Lux Home Prices in Palm Beach “Off to the Races”

Key Highlights

• Billionaires chasing multi-million dollar mansions
• Purchase contracts for single-family homes priced at $10M+ surge 306% y/y in March

Palm Beach County Still Irresistible

Florida’s Palm Beach County has long been the bees’ knees for wealthy homebuyers.  Turns out it’s even more so in 2021

According to the latest Miller Samuel Douglas Elliman report, purchase contracts for single-family homes priced at $10M+ soared+306% y/y in March 2021.

Deals for pricey condominiums flew off the shelves even faster.  Palm Beach condos priced at $5M+ surged +392% y/y.

All Price Tiers Saw Major Increases

Single-family contracts increased +202% m/m in March.  Signed deals for condominiums came in with a gain of +406%.

Demand within this Palm Beach market appears insatiable.  According to Jonathan Miller, president of Miller Samuel  and author of the latest MillerSamuel-Elliman report, said, “You would think the intensity (in demand) would ease by now, and yet it’s continuing to accelerate.  (This acceleration) suggests that this isn’t a momentary change in conditions.  This is more of a structural change.”

Listings Down

The Miller Samuel – Elliman report also indicated that new single-family listings dropped in March by -27% compared with 2020.  Condominium listings fell -17% y/y.

Can This Market Continue?

Even though out-of-state buyers continue coming to Florida to take advantage of the state’s “friendly” tax rates, some still remember the statewide price drops of -52.7%, according to Zillow, during the financial crisis of 2008.

Others, like Miller and Seth Kaufman, chief sales officer with ONE Sotheby’s International Realty, do not see this current market as a bubble.  Most buyers are Americans looking to settle in Palm Beach and most are paying in cash.

Still,  Florida’s overall population growth is expected to fall to its lowest rate since 2014 this year, according to Florida’sDemographic Estimating Conference.

 And then there’s climate change and the threat of rising sea levels.  The nonprofit Flood Factor estimates that more than 2,700 properties on Palm Beach will be at risk of flooding in 30 years.

Demand Transitioned from Steady in 2018 to Sizzling Hot in 2020 and 2021

Miller said,. “The market transitioned from modest growth to a surge in activity.”  Louise Sunshine, president of LMS Consulting,agrees.  Palm Beach offers large homes, year-round sun and newly opened New York favorite satellite restaurants in Palm Beach including La Goulue and Le Biblioquet.

Continuing into 2021, expectations are that if one buyer backs out, there’s another buyer just waiting to pounce …the contract is executed within a week.

Thanks to the Commercial Observer and  Financial Advisor Magazine.

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