By Paul Owers, Sun Sentinel
Nearly five years ago, Ron Reck paid $803,000 for a new residence at Las Olas Grand, one of the tallest condominiums in downtown Fort Lauderdale.
The 39-story luxury building, which fronts the New River, boasts breathtakingly clear views of the Atlantic Ocean two miles away. Reck, an entrepreneur who is moving to San Diego, sold the 12th floor unit last month for $800,000 — or a loss of less than 1 percent.
"It's pretty close to a wash," he said. "If you break even, you did well in this economy."
Nearly every condo in South Florida lost value in the past four years, with some tumbling 50 percent or more. But a few haven't been hammered nearly as hard, mostly benefiting from their proximity to water.
"Oceanfront properties didn't experience the same kind of hits, especially in areas where there was not a lot of overbuilding," said Frank Thomas, a real estate agent for Condo Vultures, a Bal Harbour-based consulting firm that conducted a sales history analysis of condos in Broward and Palm Beach counties.
The median price for existing condos in Broward in March was $73,600, a 66 percent drop from the February 2006 peak of $216,800, according to the Florida Realtors trade group.
Palm Beach County's March median was $90,900, a 61 percent slide from the July 2006 peak of $231,300. The Realtors' group began releasing statistics for existing condos four years ago.
Historic price declines among condos were inevitable, analysts say. Short-term investors helped create the housing boom during the early part of the past decade, scooping up units at preconstruction prices and then flipping them for huge profits in a matter of days or weeks.
To meet the seemingly insatiable demand, and with a dearth of prime locations available, South Florida developers started converting modest apartments — even those near railroad tracks with no water views — into condos, with some prices approaching $300,000.
Developers also bought land for new condo projects in less-than-ideal settings, including the western suburbs, far away from jobs and a vibrant nightlife, said Brad Hunter, a housing analyst with Metrostudy in Palm Beach Gardens.
Values in those condos fell the most and dragged down prices across the board.
While virtually no buildings have been spared, values in high-end condos hugging the coast have been the most resilient because of the inherent lure of the ocean and Intracoastal Waterway, analysts say.
"They ain't making any more of that," said Craig Werley, senior principal at Focus Real Estate Advisors in Coral Gables.
Another factor hurting condo prices: Oversupply.
Developers flocked to the downtowns of Miami and West Palm Beach in the past 10 years, ultimately creating a glut of empty units that still has prices there depressed.
In Fort Lauderdale, though, city commissioners limited the number of downtown condo units in response to concerns about overdevelopment, said Alan Hooper, a builder of boutique condos in the city.
The move ultimately kept price declines from ravaging the area, though Hooper said he doesn't think that was commissioners' intent. "It was just lucky," Hooper said.
Foreclosures also affect building values.
When large swaths of condo developments go vacant, homeowner associations face budget shortfalls and struggle to pay for cable TV, valet service and other amenities. To compensate, condo boards raise fees and impose special charges on the owners who remain.
"As soon as the quality of life disappears, so do the values," said Peter Zalewski of CondoVultures.com.
Las Olas Grand opened near the peak of the housing boom in summer 2005, but it hasn't been hurt by widespread vacancies or owners in financial distress, said John D'Angelo, Reck's real estate agent.
The 213 units are selling for $550,000 to $1.8 million, down from $750,000 to $2 million during the boom years, D'Angelo said. During the first three months of 2010, six units sold there. On average, the sellers got a quarter less than they paid.
"They're not happy about the 25 percent," D'Angelo said. "But that's still pretty good. In this market, that's hard to accomplish."
In Palm Beach County, Mizner Tower in Boca Raton also has avoided major price declines, in part because it's a stable development that opened more than a decade before the boom, according to CondoVultures.com.
The 136-unit Mizner Tower, which opened in 1989, sits on the grounds of the Boca Raton Resort and Spa and also has views of the ocean and Intracoastal. Ron Bachrad, an agent with Boca-based Lang Realty, said the building has had few foreclosures, if any.
Three of his listings sold this year for more than $1 million. He estimates prices there have fallen by about 20 percent since the market peaked.
For second-home buyers, who generally pay cash, it's an ideal community because of its extensive amenities, including boat docks, tennis courts, valet parking, a health club, concierge and food service, Bachrad said.
For all that, he said, "People are willing to pay somewhat of a premium."
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