Wealthy home-sellers in Palm Beach are making major profits, with some properties selling for nearly double what they went for just a year or two ago. A five-bedroom beachfront house at 6 Via Los Incas sold for $66 million last month, an 86% gain from the $35.4 million an entity tied to billionaire Josh Harris paid for it in June 2021. Earlier in December, designer Tom Ford bought the modern 241 Jungle Road for $51 million, 42% more than Motive Partners founder Rob Heyvaert's $35.8 million purchase price in August 2021.
As buyers across the US have pulled back, deep-pocketed house hunters in South Florida are paying up for its few available move-in-ready spreads. The region’s pandemic boom is nearing the end of its third year.
According to Gary Pohrer, executive director of luxury sales at Douglas Elliman Palm Beach, time is worth more than money in many instances, especially when it comes to purchasing a home in Palm Beach. With limited inventory and high demand, buyers are willing to pay a premium to secure a property during the peak season. This is exemplified by the recent sale of a two-bedroom condo, which closed for $4.5 million – $1.55 million more than the unit sold for just six months earlier. Although the condo only received some cosmetic updates, such as repainted walls and new countertops, the market value of the property has increased significantly.
Buyers and brokers say that they are confident in the enduring value of real estate in the exclusive enclave of Palm Beach. They point to the expansion of office footprints across the Intracoastal Waterway in West Palm Beach by major banks and other companies as evidence of this. Palm Beach is appealing for its private feel, famously warm climate and social scene that rivals the lavish parties of New York’s Hamptons.
Harris, who announced his departure from Apollo Global Management Inc. in 2021, has been increasing his presence in Florida. Harris is worth an estimated $7.6 billion, according to the Bloomberg Billionaires Index. He is also building out a new firm, 26North Partners.
The recent price jumps in Palm Beach reflect the scarcity of move-in-ready homes for sale. There were 48 single-family properties on the market at the end of the fourth quarter, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Of those, many have been listed for months and need extensive renovations, leaving few options for buyers looking for the quick gratification of a place they can enjoy before high season ends in April.
For the six single-family deals that closed in the quarter, the median price was $12.65 million, almost 50% higher than a year earlier, the firms said. Many of the sales that have netted big profits happened off-market, as real estate agents turn to past clients who had compromised on their previous purchases. Some who are living in “placeholders” while still searching for their dream home may be ready to take their profits and move on, according to Corcoran Group agent Dana Koch. But those agreements don’t come cheaply.
“You have to go and convince the seller to sell,” Koch said. “It’s the ‘make me move’ price.” Even so, said Corcoran’s Suzanne Frisbie, the pool of willing sellers is thinning as owners see few homes on the market to trade up to. “Everybody’s been asked,” she said. “If you’re not interested in leaving Palm Beach, it’s where am I going? And if you can’t fit that component in, you can’t daisy chain these transactions together.”
Tremblant Capital Group Chief Executive Officer Brett Barakett and his wife, Meaghan, were an exception. While they sold 245 Ridgeview Drive for $15.05 million in November, they also own Palm Beach’s landmarked Southways estate, which they bought in 2019 and have been renovating. Their sale of the Ridgeview House—to investment manager Fred Alger and his wife, Veronica—was the third since the start of
According to Koch, Palm Beach sellers generally wait at least a year to agree to a sale, in order to benefit from long-term capital gains tax rates. Owners who are willing to put time and money into their properties are seeing big returns. For example, the home at 150 El Vedado Road was purchased in early 2021 for $7.9 million. After interior and exterior renovations, it found a new buyer who paid $23 million in a deal that closed last month. Frisbie said she doesn’t see the price growth stopping for homes that are in good condition and well-located.
As a leading independent research provider, TradeAlgo keeps you connected from anywhere.