South Florida real estate prices are breaking records thanks to billionaires.

With an average sale price of almost $20 million in the third quarter, Douglas Elliman and Miller Samuel data shows that Palm Beach is by far the most expensive real estate market in the nation. More than 2.5 times more expensive than Manhattan, Palm Beach residences sold for an average price per square foot of $4,554.

Top Douglas Elliman broker Chris Leavitt of Palm Beach noted, “The prices are mind-blowing. “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.”

Both the expansion of the Florida economy and the ongoing exodus of millionaires and billionaires from high-tax jurisdictions like New York, New Jersey, and California are contributing to the mansion boom in South Florida. Extremely rich buyers are less impacted by rising mortgage rates because they typically pay cash for their real estate.

The scarcity of inventory has driven up prices once again, particularly for highly sought-after coastal properties.

According to Jonathan Miller, CEO of Miller Samuel, Palm Beach had only 53 residences listed as of the third quarter, 61% fewer than before the epidemic. Sales were down 31% over the previous year, he claimed, and this decline is attributed to the lack of listed properties.

Yet, brokers say the low inventory will continue to put upward pressure on prices, making trophy properties expensive even for multimillionaires.

“You can still find a nice house here for under $10 million,” Leavitt said. “I know that sounds like an alternative universe. Because yes, this is an alternative universe.”

In late July, a waterfront home that had last sold for $7.4 million went for about $50 million. The seller was the estate of the late liquor distributor James Tigani, Jr., and the buyer was reported to be venture investor Harvey Jones.

Fashion tycoon Tommy Hilfiger this summer sold a Palm Beach mansion for $41.4 million, less than six months after he bought it for $36.9 million.

The record for the most expensive home sold in Palm Beach was set in April, when luxury car dealer Michael Cantanucci paid $170 million for a 1.6 acre oceanfront mansion.

Leavitt said that while the summer was slow, buyers came rushing back starting mid-September.

“Usually September isn’t that busy, but the market is heating up earlier this year,” he said. “These buyers move very fast. They will call and say, ‘I’m flying down tomorrow.’ They’ll fly down on their private jet, they will look, buy it and close within seven days. And they’re back in a month to move in. They want what they want, when they want it.”

Miami Beach has also seen a spike in prices from wealthy buyers – especially billionaires.

While the number of sales of single-family homes in the Miami Beach area fell 3% in the third quarter, the dollar value of sales jumped 62% due to more closings upward of $10 million, according to Corcoran.

The average price of luxury real estate in Miami Beach – defined as the top 10% of the market – surged to a record $25 million, according to Douglas Elliman and Miller Samuel.

“The luxury and high-end housing markets seem untethered to mortgage rates and the economy right now,” Jonathan Miller said. “Both Palm Beach and Miami Beach are disconnected from the interest rate trend.”

Tech billionaire Eric Schmidt and his wife are the latest billionaires to start amassing real estate collections in Miami. Brokers say the couple has purchased more than a half dozen homes on the Sunset Islands, spending upward of $140 million. It’s unclear if the Schmidts plan to live in Miami or what they plan to do with the properties.

Hedge-fund billionaire Ken Griffin continues to expand his footprint on Star Island, recently buying back a piece of property for $45.5 million. He had sold the property to retired baseball star Alex Rodriguez in 2020 as part of a land swap. Griffin also paid $107 million last year for a historic waterfront estate in Miami.

Jeff Bezos has also joined the billionaires beach club, spending $150 million for two adjoining properties in Indian Creek Village. The two properties give him a combined 4.6 acres in an exclusive enclave and make him a neighbor to National Football League legend Tom Brady.

The article can originally be found on NBC

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