Mansion located in West Palm Beach. Photo: Getty Images.
A posh area of Florida has become a competitor to Manhattan, and mansions for the ultra-rich are already in short supply.
It is Palm Beach, a town of just over 8,000 inhabitants in the south of the peninsula, where the Mar-a-Lago mansion of former President Donald Trump is located.
The average price of a single-family home in Palm Beach reached US $ 11.7 million in the second quarter of the year, 38% more than the previous year and marking a new record, according to the real estate report by Douglas Elliman for the firm of Miller Samuel appraisal.
“This is a total reboot of the market,” Jonathan Miller, CEO of Miller Samuel, told CNBC. “Now we are seeing transactions of 50 million dollars almost weekly. That is a big change. And it seems to be sustainable. “
Worth Avenue Clock Tower, Palm Beach, Florida, During the Pandemic/Getty Images
Record prices don’t scare buyers
Even with record prices, buyers don’t hesitate to shell out millions. The number of single-family home sales in the second quarter increased 90% from last year, when purchases in Palm Beach and Florida were already on the rebound thanks to migration driven by Covid-19.
Prices in Palm Beach are now almost on par with Manhattan. The price per square foot in Palm Beach topped $ 1,500 in the quarter, about $ 1,545 in Manhattan, according to Miller.
The cause of this sales explosion has little to do with Trump’s withdrawal to Mar-a-Lago. Brokers say the influx of wealthy private equity hedge fund bosses and other financial executives relocating from New York and other financial capitals in the wake of the pandemic has created a sharp spike in demand and prices for an already familiar market. for its enormous wealth.
In addition, large-scale office and service towers are being developed in nearby West Palm Beach, where these ultra-rich move their financial operations.
West Palm Beach, Florida, Getty Images
Almost no houses to sell
As a consequence, demand already exceeds supply. There is now about a month’s worth of homes for sale in Palm Beach, a record low, according to Miller Samuel. At the end of the second quarter of 2021, only 25 homes were up for sale, and the actual number may be less as some are already under contract or on track.
Scott Shleifer, a partner at Tiger Global Management, purchased a $ 122.7 million mansion in Palm Beach in February, setting the record for the highest price paid for a property there. That same month, hedge fund billionaire David Tepper bought a Palm Beach mansion for $ 68 million and Igor Tulchinsky, another industry financier, bought a $ 39.5 million property in North Palm Beach.
A private island in Palm Beach has just been sold to real estate developer Todd Michael Glaser for $ 85 million. Glaser has said that he and his development partners plan to quickly renovate the property and re-list it for a higher price, calling it a “once in a lifetime opportunity.”
So the dance of the millions is just beginning in Palm Beach.
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