Over the past year, the real estate market has gone berserk. Homes sell to millions of people in Boise and Albuquerque. Buyers are offer to give their firstborn the name of sellers. In this new series, Realtor Diaries, we talk to the people at the center of it all: 2am emails from customers; 4 pm working days, six days a week; and cash offers from people who have never seen the property they are buying.
There is only about 2,500 total homes in Palm Beach, a small seaside town in South Florida known for its extraordinarily wealthy residents – at least 48 billionaires have homes there, according to some reports, including Charles Bronfman, Stephen Ross and a crowd of Kochs. Since the pandemic, and since several large hedge funds have moved their offices around the city (not to mention those interested in flocking to the de facto home of our former President Donald Trump), there has been a massive onslaught of buyers. By property record, there have been 22 sales over $ 40 million to Palm Beach Country since March and 35 over $ 30 million, a 177.8 percent peak in luxury sales compared to the same quarter last year. We spoke to two longtime Palm Beaches realtors – Linda Olsson, who specializes in luxury homes (“properties $ 100 million and under”, she likes to joke), and Paulette Koch (no relation), who focuses on “very high end “.
The prices here are unprecedented. Everyone in New York, New Jersey, California is taxed too much, and they’re done, they’ve had enough. They’re all rushing here.
For example, a lot that sold two years ago for $ 7 million is now just over $ 12 million. I just sold a house for $ 17 million that isn’t even on the water. Seventeen million was once a waterfront prize. We’re selling another house just down the street, but the current owners stay there until May – it’s called a land lease. They sell it for $ 17 million, but the buyer said they would make $ 20 if they moved now. The owner said, “The extra few million is not going to change my life. My wife wants to stay there, so the answer is no. I mean, a tiny apartment I just sold by the ocean – about 1,600 square feet – cost $ 3.6 million. And, I mean, there’s nothing for sale. A small apartment that just arrived had 18 visits on the first day and 10 offers. And who gets it? Typically someone who pays more than the asking price and has no inspection.
And then there are the people who buy without even seeing the properties. I just did three. We do it over the phone. I sold one to someone in London. A lady from Texas never came and she just said I would take it. A lot of people fear that if they fly down they will miss it.
I sold $ 300 million in the last six months. That’s a lot of real estate for sale in six months for one person. Other agents sold a lot more than that. Last year was good; this year is better.
There are a lot of people who don’t want to sell, and it’s the same line. “I could sell my house now, but where would I go? Because in their opinion, there is nowhere to go. I mean, you can hardly find a home in a golf course community right now. It always has been, however – a major player at Goldman Sachs wanted to offer my client $ 75 million a few years ago, and the salesperson said, “Honey, what would I do with the money? She didn’t take it.
That being said, a lot of people here aren’t even at home. Palm Beach has always been a land bank. It is a great place to put your money. Interest rates are nothing. Mortgage rates are nothing.
There have been some weird exchanges lately, however. I just sold a house to someone in Nigeria. On the phone. They just wanted to buy a house here, and I said, “As long as you have a lawyer from the United States, fine. We do not launder money. I don’t take money from just anyone. This particular person is going to tear down the house and hire an architect.
I think Palm Beach is getting younger and younger. The schools are totally reserved. So many people apply to private schools – in the past this was not always the case. These people in particular are leaving states with high taxes. They want to settle here. They have to register their children for school, register their car here. All.
Last year, during COVID, the Palm Beach Day School received 80 new applications out of nowhere. It’s a small school, so that’s a lot of kids. If they can’t get in, there’s Benjamin. There is another school that Koch founded. The schools are pretty good. Then they go to preparatory school.
A lot of the people who come are bankers. People from hedge funds. The people of Goldman. Morgan Stanley. Lots of bankers. Sneaky stallone bought here. Hilfiger own here. Wellington, Bill Gates and their children, Bloomberg. Lots of billionaires; celebrities are less common.
