Boca Raton community recovers from housing collapse [1-5-16]
Article Courtesy of The Sun Sentinel
By Paul Owers
Published January 3, 2016
The mood is mostly upbeat these days at Royal Poinciana Townhomes in Boca Raton. After years of uncertainty, residents there finally have stability.
“Now they’re in control of their own long-term plan,” real estate broker Jim Balistreri said.
Balistreri Realty and Brenner Real Estate Group said they have sold the last 31 units in the once-struggling gated community north of Yamato Road off Dixie Highway. The 90-unit Royal Poinciana is sold out and finally in the hands of the homeowners’ association.
Planned during the later stages of the housing boom, the project hit the market in 2007, in the midst of the worst downturn since the Great Depression.
The developer, New Century Hidden Valley, ultimately lost the complex in foreclosure with about half of the units unsold. A bulk buyer stepped in two years ago, bought the available units and rented them out until buyers returned to the market.
The two-, three- and four-bedroom townhomes, with Spanish Colonial facades and wide floor plans, originally were marketed as luxury properties.
The most expensive units were priced in the low $600,000s, even though there are no water views or big backyards. The only shared amenity is a swimming pool, and the development sits next to train tracks.
“I think this is an example of the over-exuberance of the condo boom in the last decade,” said Jack McCabe, a housing analyst in Deerfield Beach. “A lot of developers were sold on the notion they could build luxury properties anywhere. But they didn’t understand the marketplace or timing.”
In May 2013, Sabal Financial Group, an investment firm in Newport Beach, Calif., bought the unsold units in bulk for $11.4 million.
“There was a period there when people didn’t know what was going on, and there wasn’t a lot of information available,” said Peter DeVilliers, president of the homeowners’ association. “Then we heard that there had been a bulk sale, and none of us understood what a bulk sale was.”
The plan, as they later learned, was for Sabal to fill the unsold units with renters and invest money in improvements until demand picked up.
Last fall, with buyers back in the market and prices steadily on the rise, Sabal hired Balistreri and Brenner to jointly launch a sales program for the remaining units.
Andrea Brenner, marketing director for Brenner Real Estate, said the firms established a sales center in one of the empty models. To their surprise, they had to keep moving as buyers came in and wanted that particular unit.
Although prices are still rising, Royal Poinciana values are nowhere near the previous highs. The 31 units ultimately sold in a range from $325,000 to $450,000.
“Even in today’s market, pricing is still important,” Balistreri said. “I don’t care how good it looks. It has to be well-priced. If it’s not, it won’t sell.”
The owners who bought at peak prices in 2007 likely are still “underwater” on their mortgages, and it may be years before they’re able to resell the units. Still, Balistreri said Royal Poinciana’s rebound is a microcosm of the housing market itself.
DeVilliers, the HOA president, said the board is going through its first budget process and starting to determine priorities. Some of the trees and landscaping look a little overgrown, and the HOA also hopes to reduce fees for owners by getting a better deal on insurance.
DeVilliers proudly points out that most of the development is owner-occupied now, and not a single home is for sale.
“There’s a lot of optimism and enthusiasm for the community,” he said.