Palm Beach inventory levels fall as demand surges
Whilst some markets in the United States have been hit hard by the pandemic, Palm Beach has seen pending sales and median prices strengthen while inventory levels shrink
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In Palm Beach, new pending sales, an indication of sales closing one to two months ahead of time, are accelerating despite the pandemic. Single family homes registered a 31% increase in June year-on-year rising from 1,746 to 2,287, while pending sales for townhouses and condos rose 14.2% over the same period according to the Miami Association of Realtors and the Multiple Listings Service (MLS).
Median prices are also trending upwards with single family homes registering a 5.1% increase year-on-year in June, while the value of townhouses and condos is up 7.9% over the same period according to the Miami Association of Realtors.
Florida saw an uptick in Covid cases in June and July but according to the New York Times tracker, cases in Palm Beach County have followed a downward trend in the two weeks to 6 August 2020.
According to Jason Mansfield, an Associate in Knight Frank’s international sales team: “It’s perhaps not surprising that Palm Beach has seen such demand given its spacious beachfront homes and landscaped gardens but what is surprising is how targeted buyers are - the mainland simply won’t do - and as a result inventory levels on the island are being depleted.”
Jason continues: “Initially, it was the rental market that surged as out of towners decided to relocate to Palm Beach to ride out their local market’s peak along Florida’s waterfront but sales soon followed as buyers were won over by the island’s lifestyle and amenities.”
The 18-mile long barrier island is home to almost 9,000 residents and according to Forbes, some 30 billionaires (2017).
The State and Local Tax (SALT) deduction, introduced in 2017, had already shone a light on Florida’s favourable tax system, attracting residents from other high tax states and although Palm Beach is one of South Florida’s more expensive markets – the average price of a luxury home sits at $2,180 per sq ft – buyers seem focused on location reassured perhaps by the fact that prices are following an upward despite the pandemic.
According to Jay Phillip Parker, CEO of our US partners, Douglas Elliman’s Florida Brokerage: “As we anticipated, the second quarter reflected a significant slowdown due to the many factors of uncertainty around Covid-19. Since the shelter in place order has been lifted, we have seen the Island of Palm Beach’s appeal intensify to many domestic buyers. As we enter the third quarter there has been a tremendous surge of significant sales which is clearly attributed to the lack of inventory coupled with the pent up demand for the island’s unique qualities. Third quarter has also illustrated similar surges in most of the Palm Beach County markets.”
With travel restrictions still in place, domestic buyers have been responsible for the uptick in demand, however, the good news for British buyers, is once travel restrictions are eased the dollar has weakened in recent months. A pound sterling now buys $1.31 compared to $1.14 in March, providing buyers with a 14.9% discount.
For more information on the Palm Beach market please contact Jason Mansfield or view a selection of properties for sale.
Photo by Tessa Wilson on Unsplash