporated communities west of those municipalities, rose
in average assessed valuation.
Countywide, assessed valuation on single-family
homes rose 3.5 percent.
County officials caution that assessed valuation
does not necessarily equate to the value of a home, and sales
figures do show there is a significant discrepancy between the
assessed and market values.
But assessed valuation does reflect trends in
home values, rising and falling most when houses are sold or
rebuilt and remaining steady when an area is in a stagnant era.
Dramatic shifts give observers clear evidence of changes in
"This is really a great time," said
broker Terry Eichas of Homes of Distinction Realty in Delray
Beach. "You pick an area, and it's doing well."
Delray Beach and Boca Raton
The most dramatic real estate turnaround in
Palm Beach County during the past decade is the revival of Delray
Beach. The city spent more than $20 million on new streets,
tax incentives for businesses and other renovations to turn
the city into a South Florida destination.
Whether that investment paid off for the city's
coffers remains a controversial question, but the boost to the
area's home values and utterly overhauled Delray Beach image
is an undeniable fact.
"North, east, south and west, East Atlantic
Avenue was great for everybody," Eichas said. "We
haven't seen an area that was left behind."
But some areas haven't benefited quite as handsomely.
Assessments on homes in the region surrounding the lower-income,
less-refurbished West Atlantic corridor from Swinton Road to
Military Trail rose 2.7 percent on average, far below the 10.8
percent jump in assessments for homes around Atlantic from Swinton
to the ocean.
Delray Beach enjoyed a 4.6 percent surge in
average assessed valuation for its single-family homes, a huge
year-to-year increase outpaced in Palm Beach County mainly by
luxury coastal communities like Palm Beach, up 11 percent, Manalapan,
up 9.6 percent, and Gulfstream, up 7.7 percent.
By contrast, assessed valuation in Boca Raton
rose 3.7 percent and in Boynton Beach, 3 percent.
"We just fell in love with downtown Delray
and decided to spend a little more for a little less,"
said Janice Gonzalez, who last year left a condominium in Hialeah
for a 1,200-square-foot home she bought for $77,000 in the Southridge
That 180-home area, south of 10th Avenue between
I-95 and Dixie Highway, saw assessments rise 3.5 percent in
1999. "My house needs a lot of work, but I believe in this
Wealthier folks also are lining up to live in
Delray and West Delray, shelling out millions for the more lavish
new properties that compete with Boca Raton communities. While
new subdivision builders once had to cajole and plead with the
Boca Raton branch of the post office to designate their area
in Boca and not Delray, "that line is now completely blurred,"
said Toll Homes marketing director Kathleen Murphy.
Toll Homes two months ago opened the sales office
of the 500-lot Mizner Country Club in West Delray to a flood
of interested buyers, including Marie Wendworth of New York
City. Wendworth and her boyfriend, whom she won't name but refers
to as her "Internet millionaire," visited Mizner,
at Lyons Road off Clint Moore, to consider building their $1
million dream home. They're not sold on Mizner yet, she said,
but she's seen enough to make her satisfied that "Delray
is just like Boca these days."
That's not to say Boca is hurting. Some of the
fastest-rising subdivisions in the entire county are there,
including Le Lac, Golden Harbor, Sanctuary and Addison Estates.
The $400,000-plus market isn't all that's thriving
Boca Rosa Heights, up 12.4 percent, and Boca
Raton Riviera, up 8.3 percent, are two of the many neighborhoods
priced between $150,000 and $250,000 east of I-95 and south
of Spanish River Boulevard to the Broward County line.
"Boca still has an amazing allure,"
said Jeffrey Winikoff, presidenl continue to rise no matter
While some analysts say that's an overstatement,
they also don't expect potential competition for new homes expected
to be built in the Agricultural Reserve to have much of an effect
on existing markets in Boca, Delray and along the coasts.
The Ag Reserve, a 21,000-acre region roughly
from Lantana Road to Clint Moore Road west of Florida's Turnpike,
is now largely undeveloped and mostly still in agricultural
use. Fearful that rampant growth would erase the farming culture
of Palm Beach County, the County Commission identified the area
for stringent development rules and passed a $100 million bond
referendum last March to buy land for preservation.
County commissioners have consultants designing
a vision for what type of development should go in the Ag Reserve.
