Haute Market

HauteMarket

The pandemic fueled an unprecedented real estate boom in Palm Beach County. Where’s the market headed next?

By Lola Thélin

Palm Beach County has never been so popular, particularly its real estate market, which Florida Realtors reported to have experienced a 33.7 percent increase in closed sales during the 12-month period of June 2020 to June 2021. The good news continues with data analysis by real estate website Zillow noting Palm Beach County home values have appreciated nearly 18.1 percent over the past year. The reason for the popularity is a perfect storm, which includes the lure of tax incentives, year-round warm tropical environment, and more home-based work opportunities. “Those [reasons] you may not think of initially, which are very much on buyers’ minds equate to overall quality of life: safety and security, not only the safety and security of the investment, but the safety and security of loved ones,” adds Suzanne T. Frisbie, who serves as senior brokerage director for Palm Beachbased Frisbie Group.

Of course, Palm Beach County is not the only county experiencing this real estate boom. The influxhas been

happening for the past 18 months, with on average 1,000 people per day moving to the Sunshine State, explains Karen Johnson, president of Broward, Palm Beaches and St. Lucie Realtors®. In Palm Beach County this boom translates to a median sale price of $500,000 as of July 2021, up from $399,000 a year prior for a single-family home, a 25.3 percent increase. The dollar volume in sales from June 2020 to 2021 has gone from $995.8 million to $2.2 billion, a 119.4 percent increase. The median time to contract is 10 days in July 2021 versus 53 days the year prior, an 81.1 percent decrease. Zoom in on the Palm Beach Island market, and the numbers are astonishing. According to Corcoran Group’s quarterly report, the closed sales volume was a record-high of more than $1.5 billion. The island’s median and average prices for single-family homes rose 19 to 24 percent respectively, versus last year. “In my 41 years in the industry, I have not seen a market like this,” says CEO and President of The Keyes Company/Illustrated Properties Mike Pappas. “We are having a record-breaking year—up 83 percent over last year.” Supply is short and fast moving. Pappas advises buyers to be ready, from being pre-approved for their mortgage to keeping their inspections short, deposits strong, and contingencies removed. In addition, the strong increase in equity due to escalating prices has convinced many local homeowners to take advantage of the strong market and become sellers themselves. Pappas has met with many local homeowners who are surprised at the strong increase in equity they now have due to the escalating prices. “However, some have unrealistic pricing, not based on comparative closed sales data, so you educate as

Mike Pappas

Photos courtesy of Frisbie Group

much as possible,” says Johnson.

So, the question remains: Should you sell your Palm Beach County home? The data confirmsit’s a seller’s market—a trend that will likely continue for some time due to the basics of supply and demand. “We have a very limited supply as compared to what is considered a balanced market,” says Johnson, adding that the June data showed 1.8 months of supply in single-family homes compared to 3.7 months’ supply a year ago in Palm Beach County. A balanced market is

around fivemonths of supply. “Based on current economic data, if all else stays the same, we see at least two-plus years until we have a balanced market,” Johnson says. “Historic low rates are also playing a large role in buying power.” Frisbie also expects the real estate boom to hold for the foreseeable future, especially with 15 million millennials Suzanne T. Frisbie now in their prime buying years. “The median age is coming down significanly,” says Frisbie. “On your morning walk you’re likely to find lot binkies, aka infant pacifiers”