Marketwatch: South Florida

Buyers continue to flock to the lifestyle and low taxes of the Sunshine State.

With the recent sale of Palm Beach’s Tarpon Island for an astounding $150 million, it’s clear that the South Florida market is thriving. Palm Beach now boasts more listings over $50 million than any other “trophy” market in the U.S., outpacing even the Hamptons, Malibu, and Aspen. This trend is fueling a sustained boom in South Florida’s high-end luxury market, spanning from Miami to Palm Beach. HRES consulted leading brokers Dana and Paulette Koch of Corcoran, John and Lisa Cregan of Sotheby’s International Realty, and Elizabeth DeWoody of Compass for their expert insights into the current market dynamics.

Dana & Paulette Koch  —  Corcoran 

Where are most of your buyers coming from?
Our buyers tend to come from New York, New Jersey, Connecticut, Massachusetts, Washington DC, Illinois, and California. We have a combination of tax refugees and political refugees from those states so that they can take advantage of the Palm Beach lifestyle! Lately, many of our buyers have been local. They made initial buys which I refer to as “placeholders” while they searched for another property. Now that our market has more of a sense of normalcy, we have been able to continue to educate our clients and they are able to move swiftly when the right property comes onto the market. Real Estate has always been a sport in Palm Beach.

Have higher interest rates had an effect on South Florida’s luxury real estate market?
Absolutely! Higher interest rates have slowed down the market here. That is part of the reason why there are fewer sales. It’s not that buyers can’t afford to pay an extra point or two, it’s the fact that money was so cheap for so long that it has had an effect on buyers psyches. In addition, the rise in rates has kept potential sellers in their current homes because it doesn’t make financial sense for them as they are locked in at such low rates. Not only do we have fewer buyers, but we have fewer sellers.

John & Lisa Cregan  —  Sotheby’s

What are some of the trends you’re seeing in South Florida’s luxury real estate market? Are there any specific areas in high demand now?
We’re seeing a barbell. At the super high-end, price does not seem to be any impediment to demand. And anything at the low-end that’s priced reasonably goes very quickly. It’s the buyer in the middle who seems hesitant right now. Plenty of showings, fewer contracts. They seem to be worried they’ll top-tick the market and regret their purchase. The pending election is the current excuse to sit tight. Inventory has risen as a consequence and there are some very nice homes to choose from. It’s a real opportunity. We like to remind people it’s not like buying a stock — Nvidia is never going to pay you the dividend of a warm winter in Palm Beach.

What’s the quirkiest request you’ve ever received from a luxury homebuyer?
Maybe more fun than quirky, we have a client whose primary home is a town an hour north of here, but she really wanted to play in the terrific women’s tennis league at Palm Beach’s Seaview Park. Being a town resident nicely bumps your eligibility, so she and her husband bought a beautiful two-bedroom apartment in an oceanfront building just for the tennis league. She’s had a blast.

Elizabeth DeWoody  —  Compass

Are there any emerging areas that you believe offer significant growth opportunities?
The coastal West Palm Beach neighborhoods South of Southern, El Cid and the Northwood,  are huge up and coming areas with significant growth opportunities. The West Palm Beach downtown development is on fire. West Palm Beach dubbed “Wall Street of the South” is booming with commercial buildings filled with top New York City finance firms — Goldman Sachs and Elliot Management to name a few. These companies are calling West Palm Beach home, and their employees are excited to relocate to South Florida.  

Have you ever encountered any surprising or unexpected amenities in the homes you’ve listed…like a secret room?
Basements are far and few between in Florida as we are at sea level. However, surprisingly, the closer you are to the ocean the higher the elevation. So, some homes on the Ocean have tunnels under the road to the beach and basements!

In conclusion, the South Florida market remains a haven for an ideal lifestyle, characterized by warm weather, low taxes, and a wealth of recreational opportunities. As noted earlier, the influx of financial firms has aptly earned the region the moniker “Wall Street South.” With its diversifying economy, South Florida continues to solidify its status as one of the nation’s most coveted real estate markets, showing no signs of slowing down in the near future.