Early last year, The Preserve at Longleaf off Wickham Road in Melbourne was a new apartment complex all set to become a top-of-the-line condominium property, with units selling for more than $200,000.

Today, with Brevard County’s condominium market perceived as soft, Longleaf is staying as apartments, with leases starting at $900 a month for a one-bedroom, one-bathroom unit.

“A condominium possibility was considered. However, changes in the ‘for sale’ market led us in a different direction,” said Erika Butz, a spokeswoman for the Boca Raton-based Altman Cos., the developer and owner of The Preserve at Longleaf.

The “different direction” Butz refers to may be getting more and more commonplace, as the county’s — and Florida’s — condominium market has run into significant challenges.

A softening real estate market has hit the condominium market particularly hard. But, as Realtors note, falling prices lead to buying opportunities for people who might have been priced out of the market a year to 18 months ago.

Condo prices, like the prices of single-family homes, have dropped, making them more affordable to buyers.

Still, some units aren’t selling.

Jerry Kelleher of Viera said the response for a Satellite Beach condominium he has for sale — across the street from the ocean — so far has been slow. The two-bedroom unit is on the market for $170,000.

“I’m up from Miami, and, to me, something across the street from the ocean for under $300,000 is amazing,” Kelleher said.

The effect on the area’s apartment rental market so far is uncertain. But logic would say that, with fewer properties turning condominium, apartment rents should stabilize, because more apartment units theoretically would be available.

Realtors say The Preserve at Longleaf so far is among the county’s first properties to fit into the “conversion reversion” category.

That situation — properties in the process of being converted to condominiums becoming rental units again — is occurring with more frequency in South Florida.

It may or not happen in Brevard. But with the condominium and single-family-home market in flux, some newly converted condo properties are leasing some units until sales pick up.

For example, Cypress Cove at Suntree, which converted to condominiums early last year, now is leasing some of the units at the 326-unit complex.

Coral Gables-based The Berman Group, owner of Coral Gardens condominiums in Melbourne, which converted from a rental unit last year, also is leasing some of the unsold units.

“They are leasing some of them to make up for cash flow,” said Lee Slovik of Pruitt Real Estate, who is a broker for Coral Gardens.

“Unfortunately, the conversion was made when the market started to change,” Slovik said.

The upside, Slovik noted, is that, with prices at Coral Gardens starting at a relatively low $109,000, the units are perfect for service-industry and professional workers hoping to buy property.

That’s a key concern among groups pushing housing affordability in Brevard County.

For Brevard and Florida, the recent condominium market has been less than pretty.

In the past year, prices have fallen, due to rising inventories and a slower real estate market. A number of new condominium projects have been scaled back or put on hold — including some in and near downtown Melbourne.

Also, investors who bought condo units with the idea of reselling them for a profit report having a difficult time doing so.

Reversing trend

For the past two years, in the whirlwind of a rising real estate market, owners of several long-established rental properties opted to cash out and turn their units over to condominium developers.

According to the Division of Florida Land Sales, Condominiums and Mobile Homes, in 2004, three Brevard rental properties applied for permission to convert to condominiums. That figure jumped to 10 in 2005, then dropped to eight in 2006.

So far this year, no conversion applications have been submitted from Brevard.

Bobbie Dyer, branch manager of the Melbourne office of Wells Fargo Home Mortgage, said there probably won’t be any conversions for quite a while.

Wells Fargo has provided financing packages for buyers of many of the rental-to-condominium unit projects, which, Dyer said, are some of the best deals around, particularly for first-time property buyers.

“Until that inventory is used up, I don’t see any more coming in the next six months,” Dyer said of future apartment conversions in Brevard.

According to a compilation of monthly reports from the Florida Association of Realtors, condominium resales by Realtors fell 73 percent last year, from 2,537 units sold in 2005 to 679 units sold in 2006. A separate year-end report showed different numbers of units sold than the individual monthly reports, but still a similar percentage decrease in total sales — 69 percent.

Median price — the point at which half the homes sell for more, half for less — fell 14 percent to $156,000 in December, down from $181,100 in December 2005.

The trend continued in January, the last month in which statistics are available, with sales down 49 percent from the previous January and the median price down 21 percent.

Tim Sheehan, broker at Progressive Real Estate in Melbourne, who is selling units for the luxury condominiums at The Pineapple House at the west end of the Eau Gallie Causeway, said trends there have run counter to the market.

He wouldn’t say how many of the 33 units — which range in price from $500,000 to $1.5 million — have sold, but “we’ve actually done really well.”

“Even though the market has weakened,” Sheehan said, “we’ve sold the amount of units we’ve wanted to sell at this point.”

Renters gain

The fact that The Preserve at Longleaf didn’t convert to condominiums probably worked out best for many of its tenants, who wound up getting some upgrades in the apartments.

The developer who initially planned to turn it into condominiums replaced the kitchen and bathroom vinyl floors with tile, added larger refrigerators and had microwaves installed above stoves.

Mike and Jamie Yuen recently began renting there after moving to Brevard from Ottawa, Canada.

“We’re new to the area, and we wanted to rent for a while before we decided to commit to buying property,” Jamie Yuen said.

Jane McCrea, a neighbor of the Yuens, said she and her roommate decided on The Preserve at Longleaf because it was a new, top-grade rental property.

Buying a house — along with the insurance and association fees — wasn’t in her budget.

“Buying property right now is really out of reach for a lot of people,” McCrea said. “I don’t know if you get the bang for your buck.”

Source: www.floridatoday.com

This entry was posted on Sunday, March 4th, 2007 at 11:41 pm and is filed under Condo, Real Estate. Tags: Berman Group Boca Raton Brevard County Canada Category Condo Condominiums and Mobile Homes conversion applications Coral Gables Division of Florida Land Sales Florida Florida Association of Realtors insurance Inventory Melbourne Miami microwave Mobile Oman Ottawa Projects Property Real Estate real estate market Realtor Realtors Satellite Beach South Florida Wells Fargo Wells Fargo Home Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.