Situated along Florida's stunning Atlantic coast, 90 minutes north of Miami and just a 30-minute drive from Boca Raton,
Palm Beach represents one of the country's most genuine enclaves of pure luxury. Aptly nicknamed "The Island," the barrier island stretches 18 miles between the Intercoastal Waterway — also called Lake Worth Lagoon — and the Atlantic Ocean.
This coveted strip of oceanfront real estate has always been a magnet for the wealthy, where properties routinely command prices in the tens of millions, defining the norm rather than the exception along Palm Beach's renowned shoreline. Read on to explore the current landscape of the luxury housing market and see where the Palm Beach real estate forecast is headed for buyers and sellers looking into the year's final months.
A Popular Market for the Affluent
According to a recent, unofficial census conducted by the
Palm Beach Daily News, based on
Forbes' 2023 list of the world's billionaires, 57 of the globe's highest earners own or maintain real estate ties of some form on the island. This impressive number of billionaires is indicative of an increasingly popular luxury Palm Beach real estate market.
Palm Beach is more than just a destination for the world’s wealthiest individuals; it’s an exceptional place to call home. With its dazzling beaches, upscale shopping, fine-dining establishments, and glorious weather (not to mention some of the most spectacular sunsets you’ll ever witness), there has never been a better time for homebuyers to leave their mark on this community by investing in a high-profile residence.
Current Inventory Levels
According to the latest update from
South Florida Market Statistics, the Palm Beach luxury market had 3,765 active listings for single-family homes in September 2023, which is a 5.3% decrease compared to last year. The good news, however, is that this level is still considerably higher than two years ago when the available inventory sat closer to
2,000 active listings. The expanded inventory has resulted in a steadily increasing supply of about 3.3 months of available inventory, compared to 2.9 months in 2022 — a
13.8% increase year-over-year.
Condominiums in the area are showing more robust inventory levels, with September’s
active listings sitting at 3,763, which is a 34.1% increase from the prior year. The overall supply stands at 3.8 months in this segment — an impressive 72.7% rise from a year ago.
It’s important to note that while the increasing inventory levels for single-family homes and condos represent a far more equitable marketplace than seen during the pandemic, a fully balanced market favoring neither buyer nor seller occurs with six months' supply of inventory. It’s clear that this balance hasn’t been reached, keeping the housing scene in a solid sellers’ market.
However, the uptick in inventory remains excellent news for buyers patiently waiting to break into the Palm Beach real estate market. It suggests a broader portfolio of options, including homes and condos featuring frontage along the Atlantic Ocean or Intracoastal Waterway. Indeed, it's a massive bright spot for potential homeowners when considering that for the entirety of 2021, available inventory for both property segments barely rose above a month.
Sellers are also poised to benefit from still-healthy demand. However, it is crucial to note that the pace of sales is slowing compared to previous years. Specifically, closed sales are
down by 5.81% from a year ago for single-family homes and down by 1.4% for condos.
Median Home Prices
From a financial perspective, price fluctuation is minimal, though the condo market continues on an impressive three-year streak of year-over-year gains. The median sale price for a luxury
single-family home in Palm Beach is currently $600,000 — a 3.45% increase over September 2022. The condo market is also showing an increasing value year over year, with September 2023 closing with a median sale price of $309,900 —
6.9% above that of September 2022.
That said, single-family homes and condos are entering a far more stable pricing environment. The immediate future could prove a win-win situation for both buyers and sellers ready to make moves in the market.
The current market climate is conducive for buyers securing investments without the risk of immediate depreciation. Sellers can continue to extract value from their properties thanks to resilient pricing trends and the high level of Palm Beach's allure. The latter is especially true for sellers who held assets back from the pandemic-era market but still stand to make a sizable profit thanks to appreciation over the past three years.
In addition, it’s prudent to note that the luxury Palm Beach real estate scene commands much higher prices than the norm. Prices start at upwards of $5 million, soaring up to $50 million or into the hundreds of millions for the most extravagant and spacious properties right along the coast. These astounding residences feature unrivaled views of the waves, custom architectural details, impeccable landscaping, and all the luxurious amenities imaginable.
Contract Timeframe and Mortgage Rates
An additional parameter worth accounting for is the median time to contract. As of September 2023, the data reflect a
24-day timeframe for single-family homes and 33 days for condos. In both instances, it's a significant jump from September 2022.
As previously noted, sellers maintain a slight edge in the market, but the balance is shifting. More inventory, steadying sales prices, and longer listing periods give sellers their first taste of competition in some time. The main reason for the shift involves the single most significant real estate headline over the past 12 months: mortgage rates.
While the overall housing market remains robust and highly sought-after, much of the newfound balance results from interest rates on the rise. As of October 2023, the rate for a 30-year fixed-rate mortgage is approximately
6.5 to 7% — a far cry from the 2.87% rate at the end of August 2021.
With home prices at or near all-time highs and mortgage rates soaring, some buyers are taking a step back and evaluating their next home purchase with a return to more attentive due diligence.
Forecasting the Remainder of 2023
No doubt, it's a much different landscape in Palm Beach real estate than a year ago. Prospective buyers are entering an advantageous window of opportunity with prices leveling off and inventory increasing.
Market outlook for Palm Beach property sellers
If you're considering selling a luxury property, it's still an excellent time to maximize your home's overall value, but expect to put in a little work to stand out in the marketplace. With prices relatively stable, growing inventory, and more calculating buyers, you'll need to increase your awareness of shifting market dynamics.
Pricing strategy has never been more critical, and elevating your property’s presentation holds the key to unlocking a highly lucrative sale. In a market where every new listing represents high-end luxury, those who can distinguish themselves from the competition will continue to command the highest, top-of-the-market offers.
Market outlook for Palm Beach buyers
Despite higher interest rates, those seeking to purchase a home or condo in Palm Beach have time on their side and a broader range of properties from which to choose. Such an environment means less pressure to act immediately and an opportunity for exploring and comparing multiple options.
Most notably, with sellers facing more competition on the listing side, the next several months may also see more deal-cutting. This will be especially true with listings where the owner is highly motivated to sell.
Buy or Sell with a Trusted Palm Beach Expert on Your Side
Whether it's a vacation retreat in the heart of
Palm Beach, a secluded oceanfront oasis, or a luxe high-rise condo overlooking it all,
contact Samantha Curry to begin your home-buying or selling journey. As one of Florida's most highly acclaimed brokers and expert in the Palm Beach luxury real estate market, Samantha is ready to guide you to success.
*Header photo courtesy of Samantha Curry
