Villas along the coast of Palm Beach, Florida.
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Prices in Florida’s ultra-affluent Palm Beach community hit an all-time high in the second quarter as brokers struggled with a record low number of villas for sale.
The average price for a single-family home in Palm Beach reached $ 11.7 million in the second quarter, a 38% year-over-year increase and marks a new high, according to Douglas Elliman and Miller Samuel. Brokers say the influx of wealthy hedge funds, private equity bosses, and other financial executives migrating from New York and other financial capitals has skyrocketed in demand and prices for a market already for its oversized wealth is known.
“This is a complete reorganization of the market,” said Jonathan Miller, CEO of Miller Samuel, the valuation firm. “We’re seeing $ 50 million in transactions almost weekly now. That’s a big change. And it seems sustainable.”
Prices in Palm Beach are now close to Manhattan levels, with the price per square foot in Palm Beach topping $ 1,500 in the second quarter, according to Miller near Manhattan’s $ 1,545.
Even at record high prices, buyers pay. The number of single-family home sales rose 90% year over year in the second quarter – when purchases in Palm Beach and Florida were already picking up due to the Covid migration.
The result is what realtors call a villa shortage as demand exceeds supply. There is now a record low of homes for sale in Palm Beach, according to Miller Samuel. At the end of the second quarter, there were only 25 houses for sale – and the actual number could be lower due to houses already contracted or about to be contracted.
Realtors say they are now going door to door in hopes of finding buyers ready to sell.
Christopher Leavitt, a top Palm Beach realtor with Douglas Elliman, said he had to get creative in persuading property owners to sell, helping those owners find a smaller home to buy, and then the smaller homeowner in move to another house.
“It’s about repositioning people,” he said. “It’s no longer just about MLS deals and selling a home.”
The financial business – and its relocation from New York – is the main driver of the Palm Beach boom, Leavitt said. While many hedge fund billionaires and private equity chiefs moved to Palm Beach during the pandemic, the development of tall office towers and amenities in nearby West Palm Beach means many are staying nearby and moving more businesses.
“That’s the tip of the iceberg,” he said.
Scott Shleifer, a partner at Tiger Global Management, bought a Palm Beach villa in February for $ 122.7 million, marking the highest price ever paid for a Palm Beach property. That same month, hedge fund billionaire David Tepper bought a mansion in Palm Beach for $ 68 million. Hedge financier Igor Tulchinsky bought a $ 39.5 million plot of land in North Palm Beach.
A private island in Palm Beach has just been sold to a specification developer for $ 85 million. The developer, Todd Michael Glaser, said he and his development partners plan to renovate the property and quickly bring it back for a higher price, calling it a “once in a lifetime opportunity.”