By R.S. Pollack
Boca Raton Magazine
For Randy and Kelly Sikora, timing was everything when it came to finding a new home. The young couple was living in a house three blocks from the ocean when they decided two years ago to move to a neighborhood with lots of kids and bigger yards. The Sikoras sold their Boca Riviera home for $345,000 - $140,000 more than they paid three years earlier. For the couple, things just kept getting better.
With their eyes on family-friendly neighborhoods, the Sikoras and their real estate agent Chrissy Biagiotti were looking at homes in some of the community’s hottest neighborhoods when they came upon a house in Boca Bath & Tennis that had everything they wanted - for $345,000.
“I never thought I would live on the other side of I-95,” says Sikora, who owns Twister Gymnastics and Cheer, a gymnastics and cheerleading school for youngsters. “We just stumbled on a really great deal.”
Now, less than two years later, the value of the Sikora’s home has skyrocketed even higher.
“There’s nothing in here now under $650,000 to $700,000,” says Randy Sikora. “It’s to the point where I couldn’t afford to move into my house today?”
And the Sikoras are not alone. Throughout South Florida, as well as much of the country, homeowners have seen the values of their homes jump significantly due to the drop in interest rates, an increase in home values up North and a continued steady migration to the Sunbelt by younger families who are joining the established retiree population.
While local real estate agents suggest the demand for high-priced houses may be cooling—signaling a slowdown in escalating property values— homeowners throughout many Boca Raton neighborhoods beg to differ as they watch their home values double and triple in just four or five years.
For example, in the Bel Marra section of Boca Raton, east of Federal Highway, a typical three-bedroom, two-bath home near the water that sold for about $260,000 in 1996 more than doubled in price six years later, selling for $570,000 in 2002.
Over in Delray Beach’s Sherwood Park neighborhood, a home on almost a quarter of an acre that was purchased two years ago for $260,000, sold recently for $340,000, an increase of about 30 percent.
And in Tunison Palms, near Boca’s Old Floresta, a small four-bedroom home with a pool that sold for $156,000 in 1998 sold for close to $250,000 three years later—a 60 percent increase.
And while people in the real estate business may not agree on which neighborhoods are the hottest, all say location determines the difference between an increase of 10 percent or 100 percent. And right now, experts say values are increasing most near the Intracoastal and ocean.
“They don’t make waterfront property anymore;” says Palm Beach County Property Appraiser Cary Nikolits, who has been keeping an eye on real estate values in the county for more than 25 years. Nikolits says that knowing what he knows today, he would have bought a home on a barrier island five years ago for the greatest return on his investment.
Property values in upscale inland communities such as St. Andrews Country Club, Woodfield Hunt Club or even Boca Bath & Tennis have also risen steadily; the Sikora’s experience is a case in point.
“I don’t see any part of Boca Raton that’s suffering;” says Nikolits, adding that property values throughout Palm Beach County as a whole have increased about 18 percent during the last year, which is in line with the statewide average. In the last five years alone, home values statewide have risen about 50 percent, according to the Florida Association of Realtors.
In our neck of the woods, Nikolits says the hottest areas of the county are Boca Raton and Delray Beach in the south and Jupiter and Palm Beach Gardens in the north.
When it comes to golf course communities and condominiums, however, rising home values depend on things like the age of the community, its amenities and maintenance fees. For example, an older condominium in line for special assessments to improve an aging clubhouse is not going to have the allure of a brand-new luxury condominium on the beach.
On the water and on the east side, those factors don’t seem to come into play as much, because in many cases, it is the land—not the home—that people are after.
These days, as the tear-down phenomenon continues to roll through waterfront communities, homeowners are finding buyers willing to pay twice as much as a few years ago to tear down an existing house and put up a larger one.
“The best value is to buy on the water without improvements;” says Barry Barringer, of the Barry Barringer Team at Remax Advantage Plus. “I have doubled my value on waterfront property that I bought in 1996?”
Six years ago, Barringer bought a typical three-bedroom/two-bath ranch-style home that sat on a finger lake in the north end of the city for $258,000. He sold it in February 2002 for $510,000.
Barringer says anything on the west side of the Intracoastal Waterway, from the Sanctuary all the way up to Tropic Isles in Delray Beach, has in many cases doubled or tripled in value.
And it can all be attributed to the laws of supply and demand.
“Everyone is sitting in Chicago or somewhere else up North saying “I want to live on the water; Barringer says. “But there’s only so much land on the water.”
He says basic Florida 1960s ranch-style homes in neighborhoods like Lake Rogers are selling for as much as $1 million. Six or seven years ago those homes were selling for $300,000.
