'A record-low mansion shortage': $50 million homes are selling 'on a weekly with the average price of a single-family home topping $11.5m
Mansions in Florida’s opulent Palm Beach community have been selling so frequently that real estate brokers worry they may run out of the extravagant, $50million homes sought by wealthy elites from New York City heading south following the coronavirus pandemic.
The average price for a single-family home in Palm Beach rose 38percent from last year to $11.7million now after a spike in demand sent prices soaring in the community, which features a section called Billionaire’s Row.
“This is a whole reset of the market,” Jonathan Miller, CEO of appraisal firm Miller Samuel, told CNBC. “We’re now seeing $50 million transactions on almost a weekly basis. That’s a big change. And it appears to be sustainable.”
Mansions in Florida’s opulent Palm Beach community have been selling so frequently that real estate brokers worry they may run out of homes to sell. Above, a 23,000-square-foot home on Via Bellaria is on the market for $39.5million
The average price for a single-family home in Palm Beach rose 38percent from last year to $11.7million in 2021. The above Mediterranean-style home on Woodbridge Road is on sale for $12.5million
A spike in demand sent prices soaring in the already extremely wealthy community. The nine-bedroom home above, on Lake Way, is on sale for $45million
Demand is surpassing supply and brokers are calling it a record-low mansion shortage. Above are Zillow's current listing of homes for sale in the Palm Beach area
Palm Beach's real estate market grew hot in the beginning of the pandemic, as wealthy New Yorkers began fleeing south where lockdown restrictions were less strict and Wall Street firms began expanding operations in Florida.
'Anyone with money is fleeing New York and coming here,' Guy Clark, an agent with Douglas Elliman Real Estate, told Bloomberg in January. 'It's a seller's market like I've never experienced.'
Job relocation has driven some of the migration, as hedge funds and other Wall Street firms open or expand offices in south Florida, which has no state income tax.
Another factor is the rising number of people deciding to permanently work from home and, for those who could afford it, relocate to more enticing or tropical areas.
“The tether between work and home is infinitely longer now, especially for the wealthy,” said Jonathan Miller, president of Miller Samuel Inc., the New York-based company that prepares sales the real estate markets served by Douglas Elliman Real Estate, including Palm Beach.
Palm Beach's real estate market grew hot in the beginning pandemic, as wealthy New Yorkers began fleeing south. This summer, the trend is only increasing
Overall sales of single-family properties, condominiums and co-operative units during April, May and June topped $1.5 billion, setting a new quarterly sales record, according to the report prepared by real estate firm the Corcoran Group
Overall sales of single-family properties, condominiums and co-ops during April, May and June topped $1.5 billion, setting a new quarterly sales record, according to the report prepared by real estate firm the Corcoran Group.
“Not only has there been intense demand, Palm Beach continues to see significant gains across both median and average pricing for single-family homes compared to last year, largely due to strong activity at the very high end of the market,” Corcoran’s John Hackett told the Palm Beach Daily News.
Prices in Palm Beach now match those in Manhattan in terms of price-per-square-foot, CNBC reported. Palm Beach prices hit $1,500 in the second quarter and Manhattan reached $1,545.
Despite the steep prices, homes still are selling rapidly. The number of sales of single-family homes in the second quarter jumped 90percent over last year, according to CNBC.
As a result, demand is surpassing supply and brokers are calling it a record-low mansion shortage. According to Miller Samuel, there’s only about a one-month supply of homes for sale in Palm Beach. The actual number might be even smaller due to homes already in contract or heading to contract.
Despite the prices, homes are still selling rapidly
The number of sales of single-family homes in the second quarter jumped 90percent over last year, according to CNBC
Christopher Leavitt, a top broker in Palm Beach with Douglas Elliman, told CNBC that he has gotten creative when it comes to getting owners to put their homes on the market. He has made offers like helping owners relocate to other homes so they could sell theirs in Palm Beach.
“It’s about repositioning people,” he said. “It’s no longer about just MLS listings and selling a house.”
In April, Forbes reported that there were a record 48 billionaires with residential ties to Palm Beach, up five billionaires from the same time last year.
Some of Palm Beach’s newest residents include Scott Shleifer, a partner at Tiger Global Management, who bought a $122.7 million mansion in Palm Beach in February – the highest price ever paid for a property there. David Tepper, a hedge fund billionaire, bought a Palm Beach spec mansion in the same month for $68 million. And Igor Tulchinsky, another hedge fund elite, recently bought a $39.5 million property in North Palm Beach.
Last summer, discount stock brokerage pioneer Charles Schwab used an ownership company to pay $71.28 million for a lakefront home. Real estate mogul Neil Bluhm spent $7.4 million on a condominium in September. And New York Jets owner Woody Johnson, of the Johnson & Johnson fortune, paid $56.2 million for two adjacent properties.
A private island on Palm Beach also just sold to Todd Michael Glaser, a spec developer, for $85 million. Glaser said he and his development partners plan for a swift renovation of the property before the sell it for a higher price, according to CNBC.