Agent Margit Brandt of Premier Estate Properties mentioned that many buyers also see Palm Beach real estate as a key part of their investment strategy. “A lot of these buyers are looking to allocate capital but also enjoy the investment,” she said. “I’m seeing an influx of people from all over the country who want to come here.”
With the busy winter season rushing toward ultra-wealthy Palm Beach, the local real estate market is settling into a new reality, where many discerning homebuyers who want to own a piece of the island are giving their options a harder look before making any decision to buy.
And those shoppers are continuing to find a limited inventory of single-family homes, especially better-quality properties that are new, newer or newly renovated on the water.
The supply of on-the-market houses continues to inch up from historic lows caused by a whirlwind of sales that accompanied the go-go years of the pandemic-induced boom that began in 2020. That boom sharply raised the bar for home prices, which continue to be substantially higher than those before the pandemic, according to the sales analyses released quarterly by real estate agencies who do business on the island.
And there’s no shortage of would-be buyers, who see Palm Beach as one of the most desirable places in the country —and perhaps the world — to own a home, local real estate agents and brokers agree.
The resulting tug-of-war between the still-limited supply of single-family homes and strong interest from would-be buyers continues to characterize the island’s real estate scene, according to a just-released third-quarter sales report from Brown Harris Stevens.
“General market fundamentals remain strong with persistent demand and under-supplied market,” the Brown Harris Stevens report said.
Even so, Palm Beach house-hunters today are far different from those of the pandemic years.
“There’s less urgency for buyers to make a decision,” broker Christian Angle of Christian Angle Real Estate acknowledged. “The buyers are out there, but they want something that aligns (more precisely) with what they are looking for. But they still want to be in Palm Beach. Throughout the summer, there was a steady flow of traffic (of potential buyers).”
Such deep-pocketed buyers — who are no longer willing to settle for just any property — have forced Palm Beach sellers over the past year to temper their asking-price expectations. The market lately has seen multiple price reductions — and, no doubt, some tough talk at negotiating tables — before buyers have finally taken a bite.
Even with downward asking-price adjustments, sellers by and large will be getting far more for their properties today than they would have five years ago.
Palm Beach also is coming off a summer that began with a bang, thanks in part to the May sale, recorded at $150 million, of private Tarpon Island and its renovated-and-expanded mansion. That sale was followed in June by an off-market deal, recorded at $148 million, for the landmarked ocean-to-lake estate known as Amado at 455 N. County Road.
In all, nine sales were documented during the off-season — between May 1 and Oct. 18 — at $39 million or more, with the majority closing in May, June and July. During the same period last year, there were five transactions in that heady price category.
Perhaps it’s not surprising, then, that the total dollar volume generated by Palm Beach sales rose in the second and third quarters of the year compared to the same period in 2023. Town-wide sales of single-family properties, condominiums and co-operative units for two quarters totaled about $1.44 billion, up from last year’s total of $1.16 billion, according to sales reports released by Frisbie Real Estate, which is headed by agent Suzanne Frisbie of the Corcoran Group.
And overall sales in the third quarter were slightly up, year over year, the latest reports generally agreed, although apples-to-apples comparisons are difficult because different agencies use different criteria to track transactions.
Here are a few more takeaways from the summer — including a closer look at data from the new third-quarter sales reports — as well as some insights into what buyers and sellers might see in the coming months.
On the single-family home scene
It’s costing buyers less right now to get a foot in the door to the Palm Beach real estate market than it did a year ago. Last year at this time, sales reports consistently noted the lack of sales below $10 million, a price described at the time as the “entry point” into the Palm Beach market.
But in the quarter that just ended, far more properties sold at less than $10 million. That fact is reflected in the Corcoran Group’s third-quarter report, which noted that average and median sale for single-family properties fell 40% and 45%, respectively, in a year-over-year comparison. The median price is the price at which half of the properties sold for more and half for less.
In July, August and September, “nearly half of all closings sold below ($10 million) compared to last year, when only one sale traded below this price point. Despite the annual percentage declines in pricing this quarter, (the) single-family average price has exceeded ($11 million) every quarter since 2021,” said the Corcoran Report, which was issued separately from the one from Frisbie Real Estate.
The supply of single-family properties in the third quarter climbed by 17% during the third quarter in a year-over-year comparison, according to the sales report just released by Douglas Elliman Real Estate. But the inventory remained far less than what was available in 2019, before the pandemic hit.
An MLS search of “active” listings Oct. 18 showed 82 houses and townhomes on the market. A few of those properties were also listed as potential tear-downs among the 13 listings in the “land-acreage” category.
And two of the newest additions to the single-family listings were whoppers: A remodeled lakefront home at 1460 N. Lake Way has entered the market at $95 million, while a new oceanside mansion developed on speculation at 1540 S. Ocean Blvd. is asking $88 million.
Meanwhile, a $96 million listing for a direct-beachfront estate at 1446 N. Ocean Blvd. remains under contract on the North End, one of seven properties in the MLS’s “pending” category.
But listings in the MLS don’t tell the whole story about what’s available for sale in Palm Beach. Fully 25% of the sales in July, August and September, for instance, involved properties that changed hands in off-market deals in the area stretching from northern tip of the island to Sloan’s Curve, according to a just-released sales report from Tina Fanjul Associates.