The first draft was rejected this winter because it allowed
higher densities than some commissioners wanted and didn't do
enough to preserve agriculture. The aim now is to design a region
where there would be, at most, one unit per every five acres.
While commissioners continually insist the Ag
Reserve will be a place where people of all economic strata
will live, Realtors and builders insist the restrictions make
it a lock for the luxury market.
"A lot of projects will go up in the Ag
Reserve, but I don't see many new projects that are going to
be below a $200,000 average sale price anywhere south of Boynton
Beach Boulevard," said Timothy Hernandez, vice president
of land and marketing for Pulte Homes Corp.'s southeast Florida
Luxury home Realtor Al Curcio agreed, noting
the requirements that homebuilders dedicate 60 percent of their
property to land conservation in order to build on the other
40 percent. "If they keep the low density, it will only
increase the value of the property. Only the rich will be able
to live there, because who else could afford that?"
"Old house, new house new house, new house
old house, new house," rattles real estate broker David
Roberts as he cruises along a hole of a golf course in Boca
Raton's Royal Palm Yacht and Country Club in his 1957 Corvette
convertible. "It's an unbelievable thing that's happening
There, and almost anywhere you look along the
Intracoastal Waterway and the Atlantic Ocean in Palm Beach County.
Roberts' subdivision was built by Arvida Realty Co. more than
45 years ago along the Intracoastal south of Glades Road in
Boca Raton. Now it's being rebuilt, lot by double lot, by the
nouveau riche seeking more than the relatively ordinary ranches
first built there.
Roberts, 40, is a part of the trend. He spins
his Corvette around, trots up the road and halts in front of
some concrete walls and the crowd of construction workers piecing
together his dream home. He now resides in a nondescript 2,851-square-foot
home on the other side of the development, but a prosperous
career and a new family prompted him to go for more.
He has knocked down a 1,500-square-foot home
that he bought for $1.2 million in August 1998 to make way for
a 7,000-square-foot, $4 million mansion. Among the new amenities
he'll install: a four-car garage, a golf-cart garage, a circular,
two-story study with walls lined with bookshelves, a 60-foot-long
pool and a main spiral staircase.
Forty other lots, out of 750 in the subdivision,
are under similar construction in Royal Palm, with some families
buying neighboring multimillion-dollar homes only to knock one
house down and plant gardens while building something massive
next to it.
Such activity along the coast -- and, to a lesser
extent, in older luxury subdivisions farther west -- stuns and
delights observers. The sheer magnitude of some of the projects
is staggering, but "it's really the best way to keep the
areas desirable and new," real estate analyst Joanna Kopps
said. "What's surprising is how new some of the houses
are that are coming down."
Even homes that aren't demolished benefit from
the rebuilding going on next door, as seen in Delray Beach's
Seaspray Estates area. The cul-de-sac along the Intracoastal
just east of downtown Delray saw a huge boost in all land values
when one family replaced a 2,500-square-foot 1950s ranch home,
then worth about $300,000, with a 7,100-square-foot, two-story
gated palace of gabled roofs and elaborate décor now valued
at about $2 million.
William Jedlick, owner of a 1,400-square-foot
home across the street, saw his assessments jump $75,000 in
1999 thanks to that construction. Jedlick, who lives in Pennsylvania
and rents out the property, doesn't qualify for the homestead
exemption or the assessment increase caps set out in state law
for homestead owners.
The increase, which is accompanied by a surge
in property taxes, rankled Jedlick somewhat, but he also saw
the positive end of it.
"This land is becoming more and more valuable,"
he said. "That's only really a good thing."
If any housing in Palm Beach County has lost
value or remained stagnant, experts say, it's the senior housing
market, especially in the Boynton Beach and Lake Worth regions.
The granddaddy of such areas is Leisureville,
an 1,802-home area west of I-95 and south Boynton Beach Boulevard
where row after row of small, identical white homes stand before
neatly mowed postage stamps of lawns. Assessments rose an average
of only 1.8 percent in 1999 for the area, nearly half of Boynton
Beach's 3 percent gain in the same period.
Leisureville is a tranquil, well-kept neighborhood,
but the senior designation limits who can buy to people with
no children younger than 18. At least 80 percent of homeowners
must be 55 and older, and many of those who sell are prompted
by dire need, such as a death, instead of profit motives.
"We took a bath on my mother-in-law's house
there," said Fred Greene of Dania. "We let it go at
less than $60,000, but we had to do it quickly because she needed
the money to hire health aides."