I’ve been in the real estate business since 1987. And it’s the fastest paced market I’ve ever seen – so the inventory is pretty thin and limited as a result. We nicknamed it the Roaring Twenties. You feel very lucky that we are in the right place at the right time. Palm Beach has always been a popular location for many reasons. It is a unique enclave. There are three bridges that allow you to enter, and once you’re here it’s like, Oh, I’m not leaving this place. We have our own police department. We have our own municipal recreation center. We have our own municipal tennis court. We have our own golf course. You have security and privacy. And it’s filled with wonderful, philanthropic people who have had this sense of community and have worked hard all of their lives and are happy to give back, so it’s very charitable. Virtually everyone who chooses to live here comes from another location and has multiple homes. So anyway, we have a limited supply in general. But the pandemic was like the perfect storm, when you really think about it. You have the advantage of being in Florida, a tax haven; the weather; all of the things I just mentioned – and then there’s the pandemic.
Politics is something I never discuss with my clients. It’s one of the no-no’s, but I don’t think people come just for that purpose, because of politics. But we never discuss it, and we are open to everyone.
But back to the inventory: he’s always been slim. We have to beat the sidewalk every day, make phone calls. Trying to convince people to sell. There are 31 active properties available throughout Palm Beach at this time. There are very few condos available for sale. Everyone is aware that there is a lack of product. I have sold quite a few properties through FaceTime alone and I’m proud to say that none of my buyers have come and been disappointed. They are just rallying. They say, “Paula, that’s perfect. Pay above the full price. Just give me the property. We must act quickly. Sometimes within hours. Certainly no more than 24.
As for what people really want? Well, the direct seaside is the gold standard. You can’t do better than this. And the direct seaside gives you the most land overall, as a rule. So people want big estates, and it’s like the cream of the crop, and they’re going to go. It’s $ 35 million right now – plus that’s what you’re looking at. A fabulous beach and fabulous toes in the sand are what people desire the most. Stylistically, people love to buy homes designed by those great architects of the 1920s and 1930s who really established Palm Beach. Meisner. Mediterraneans and Special Colonials.
But what we found out, and I think I coined the term, because now I hear it’s used everywhere, is that people are buying placeholders. Reserved spaces are temporary places that people buy just to establish their residence, as there is also a lack of rentals. A big lack of rentals and especially decent rentals. So they buy a placeholder, move to Palm Beach, then they’ll start serious shopping – and they’ll be ready to act when a place shows up in 12 months.
We have done [the placeholder] suggestion a long time ago. Just get yourself a seat; we can resell it to you. Even if you become whole, even if you lose a little, you have to be pragmatic in the way you explain things to your buyers, and the sellers are happy. They move on to their next purchase.
For example, I had a couple looking to spend $ 10 million or $ 15 million, and I showed them whatever was available. They are from Connecticut. The northeast is large; we also work with a lot of people from Chicago and California. There were a few choices, but nothing really made their boat float, so they came to the conclusion … Well what less can I get while waiting for the house that I really love. So I found them a house, four and a half million, much too small for them but they have their foot in the door. It’s a good location but a small lot. I had another client, $ 20 million or $ 30 million buyers. They want to be on a lake. But they realize that is just not realistic at the moment. They are therefore ready to take a smaller place in the meantime.
But there are a lot of people right now that I can’t find a home for yet. You should see my list – it’s big. I’m talking about a minimum of 50 people, just on hold.
So I’m just trying to find more houses. This process is quite simple: you call. I call the owners – the people who own properties – and I just introduce myself. Fortunately, I’m a little well-known here, to say the least. You say, “I’m not sure you’ve considered selling, but I have people who are interested. A lot of the reactions are, “Gee, I’d like to sell. Tell me where I’m going. And it becomes a problem. Other owners are very open to the fact that they will find out.
The other brokers and I are trying to help each other out, quite frankly. They might not have buyers who match what they know. This is where the relationships come in. What’s also interesting is that of the 31 houses, more than half of them are over $ 20 million.
But you should see the pace of it. My Saturday evenings are from 9 p.m. to 10 p.m., I’m on the phone: conference call, contractor, architect, buyer. I happen to be a widow so it’s kinda perfect for me in the end, but I have a life, by the way. And it’s like Help, this is not a way of life. Everyone knows I’m 24/7, but it’s kinda crazy.