Billionaires are driving real estate prices in South Florida to new records
From Palm Beach to Miami Beach, luxury home prices in Florida’s wealthiest enclaves are hitting new records as billionaires and millionaires continue to snap up properties.
The average sales price of a home in Palm Beach topped $20 million in the third quarter, making it by far the most expensive market in the country, according to data from Douglas Elliman and Miller Samuel. The average price per square foot of homes sold in Palm Beach reached $4,554, more than 2.5 times more expensive than in Manhattan.
“The prices are amazing,” said Chris Leavitt, a top Palm Beach agent with Douglas Elliman. “There is a very limited supply, particularly in the ultra-high-net-worth segment, where the clientele is eager for that fantastic lake or oceanfront property.”
South Florida’s mansion boom is being driven by the continued flight of millionaires and billionaires from high-tax states like New York, New Jersey and California, as well as the growth of Florida’s economy. Since particularly wealthy buyers generally pay for their properties in cash, they are less affected by rising mortgage interest rates.
The lack of inventory, particularly in sought-after waterfront locations, has caused prices to rise again.
According to Jonathan Miller, CEO of Miller Samuel, there were only 53 homes on the market in Palm Beach in the third quarter, a 61% decline from pre-pandemic levels. The lack of listed homes has reduced the number of sales, which fell 31% last year, he said.
However, agents expect low inventory to continue to put upward pressure on prices, making luxury properties expensive even for multimillionaires.
“You can still find a nice home here for less than $10 million,” Leavitt said. “I know that sounds like an alternate universe. Because yes, this is an alternate universe.”
In late July, a waterfront home that had last sold for $7.4 million sold for about $50 million. The seller was the estate of the late liquor dealer James Tigani Jr., and the buyer was said to be venture investor Harvey Jones.
Fashion tycoon Tommy Hilfiger sold a Palm Beach mansion for $41.4 million this summer, less than six months after he bought it for $36.9 million.
The record for the most expensive home sold in Palm Beach was set in April when luxury car dealer Michael Cantanucci paid $170 million for a 1.6-acre oceanfront mansion.
Leavitt said that while the summer was slow, buyers started flocking back in mid-September.
“Usually there isn’t that much going on in September, but the market gets hot at the beginning of the year,” he said. “These buyers are very quick. They call and say, ‘I’m flying there tomorrow.’ They fly there in their private jet, look at it, buy it and close within seven days. And in a month they’ll be back to move in. They want what they want, when they want it.”
Miami Beach has also seen price increases among wealthy buyers – particularly billionaires.
While the number of single-family home sales in the Miami Beach area fell 3% in the third quarter, the dollar value of sales increased 62% due to additional closings above $10 million, according to Corcoran.
According to Douglas Elliman and Miller Samuel, the average price of luxury homes in Miami Beach – defined as the top 10% of the market – rose to a record $25 million.
“The luxury and high-end real estate market does not appear to be tied to mortgage rates and the economy right now,” said Jonathan Miller. “Both Palm Beach and Miami Beach are decoupled from the interest rate trend.”
Tech billionaire Eric Schmidt and his wife are the latest billionaires to amass real estate collections in Miami. Realtors say the couple bought more than half a dozen homes in the Sunset Islands, spending more than $140 million. It’s unclear whether the Schmidts plan to live in Miami or what they plan to do with the real estate.
Hedge fund billionaire Ken Griffin continues to expand his presence on Star Island and recently bought back a property for $45.5 million. He sold the property to retired baseball star Alex Rodriguez in 2020 as part of a land swap. Griffin also paid $107 million for a historic waterfront property in Miami last year.
Jeff Bezos has also joined the billionaire beach club, spending $150 million on two adjacent properties in Indian Creek Village. The two properties give him a total of 4.6 hectares of land in an exclusive enclave and make him a neighbor of National Football League legend Tom Brady.
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