Condos, co-ops and rentals
Buyers at this point will find far more condos and co-ops on the market than they did a year ago, according to the latest round of third-quarter sales reports. The analyses also show more condos sold in the third quarter in a year-over-year comparison at higher prices.
Palm Beach’s multifamily market “showed sustained growth” during the third quarter compared to the same period last year, the Brown Harris Stevens reports said. “The market continues to be buoyed by strong demand and constrained inventory.”
The Elliman Report, meanwhile, noted the number of condominiums for sale during the third quarter jumped by more than 45% compared to a year ago.
A recent search of the MLS showed 52 condos and co-ops for sale in Midtown at prices ranging from $16.5 million to $1.5 million. Three more Midtown units were priced below $1 million.
On the South End’s so-called Condominium Row, 77 units were for sale, priced at between about $7.5 million and $366,000. Three others were asking less than $300,000.
But the island’s condominium owners also are facing unprecedented challenges. Work crews over the summer at many buildings were carrying out renovations, concrete restoration and maintenance work, often in phased work plans. Much of that construction is related to new state regulations put in place to help ensure the integrity of multifamily buildings in the wake of the deadly 2021 collapse of a beachfront condo in Miami-Dade County’s Surfside community.
And some condo owners may want to sell their apartments to avoid paying anticipated, and sometimes substantial, assessments related to the new regulations.
Older condos in Palm Beach also are facing increased competition from new luxury and ultra-luxury buildings “across the bridges” that have either opened or are planned for West Palm Beach and other cities.
Those looking to lease a house or condo in Palm Beach for the season still have plenty of options — a big change from the pandemic years, when the island saw super-tight inventory in the rental market as more people moved here year-round. A search of the MLS early last week showed 47 single-family properties and 123 condominiums and co-ops for lease, although prices and availability varied widely.
Broker Linda Olsson of Linda R. Olsson Inc. specializes in single-family sales but also handles rentals. She suspects that people have been slower to rent this season because they are back to following pre-pandemic patterns. That includes extending their summer stays at their homes up North or vacationing elsewhere in September and this month.
“Many are traveling in Europe,” Olsson said. “They didn’t want to go during the (height of) the summer.”
She added: “When I’ve called my people in Nantucket (in Massachusetts), they’re staying there (for a while). But I still think they’re going to flock here once the season really gets underway. No doubt. I think for many people, Palm Beach will be very seasonal again, which we haven’t seen in a while.”
Is an active real estate season ahead?
Brokers and agents have told the Palm Beach Daily News they are expecting a busy season, and not just because buyers will still be competing for properties.
The uncertainty preceding the Nov. 5 presidential election will have receded, they noted.
Falling interest rates may also be a factor to spur purchases, although a statement accompanying Douglas Elliman Real Estate’s just-released third-quarter sales report showed that 75% of Palm Beach transactions were cash deals for properties in the multiple listing service.
And it remains unclear if the active hurricane season that ends Nov. 30 — and included three destructive hurricanes that struck Florida’s Gulf Coast but generally spared Palm Beach — will have any effect on decisions made by homebuyers and sellers on the island.
Broker Angle is among those anticipating that this real estate season will be a busy one. “We’ve come out of a pretty active summer selling period,” Angle said. “We have a firm marketplace, pricing is strong, inventory is down and demand to be in our community (is) strong, even if the sense of urgency (on the part of buyers) is tempered today.”
He cited many of the characteristics that attract people to Palm Beach: Florida’s relatively favorable tax climate compared to many other states; the island’s natural beauty and handsome architecture; its reputation for security; and its proximity to downtown West Palm Beach, which is undergoing a major revitalization fueled by corporate relocations.
Agent Margit Brandt of Premier Estate Properties mentioned that many buyers also see Palm Beach real estate as a key part of their investment strategy. “A lot of these buyers are looking to allocate capital but also enjoy the investment,” she said. “I’m seeing an influx of people from all over the country who want to come here.”
Analyst Jonathan Miller, who prepares the Elliman Report, described Palm Beach real estate as “an engine that doesn’t know how to stop.” Real estate activity in town “is similar to much of the South Florida region, in that prices are rising and listing inventory is also rising. But Palm Beach is one of the few places that is seeing more sales,” said Miller, who heads Miller Samuel Inc. in New York City.
In her agency’s third-quarter report, Sotheby’s International Realty Brokerage Manager Jessica Shapiro stressed the uptick in listing inventory, one of the reasons she is “very optimistic for a busy season.”
The latest third-quarter sales reports for Palm Beach are expected to be available at BHSUSA.com, Inhabit.Corcoran.com, Elliman.com, FanjulRealEstate.com, FrisbiePalmBeach.com, LindaOlsson.com, and SothebysRealty.com.
Darrell Hofheinz is a USA TODAY Network of Florida journalist who writes about Palm Beach real estate in his weekly “Beyond the Hedges” column. He welcomes tips about real estate news on the island. Email dhofheinz@pbdailynews.com, call 561-820-3831 or tweet @PBDN_Hofheinz.