Palm Beach has always been known for its opulent mansions and lavish estates, but recently, it’s been attracting a variety of real estate investors and homeowners from all over the state and country. This “Palm Beach Boom” is the result of a confluence of factors, which we’ll explore in further detail in this article.
The State of the Palm Beach Market
The Palm Beach housing market is a unique one, to say the least. Spanning just 7.8 square miles, Palm Beach’s residential inventory is extremely low and limited – particularly for buyers who want a move-in ready home or condo.
While Rocket Homes currently places Palm Beach’s housing market conditions in a “buyer’s market” state, you wouldn’t know it from glancing at the numbers. The median sold price over the past 12 months is $1.58 million, which is an $83,500 increase (+5.6 percent) over the previous 12 months.
When you look at specific types of properties, the media sold price is as follows:
- 1-bedroom: $414,000
- 2-bedrooms: $872,500
- 3-bedrooms: $3 million
- 4-bedrooms: $9 million
- 5-plus-bedrooms: $16 million
The only properties that have seen a year-over-year decline in median sales price is homes with five bedrooms or more. However, this is a little bit of a misleading statistic, as large estates ($25 million plus) are no longer selling quite like they did in 2022 before interest rates surged. This has brought the median sale price down in this category, despite 5-bedroom properties below $20 million still selling quite well.
In June 2023, there were 290 homes for sale in Palm Beach. The majority of these (187) are two- and three-bedroom properties.
Factors Driving Real Estate Trends in Palm Beach
When the average person looks at the Palm Beach real estate market in a microcosm they think expensive. But there’s more to this complex market than just rising prices. To understand the Palm Beach market, you have to understand the trends and growth factors supporting the surge.
Let’s explore a few of the top ones.
- People Moving to Palm Beach
Palm Beach is essentially the ‘Hollywood of the East Coast.’ Famous faces in Palm Beach and the surrounding area include the likes of Bill Gates, Jimmy Buffett, Rod Stewart, Donald Trump, Ariana Grande, Tommy Hilfiger, Steve Wynn, and enough CEOs to fill a billion-dollar yacht.
But it’s not just celebs. Other high-net worth folks are on the move to Palm Beach for a variety of reasons.
- Lack of Inventory
As more people move to the area, which you have to remember is just 7.8 square miles, the limited inventory becomes even more limited. This is creating an inventory crunch, which is keeping prices elevated.
“Just 16 single-family homes traded on the Multiple Listing Service in the first quarter of this year, down more than 60 percent, year-over-year,” The Real Deal blog reports. “But even though Palm Beach is seeing a significant slowdown in sales, the market is still notching record deals. Many sales are happening off-market.”
Want an example of how limited inventory is? There are only 57 properties with two acres or more in all of Palm Beach. And at any given time, only one or two of those may be for sale. So for a clientele of buyers who are slightly “pickier” than the average buyer, you can imagine how challenging it is to navigate this market.
- Condo Living Reimagined
In response to the limited number of single-family properties in Palm Beach, there’s been a rapid rise in luxury condos. One example is The Bristol Palm Beach, which is an iconic 25-story waterfront condominium.
“Enjoy 3 to 5 bedroom homes ranging from 3,500 to 9,000 square feet along with high efficiency and noise reducing the laminated-insulated floor-to-ceiling exterior glass,” The Bristol explains. “With truly unique finishes made to your taste, The Bristol Condo is the perfect place to thrive in modern refinement.”
With amenities like state-of-the-art fitness centers, club lounges, beauty suites, air-conditioned garages, and on-site conference rooms, properties like The Bristol are becoming a more attractive option for busy buyers who want stress-free living.
- Market Outlook
It’s difficult to look at the Palm Beach market and see anything other than growth ahead. Despite rising interest rates and other challenges in the economy, the Palm Beach market is relatively insulated in that it’s supported by wealthier households, cash buyers, and individuals who are able to ride out challenging macro-economic times.
Adding it All Up
When you add up all of the factors driving the Palm Beach real estate market, it’s easy to see why there’s been such a massive surge over the past three to five years. And with so many positive signs supporting the growth, the next five years should have even more opportunities in store.
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