The average price of a single-family home in Palm Beach hit $ 11.7 million in the second quarter, up 38% from a year ago and marking a new high, according to Douglas Elliman and Miller Samuel. Brokers say the flow of wealthy hedge funds, private equity chiefs and other financial executives from New York and other financial capitals has created a dramatic shift in demand and prices for an already known for its disproportionate wealth.
“This is a complete market reset,” said Jonathan Miller, CEO of Miller Samuel, the valuation company. “We are now seeing $ 50 million transactions on an almost weekly basis. It’s a big change. And it seems to be sustainable. “
Prices in Palm Beach are now almost comparable to those in Manhattan, with the price per square foot in Palm Beach exceeding $ 1,500 in the second quarter, near Manhattan’s $ 1,545, according to Miller.
Even with record prices, buyers are paying. Second-quarter single-family home sales jumped 90% from last year – as purchases in Palm Beach and Florida were already picking up due to the Covid migration.
The result is what brokers call a mansion shortage, as demand exceeds supply. There is now about a month’s supply of homes for sale in Palm Beach, a record high, according to Miller Samuel. At the end of the second quarter, there were only 25 homes for sale – and the actual number could be smaller due to homes already under contract or in the process of doing so.
Brokers say they are now going door to door in hopes of finding buyers willing to sell.
Christopher Leavitt, one of Palm Beach’s top brokers along with Douglas Elliman, said he had to get creative in convincing real estate owners to sell, helping those owners find a smaller home to buy, then moving the owner of the smaller house to another house.
“It’s about repositioning people,” he said. “It’s not just about MLS listings and selling a home anymore. “
The financial industry – and its displacement from New York – is the main driver of the Palm Beach boom, Leavitt said. While many hedge fund billionaires and private equity chiefs have relocated to Palm Beach during the pandemic, the development of large-scale office towers and equipment near West Palm Beach means many are staying and moving more. ‘operations nearby.
“This is the tip of the iceberg,” he said.
Scott Shleifer, partner of Tiger Global Management, purchased a $ 122.7 million Palm Beach mansion in February, marking the highest price ever paid for a property in Palm Beach. Hedge fund billionaire David Tepper bought a Palm Beach mansion the same month for $ 68 million. Hedge fund Igor Tulchinsky bought a $ 39.5 million property in North Palm Beach.
A private island in Palm Beach has just been sold to a specialist developer for $ 85 million. Developer Todd Michael Glaser said he and his development partners plan to renovate the property and quickly put it up for sale at a higher price, calling it a “one-time opportunity.”