The luxury real estate market in South Florida has seen unprecedented growth as billionaires and millionaires continue to flock to the region, driving home prices to new heights. From Palm Beach to Miami Beach, these affluent buyers are reshaping the housing landscape, making once-expensive properties seem even more out of reach for the average homebuyer.
Palm Beach Leads the Way with Record-Breaking Prices
According to data from Douglas Elliman and Miller Samuel, Palm Beach has emerged as the most expensive real estate market in the United States. In the third quarter of 2023, the average sale price for a home in this exclusive area surpassed $20 million. The average price per square foot also skyrocketed, reaching $4,554—more than 2.5 times the cost of homes in Manhattan.
Chris Leavitt, a top broker with Douglas Elliman in Palm Beach, emphasizes that the limited availability of ultra-luxury homes is fueling this surge in prices. “There is a very limited supply, especially at the ultra-high-net-worth end, where the clientele is all clambering for that amazing lakefront or oceanfront property,” Leavitt says. The continued influx of wealthy buyers, many of whom are paying in cash, is largely driving this trend. These buyers are often less concerned about the rising mortgage rates, which are impacting other buyers across the nation.
The Impact of Low Inventory
South Florida’s booming mansion market has been further impacted by a significant shortage of available homes. In Palm Beach, the number of homes on the market has dropped by 61% compared to pre-pandemic levels, leaving only 53 homes for sale in the third quarter. As a result, the number of sales has also decreased, falling 31% year-over-year. However, the tight inventory has led to even more intense bidding wars for the limited supply, further pushing up prices.
Leavitt describes the situation as a surreal one for many. “You can still find a nice house here for under $10 million, but that sounds like an alternative universe,” he says, highlighting how extraordinary the current market has become.
One particularly striking example of the market’s volatility occurred in late July, when a waterfront home that had previously sold for $7.4 million was resold for approximately $50 million. The sale was part of an ongoing trend where wealthy individuals are paying far more than previous owners did for their homes.
Miami Beach Also Sees a Surge in Luxury Sales
Miami Beach is not far behind Palm Beach in terms of price hikes. While the number of single-family home sales in the area dropped by 3% in the third quarter, the total value of these sales jumped 62% due to an increase in properties selling for $10 million or more. According to Douglas Elliman and Miller Samuel, the average price of luxury real estate in Miami Beach has now reached a record $25 million.
As in Palm Beach, Miami Beach’s high-end market appears to be detached from broader economic trends. The real estate boom in these exclusive locales is not slowing down, even as interest rates remain high. Jonathan Miller, CEO of Miller Samuel, remarks, “The luxury and high-end housing markets seem untethered to mortgage rates and the economy right now.”
Billionaires Continue to Expand Their South Florida Footprints
The trend of billionaires flocking to South Florida is not new, but it is accelerating. Tech billionaire Eric Schmidt, for instance, has been buying up multiple properties on the Sunset Islands in Miami Beach, spending over $140 million. Schmidt’s purchases are part of a broader trend of billionaires establishing expansive real estate collections in the area, whether for investment or as personal residences.
Similarly, hedge-fund billionaire Ken Griffin continues to increase his holdings in South Florida, recently buying back a piece of property on Star Island for $45.5 million. He had sold this property to retired baseball star Alex Rodriguez in 2020 as part of a land swap. Griffin also purchased a historic waterfront estate for $107 million in 2022.
Another notable figure in the South Florida real estate boom is Jeff Bezos. The Amazon founder purchased two adjoining properties in Indian Creek Village, paying a combined $150 million for the 4.6-acre plot. These properties, located in one of the most exclusive neighborhoods, put Bezos in close proximity to fellow billionaire Tom Brady.
The Future of South Florida’s Luxury Market
As long as demand continues to outpace supply, it seems likely that South Florida’s luxury real estate market will remain strong. With wealthy buyers willing to pay top dollar for prime waterfront locations, the prices of homes in areas like Palm Beach and Miami Beach are set to keep climbing. For those hoping to enter the market, the current trend makes it clear that, for now, these areas are firmly within the realm of the ultra-wealthy.