Palm Beach has overtaken the Miami Beach Barrier Islands to become Florida’s most expensive luxury property market, after the average price of a luxury property doubled in 2021.
The Palm Beach barrier island has long been one of the country’s most coveted sunspots, making a name for itself as a community for the wealthy and powerful, including former US presidents, in the winter months.
Although it appears that the extraordinary level of activity seen during the lockdowns may have quietened down, brokers say growing popularity for luxury condominium developments will sustain the high demand and prices throughout the year.
In the fourth quarter of 2021, the average sale price of a luxury property in Palm Beach reached almost $23.4m, more than double the price a year earlier.
“I started off 2021 by closing on the most expensive home in Palm Beach history, and that deal set the tone for the next three quarters,” says Chris Leavitt, a broker on the Leavitt Mcintosh Team at Douglas Elliman, which has sold some of the most prolific estates on Palm Beach Island.
On average, buyers in the Palm Beach luxury market in Q4 2021 paid $3,759 per sq ft, compared to just $1,872 the year before. Compared to Q3 2021, the average price of luxury property grew by 7%, and the average price per sq ft grew by 12%.
This annual growth in property prices far outstrips almost every other Florida luxury market, with only Delray Beach seeing faster growth in the past year as luxury property prices on average trebled from $2.5m to $7.5m.
Miami Beach and Barrier Islands, the only location with a luxury market comparable to Palm Beach, saw the average luxury property price grow by 51% up to $22.2m.
“The buyer pool is ever diverse,” says Leavitt. “We have international buyers coming back, a new generation of wealth earned from crypto, and creative types relocating from cities like Manhattan because they can work remotely and want to be in Palm Beach where they get the Michelin star dining and amazing culture they’re used to.”
In particular, Leavitt says, the market is being driven by demand for luxury condos, from buyers looking for full services and amenities in their property.
“This coupled with the extremely tight rental market is pushing demand for condos to a level we haven’t seen before in Palm Beach,” Leavitt says. “I just sold an entire seven-unit development to one owner and am selling penthouse listings before I even have the chance to post them on my Instagram”
In the first half of 2021, demand skyrocketed in Palm Beach, with almost 50 luxury properties sold in the next six months. In Q4 2021, there were only half as many luxury sales as were seen the year before, as tight inventory and demand continued to push prices to record-breaking levels.
New stock in the current year means the market is likely to stabilize somewhat, Leavitt says, but the boom in new luxury development condos means the demand for these stunning properties won’t be going anywhere.