Snowbirds heading from the Hamptons to Florida this fall will not just be returning to hot weather — the housing market is sizzling in the Sunshine State. Brokers in the popular winter destinations of Palm Beach and Naples describe a frenzied real estate market with an influx of young families and year-round residents pushing up prices and driving down inventory.
“There is insatiable buyer demand,” says Dana Koch of Corcoran’s Palm Beach office. “My list of buyers goes on and on and on. We’ve recommended to many of our clients to buy an interim place — a placeholder — while we continue to look for exactly what they are looking for.”
On the island of Palm Beach, about 30 single-family houses were listed for sale in August, compared with the usual 150, Koch says. The condominium and rental markets are also tight. Brokers attribute the high demand to families fleeing urban areas during COVID, the rise of remote work, low-interest rates and tax savings. Inventory is low at every price point and demand is especially high for homes under $20 million, Koch says.
“In years past, Palm Beach buyers came from the Northeast. That’s changed,” he says. “Not only are they coming from the Northeast, they’re coming from Illinois, Michigan and California.”
The neighboring city of West Palm Beach has become a global financial hub as a growing number of Wall Street firms have opened offices there. And many New York City shops and restaurants such as La Goulue and Sant Ambroeus have opened Palm Beach outposts.
“Palm Beach real estate is on fire,” says Chris Leavitt of Douglas Elliman. “Palm Beach is just changing before our eyes to become a New York City south.”
Even buyers seeking homes above $50 million are unable to find what they are looking for, he says.
“We need oceanfront mansions, $50 million and up. We need inventory in every category,” Leavitt says. “There’s nothing in any price point available.”
As COVID crippled the Northeast last winter and spring, much of Florida remained open, attracting a new group of buyers seeking in-person schools and more relaxed safety protocols, brokers say. The Delta variant has done little to deter them.
“It’s been an extremely wild ride over the last 17 months and I don’t see it slowing down anytime soon,” Koch says. “There’s just too much demand.”
Across the state, inventory in Naples is also at an all-time low, according to Dennis Bowers of Compass. The city had an influx of residents from New York City last spring and there were few homes on the market, he says.
There were 950 total listings in Collier County in April and May, compared to the usual 8,000, Bowers says. In mid-August, there were 1,115.
“When things are put on the market, if it’s a quality home and it’s priced right, there’s still a pretty substantial push for properties down here,” Bowers explains.. “It’s not the frenzy that it was in March, April and May. In 15 years, I’ve never seen anything like that. But it was just a very unique time.”
Homes between $700,000 and $1.2 million are most in demand, Bowers says, along with anything on the water. More and more buyers attracted to the golf courses, boating, Jet skiing, paddleboarding and low residential taxes have decided to make Naples their permanent home, he says.
“Naples was always a well-kept secret until about 18 months ago,” he says. “The secret is out.”
This article appeared in the Labor Day issue of Behind The Hedges magazine. Read the digital edition here.