An affordable shelter in the land of pastel polos and big bleach-blonde blow outs? Go fish. But for home hunters dead set on targeting pecunious Palm Beach, there is some relief in sight.
“We’ve had this frenzy of prices more than doubling over the last four years,” said Jonathan Miller, CEO of appraisal firm Miller Samuel. The good news? “Now we’re seeing pricing stabilize.”
It’s not that prices are dipping, exactly. There are far too few properties on the market for that to happen. But the onslaught of northeasterners, who swarmed South Florida during the pandemic in search of suntans and tax breaks, has slowed. As a result, buyers may find they have a little more to work with.
Roll your golf cart over to 550 Island Drive on Palm Beach’s Everglades Island to see the theory in action.
This roughly 5,000-square-foot home listed with Brown Harris Stevens in April 2023 for $39 million. Built in 1955, it has seven bedrooms, five bathrooms and a covered loggia with a fireplace overlooking a backyard with an infinity pool that borders 150 feet of waterfront.
Today, the owners are seeking just $32.5 million. That sounds swell until you realize that it sold for just $9 million a decade ago.
From here, cruise up North County Road to the historic home at 245 Dunbar Road, which hit the market last March asking $28 million, also with BHS. Featuring a large-for-the-area lot and a five-bedroom, five-bathroom main house, it’s a character-filled charmer. The verdant backyard, swimming pool and a four-bedroom, four-bathroom guest house are gravy. But more recently, its ask was slashed to $26 million.
The question becomes: With supply relatively low and demand relatively high — inventory is still down about 50% from pre-pandemic levels, according to Miller’s Q4 Douglas Elliman market report — why are we seeing price relief in the first place? The answer, according to Douglas Elliman broker Cara Coniglio McClure, boils down to sentiment.
The “emotional component” that drove the market throughout the peak of the pandemic “has been taken out,” she said. “Now, it’s shifted to just a normal, healthy market where the buyers have a little bit more power.”
McClure’s listing at 266 Alhambra Place in West Palm Beach is further proof.
The newly built contemporary-style home spans 6,200 square feet and has four bedrooms and 4½ bathrooms plus a guest house with an additional bedroom and bathroom. It was listed pre-construction in March 2022 for $6.5 million, but has since been reduced to $4.45 million.
Similarly, her 4,400-square-foot listing at 3101 Washington Road in West Palm Beach hit the market in late January 2023 for $7.5 million, but is now asking $6.9 million.
The three-bedroom, 3½-bathroom home dates to 1920 but has been fully updated with a kitchen with a Wolf range and quartz countertops, a backyard with a pool and a barbecue area, and a separate guest cottage with a bedroom and a full bathroom.
“Both listings were priced at the height of the market, and so there was a little bit of aspirational pricing,” said Lisa Wilkinson, McClure’s partner at Elliman. “I wouldn’t really say that our market is falling, it’s more that houses that were put on in the middle of COVID have had to adjust.”
While stabilizing home prices don’t answer the inventory problem, a wave of roughly 600 condos that will hit the market over the next four years in the area could. New condo buildings like Olara and Shorecrest — now selling units from $2 million and $1.3 million, respectively — are part of the large-scale redevelopment of West Palm Beach. However, don’t expect that supply to soak up the demand, said Holly Meyer Lucas, a real-estate agent with Compass.
She points to the thousands of people who followed high-paying jobs to the Sunshine State over the past few years.
“The people who relocated here are here to stay,” she said. “The people that are here right now — the teachers, the nurses, the everyday Americans that live in Palm Beach County — if they are still renting and they have the ability to buy, they have to buy something.”