F
ive years after the coronavirus pandemic stormed into Palm Beach, its impact on the local real estate market still reverberates. The frenzy that gripped the island in 2020 has cooled, but prices remain higher and inventory scarce. As the town looks back on the past five years, it's clear that the health crisis upended the market in ways no one could have predicted.
The pandemic's arrival in Palm Beach was met with a directive from the Town Council to "shelter in place," but just six weeks later, out-of-towners began flocking to the island in search of a safe haven. Real estate observers were stunned as buyers descended on the island, often sight unseen, and snapped up properties at record-breaking prices.
Seasoned real estate attorney Guy Rabideau captured the mood in April 2020: "We've turned the corner on panic." But what followed was a boom that would astound even the most seasoned brokers. Prices doubled and tripled within a couple of years, with bidding wars becoming common. The demand for high-quality homes, particularly those on the water, drove up prices to unprecedented levels.
The year 2021 marked a watershed moment in Palm Beach real estate, with total sales volume breaking the $5 billion mark for the first time. New town sale-price records were set in six major property categories, and some of those records have since been broken. The boom also extended beyond Palm Beach, with neighboring areas like West Palm Beach, Manalapan, and Delray Beach seeing sharp spikes in sales and prices.
However, by 2023, the pandemic-induced frenzy had begun to cool, although Palm Beach still saw nearly $2 billion worth of single-family deals close that year. The total dollar amount of Palm Beach sales slipped to about $1.9 billion from $2.25 billion the previous year. Condo and co-op sales also slowed, as owners scrambled to meet strict state requirements for concrete restoration and reserve funds.
Today, while real estate sale prices in Palm Beach can still grab headlines, they are no longer escalating at the same pace. Asking prices have moderated, and wealthy buyers have become more discerning, taking their time to find the right property and engaging in hardline negotiations for prices. The limited supply of single-family residences continues to drive up prices, making it difficult for buyers who can't afford or aren't willing to pay the price of entry into the island's housing market.
Some sales still close at staggering prices, including a recent deal where two vacant oceanfront lots sold together for at least $160 million. However, real estate observers have noted a growing sense of uncertainty among some would-be homebuyers in the wake of President Trump's trade wars and executive orders. The island's housing market has also seen a flurry of price reductions since the New Year, especially for condos.
As Palm Beach looks to the future, one thing is clear: the real estate market entered a new era five years ago, sparked by the pandemic. Whether that era will continue or evolve remains to be seen, but one thing is certain – the impact of the pandemic on Palm Beach's housing market will be felt for years to come.