“It’s the dirt that’s worth the million dollars;” Barringer says. And where are people getting the $1 million to buy some of those lots? Nikolits, the property appraiser, says one of the driving forces behind the increase in home values here may be the dramatic increase in home values up North. “It’s the market throughout the country that’s driving our market here,” he says. “In the Northeast, people are getting more for their homes and they’re coming down here and buying homes here.”
David Roberts, of Coldwell Bankers’ Royal Palm Properties, says in some neighborhoods, such as Royal Palm Yacht and Country Club, some homes are being bought by neighbors who see the value of investing in real estate and the potential for expanding their own homes.
“Property is so precious;” he says.
But Royal Palm’s popularity, and subsequent increase in value, may be as much about its location east of U.S. 1 as its proximity to the water.
“It wasn’t that long ago that there was a migration from east to west,” Roberts says. “Now there is a migration from west to east. East is just so convenient.”
And it’s not just convenience. For many, the eastside allure can be the charm of an older house in Old Floresta or the affordability of a house in Boca Square.
“Anything on the coastal side of town, from Fort Lauderdale north, is going to be hot,” says David Aucamp, a partner in the appraisal and consulting firm of Aucamp, Dellenback and Whitney in Boca Raton.
Aucamp says in neighborhoods like Boca Villas behind Mizner Park, homes that went for $80,000 or $90,000 a few years ago are now being sold for $250,000 to people who are interested more in the land than the house.
“East is where people want to be;” says Alec Domb, the president of Boca Raton’s Gallery of Homes.
One reason people want to be in areas like east Boca, says Chrissy Biagiotti of Gordon Realty, is value.
“In areas like Palm Beach Farms and Old Floresta, you have bigger lots,” Biagiotti says. And that goes for the area behind City Hall, Spanish Village, where Biagiotti and her family had their first home. Today the value of that home, which sold for $90,000 a decade ago, has just about doubled, even though the house itself has only 1,400 square feet.
The abundance of good size lots—a quarter acre or bigger—is also making neighborhoods like Delray’s Sherwood Park attractive, say real estate agents.
And Domb points to another key factor for east Boca’s attraction:
Communities without gates and restrictive rules. “The upwardly mobile person today may not be in a suit or tie,” he says. “They may own a business or be an entrepreneur and they may need a pickup or a sign on their car. Those people need to live in a place where rules don’t interfere with the way they make a living?”
Of course, there are also buyers who long for those rules and want to live in a golf course community. Those folks are finding what they’re looking for in some of the country club communities a little farther west
“If you go west, you can get more bang for your buck;” Domb says.
The houses, he points out, tend to be bigger and there are more amenities, such as huge clubhouses.
But time can take its toll on some older communities, where clubhouses are not as big or well-appointed as those in newer developments.
“It’s the newer communities that are getting the bigger dollars;” says Gayl Hackett, vice president of sales and marketing for Gordon Homes, which is developing Paradisio, an exclusive enclave of waterfront lots, and building homes starting at $800,000 in the Oaks at Boca Raton.
While some buyers prefer established communities with mature landscaping, others are wary of potential new assessments for improvement or homes that may require up-front maintenance. Those can be roadblocks to property appreciation.
And then there’s the whole issue of equity ownership (in which property owners of some communities are required to buy a membership to that community’s club or golf course), something you’re not going to be dealing with if you buy a home in Camino Gardens or the ultra-hot Palm Beach Farms neighborhood.
Communities that are maxed out on golf course memberships won’t be as attractive as those with available memberships. And homeowners living in communities with high membership and maintenance fees may not see their homes appreciate as fast as those with lower fees.
Still, some people think the overall appearance of well-landscaped country club communities is enough to justify the extra fees for services.
For the Sikoras, everything was a good fit. Randy Sikora says his community is close to almost everything, including his gymnastics business and I-95. It also comes with half-acre or quarter-acre lots and every home is different.
But it’s the fact that kids are everywhere that made the difference.
“Boca Bath & Tennis is really family-oriented;” Sikora says. “There are more than 300 kids in the neighborhood”
Boca Villas, Boca Raton: From $90,000 to $250,000. (177% in three years)
Boca Riviera, Boca Raton: From $205,000 to $345,000. (70% in three years)
Tunison Palms, Boca Raton: From $156,000 to $250,000. (60% in three years)
Bel Marra, Boca Raton: From $260,000 to $570,000. (119% in three years)
Boca Bath & Tennis, Boca Raton: From $345,000 to $650,000. (88% in three years)
Copyright © 2003,Boca Raton Magazine