Many of those who live in such areas aren't
looking to make big money, said Leisureville office manager
Betty Collins. Rather, they're seeking a specific lifestyle
to retire and relax.
"The people who are here and come here
love what we have here," said Collins, a resident for 14
years, noting the homeowners association paints the houses every
other year for the residents. "In the years I've been here,
I don't know anyone who left because they were unhappy here.
There's always an instance, like a spouse died or something,
but there are at least 100 people living here for 30 years."
Real estate agent Kathy Clarke, who has sold
in Leisureville for two decades, insisted property values "are
not stagnant by any means," claiming that in the past six
months she has witnessed a sudden pop in prices all the way
into the $80,000 range.
If so, that would be up from the $50,000 and
$60,000 prices the same homes were going for just a year ago,
but the county's most recent assessed valuation and market-value
figures wouldn't reflect such an uptick yet.
"The prices really have risen, and it's
a great demand area," said Clarke, of Century 21 Luxury
Homes in Boynton Beach. "It's really Boynton's best-kept
secret. There's not much for sale anywhere, so this is really
a hot seller in a really hot market."
Gail Brunetto, 37, was fed up with Tamarac.
Her townhouse in Inverrary was nice enough,
but the traffic heading 14 miles to work at First Union Bank
in Pompano Beach was "becoming the biggest nightmare."
Brunetto and her boyfriend decided to search
for a house in Broward County.
They found little in the size, 1,800 square
feet, and the price range, up to $140,000, they sought.
"When we went out and looked at these properties
in Broward, the only things we could find in our price range
were these very old, old homes that needed a lot of work,"
Brunetto said. "It just couldn't compare to what we found
in Palm Beach County."
The search took them a bit farther north than
they expected because Delray -- once a working-class family's
refuge -- is now too expensive, she said. Eventually, she settled
on a 5-year-old, 1,600-square-foot house in the Charleston Shores
subdivision, about four miles west of Florida's Turnpike off
"At first I thought, `My God, it's 40 miles
to work from here,'" Brunetto said. "But it really
takes about the same amount of time to get me there. I just
pop in a CD, hop on the turnpike and I'm there."
It's that attitude that has Realtors and builders
still convinced that Boynton Beach will be a haven for years
to come for middle-class homeowners wishing to live in Palm
Beach County and work in Broward.
"The Boynton Beach and Lake Worth areas
are by far the best deals in Palm Beach County," said Kathlein
Ambridge, owner of Boynton Beach-based Destination Realty.
Delray used to be attractive to this group,
but now Delray is almost as expensive as Boca. So there's Boynton,
where they can buy the dream home they couldn't dream of."
With Broward County fast approaching build-out
-- there will be nothing new left by 2015, and north Broward
cities like Coral Springs will be finished by the end of this
year -- land values south of Palm Beach County are expected
to skyrocket. Boynton and Lake Worth are expected to benefit
most from that shift, promising current homeowners an impressive
return on their investment, Ambridge and others insist.
Some competition is coming from the Jupiter
Farms and Royal Palm Beach areas, analysts say, now that the
MacArthur Foundation has sold off 14,880 undeveloped acres to
For many, Boynton Beach and Lake Worth remain
the outer boundary of how far north they're willing to live.
Any farther north, say past West Palm Beach, and homeowners
say they'd feel divorced from Broward County altogether.
"It's almost like a boundary," said
Brunetto. "Lake Worth is tolerable. Anything farther than
that area and you might want to move your employment to West
Palm Beach as well."
Brunetto noted that since her new neighborhood
in Lake Charleston is not a 55-and-older area but will someday
be surrounded by them, she's likely to see her land values increase.
With a school just down the block and a scarcity
of neighborhoods for parents with young children, Brunetto's
home will be among the most desirable.
"It's not that I planned it out that way,
but I do think that will happen," she said. "I just
loved this house, so we purchased it. A lot of people buy homes
as an investment, but I was mainly figuring I would not be taking
a loss in my investment. Now I see I should do pretty well,
Brunetto said she loves the fact that her new
home is somewhat isolated -- for now.
"I know there's going to be a lot of development
up here because we see the trucks and all the building,"
she said. "But at least this gives me a couple of years
of peace, anyway. I mean, no matter where you go in Florida,
eventually you're going to get overrun."
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