Palm Beach is one of the most desirable destinations in the United States. Tropical weather and beachfront property are the hallmarks of this coastal paradise.
It should come as no surprise that home prices are surging in Palm Beach. In fact, the median sales price in Palm Beach’s luxury market segment increased by nearly 49 percent last year.
The market signs indicate that investing in Palm Beach is a wise financial strategy. Read on for the ultimate guide to Palm Beach home prices. Explore why Palm Beach luxury homes are rapidly increasing in value.
Palm Beach Homes Prices
The price of Palm Beach luxury homes is soaring. Palm Beach is home to some of the most luxurious and sought-after mansions in the world.
Investors are always looking for a way to get into Palm Beach. There are both mansions and luxury condos to invest in.
The price of these assets is rising quickly due to market conditions. Obviously, demand is high as many people want to enjoy Palm Beach’s weather year-round.
Supply is another factor driving the surging home prices. The number of available properties simply cannot keep up with the raging demand. At one point this summer, there were just 25 houses or condos for sale.
As a result, home prices are rising rapidly. The median price for a single-family home is now $11.7 million. This represents a 38 percent increase from the year prior.
The price per square foot for a Palm Beach home is more than $1500. This is nearly as high as dwellings in Manhattan.
Investors want to know if this rapid growth in home prices is sustainable. The truth is that soaring home prices have not deterred real estate activity.
In fact, the number of single-family homes sold in Palm Beach increased by 90% in the second quarter. This high volume contributed to the current inventory shortage.
The lack of supply is putting sustained upward pressure on home prices. It is clear to the investors’ class that the Palm Beach home market is going to remain hot for many years to come.
There are many other factors that contribute to a scorching hot Florida real estate market. From societal reasons to economic opportunity, there are many reasons why consumers believe the grass is greener in Florida. Continue reading for a brief explanation of these factors:
There is no question that Florida is one of the most popular places to relocate to in the nation. The 2020 United States Census confirmed the status of Florida’s popularity.
In the decade predating the U.S. Census, the state of Florida added roughly 2.7 million new residents. The state’s total population is now over 21.5 million. This accounts for a nearly 15 percent growth rate over the course of the last decade.
The tiny and exclusive town of Palm Beach is popular as well. The population increased by almost 11 percent during the same time period. For a small town, this growth rate is an impressive feat.
The population growth in Florida and Palm Beach confirms that demand will continue to be strong. Home shoppers and investors want a piece of the action in the Sunshine State.
There is a major paradigm shift occurring in the global economy. The Covid-19 pandemic accelerated some trends that were already underway.
For starters, one major change is the shift to remote working. Thanks to Covid-19 stay-at-home orders, approximately 45 percent of American workers are either part-time or fully remote. What does remote working have to do with real estate investing?
In the past, wealthy clients were required to live near their place of employment. Your major stockbrokers and major executives lived in Manhattan for easy access to work.
Full-time remote work allows wealthy clients to live in Florida and support their office in Manhattan. Now, they can make Palm Beach their permanent home and enjoy the tropical climate year-round. This work flexibility helps maintain the existing high demand.
The state government’s response to Covid-19 is another factor. Many people in the northeastern United States want to move to areas with fewer Covid-19 precautions. Perhaps they disagree with tight restrictions like mask mandates.
This may explain why New York’s population declined while Florida’s is on the rise. Florida is not imposing strict Covid-19 measures and is instead allowing people to manage their own health. This is another reason why you see more people relocating to Florida.
Florida is also appealing from an economic perspective. There are no state income taxes in Florida. In addition, property taxes are considerably lower than in states in the Northeast.
In the past, homeowners were more willing to deal with higher taxes due to the State and Local Tax (SALT) deductions. These IRS rules allowed you to deduct high property taxes from your federal income taxes.
However, the tax cut passed during the Trump administration capped SALT deductions at $10,000. Losing this tax benefit made it even more appealing to relocate to low-tax states.
Another economic reason to invest now is low-interest rates. It is wise to seek financing now instead of waiting. The U.S. Federal Reserve has indicated that they plan to start raising rates in the near future.
This means higher financing costs for people taking out a mortgage in Palm Beach. Instead, you should act aggressively in the short term to secure a low-interest rate if you are financing.
Your Guide To Palm Beach Home Prices
All of the reasons outlined above reinforce that high demand in Palm Beach is here to stay. Palm Beach is a small and exclusive town. There is limited supply and buyers jump at the opportunity to get in.
High demand is not expected to ease given economic and societal factors. Florida is a popular destination for people looking to relocate. Wealthy clients are coming in droves from former financial epicenters like Manhattan.
Interest rates are low for the moment and investors should act aggressively now. Getting in Palm Beach now allows you to ride the home price wave to larger profits.
If you are interested in Palm Beach home prices and want to learn more, contact us today to speak with a professional.