With the heat of summer behind us, Palm Beach’s busy season is fast approaching and real estate agents are getting ready.
Island residents are slowly returning to town, which means they’re looking for homes.
“Oh, it’s busy. September is busier than we expected,” said Margit Brandt, an agent with Premier Estate Properties. “We’re expecting it to be a very busy season.”
Real estate agents say the market, while not at full speed, is recovering from a summer lull, with listings trickling into the Multiple Listing Service. While the U.S. housing market in general is facing headwinds, Palm Beach real estate is in a world of its own.
It’s been four years since the pandemic boomed the island’s luxury home market, driving demand and prices to unprecedented highs. Prices continue to climb, though growth has slowed. The average sales price for a single-family home in Palm Beach is now $9.3 million, according to Redfin. Real estate agents say the market has returned to its pre-COVID seasonal rhythms, albeit with some corrections.
Earlier this year, Australian infrastructure tycoon Michael Dorrell’s purchase of Tarpon Island for $1 million sparked a surge in ultra-luxury home sales. $152 millionAccording to data collected by Knight Frank, 94 homes sold in Palm Beach for more than $10 million in the first half of this year.
Looking to the future
As we enter the fourth quarter, agents are keeping an eye on two key factors: interest rates and the presidential election. 0.5 percentage point cut While the news earlier this month was welcome, the issue of the commander in chief remains up in the air.
“People don’t like uncertainty,” said Dana Koch, a top agent at the Corcoran Group. “The election outcome isn’t necessarily going to determine the direction they’re going to go. People have always used the election as an excuse.”
Real estate agents say the market is in pre-election limbo but they expect it to recover regardless of which way voters vote.
The waiting period follows an unusually long summer for the island, which is usually a slow season. Residents are relocating to cooler climates, and many homes that haven’t sold by spring are taken off the market. Buyers coming into town are flying in private jets, popping in for a day or two and touring a flurry of homes, brokers say. This summer, many agents are taking advantage of the downtime to Travel to Europe A visit to the Hamptons.
Trophy Hunting
Still, one big deal made it through the Florida heat: Darren Metropoulos, son of billionaire Dean Metropoulos, is selling a historic seaside mansion at 455 North County Road. $148 million In mid-June, Jean Siegel, widow of media mogul Herbert Siegel, moved into her lakeside mansion. $51.6 million In July, the Riggio family, who made their fortune from founding Barnes & Noble, put their beachfront mansion on the market for $96 million in June. Contract by August.
The story continues
Real estate agents say such deals help boost sales: “When other buyers see there are people willing to buy $100 million properties, that confidence spills over into the sub-$30 million market,” says Whitney McGurk, a real estate agent with Brown Harris Stevens.
Palm Beach has positioned itself as the epicenter of the ultra-luxury home market, with prices worth more than $50 million. A recent boom in eight- and nine-figure transactions has thrust the island into the global spotlight, putting it on par with other wealth centers such as Hong Kong, London and Dubai.
“It’s hard to think of anywhere else other than Dubai that has seen the same level of transformation as the Palm Beach market,” Liam Bailey, global head of research at Knight Frank, said earlier this year.
After a flurry of trophy sales in late spring and summer, the number of listings over $50 million has dwindled. According to the MLS, there are only two properties in that price range that are for sale but not under contract. For the first time in years, the island is without a nine-figure “white whale” listing. The most expensive properties for sale are two vacant oceanfront lots listed for sale at $88.9 million each.
Real estate agents said the shrinking supply of luxury properties isn’t surprising, and they didn’t voice any concern. Just 7 percent of Palm Beach homes are on the ocean and 11 percent are along the Intracoastal Waterway, said Suzanne Frisbie, a top real estate agent at Corcoran.
“These higher priced properties don’t always come on the market,” McGurk said. “If (the seller) buys another property, the tax rate will be even higher.”
And often, trophy estates are one of a kind.
“This product is so scarce,” Koch says, “there’s no replacement for it, so people aren’t going to give it up for any reason.”
Inventory of homes priced between $10 million and $30 million
While the supply of trophy properties is shrinking, the inventory of homes for sale in the $10 million to $30 million range is growing, but real estate agents say sales of homes in that price range are slowing.
“The sub-$30 million market is very depressed,” Koch said. “I think it’s going to bounce back.”
Frisbie said it makes sense that there are many more homes for sale, since the majority of homes in Palm Beach are actually in the $10 million to $30 million range. He’s seeing brisk presales at that price point for Related Ross’ proposed South Flagler Houses, a 108-unit luxury apartment complex in two 28-story buildings just across the bridge in West Palm Beach.
“We saw a lot of sales in that price range last season and into the summer,” said Frisbie, the project’s sales manager. She declined to comment on the exact number of presales for the South Flagler Houses, which records cannot confirm. The tower is scheduled for completion in 2026.
Not much has changed in recent years about what buyers are looking for: new construction.
“New construction is still selling for as much or even more than it was before COVID,” said Compass real estate broker Chris Deitz, pointing to the challenges of building on the island, as buyers don’t want to take on renovation or ground-up construction projects that are made even more costly by island bureaucracy.
“Previously, you could apply to the Palm Beach Building Commission and get approval in four months,” Deitz said, noting the now-lengthened approval process, “Now it takes three years to get housing.”
New builds are still rare on the island, but real estate agents say buyers and sellers are becoming more realistic about pricing. The market is closer to equilibrium, buyer-seller dynamics are stabilizing and deals are becoming more viable.
Plus, wealthier buyers still have money to spend.
“Wall Street is booming and people are feeling a little wealthy,” Koch said. “Why not take some of those gains and invest them in tangible assets like real estate and have some fun with them?”
read more
This article originally appeared on The Real Deal. Click here to read the full article.
