The real-estate frenzy sparked by the arrival of coronavirus pandemic in 2020 has had lasting effects on Palm Beach real estate. Here are some highlights.
Video: Morning traffic enters Palm Beach over Flagler Memorial Bridge
Video: Early morning drivers enter Palm Beach across the Flagler Memorial Bridge February 13, 2025.
- Five years after the coronavirus pandemic arrived in Palm Beach, its boom-time effects on local real estate continue to resonate.
- Although the real estate frenzy has cooled a bit over the past two years, home prices in Palm Beach remain higher and the number of houses for sale fewer than before the pandemic.
- Within a couple of years of the pandemic’s arrival in 2020, asking and sale prices frequently doubled — and sometimes even tripled.
As Palm Beach looks back five years to the arrival of the coronavirus pandemic, few could have predicted how the health crisis would upend the town’s real estate market.
But “upend” seems almost too tame a word to describe how the pandemic helped propel Palm Beach residential sale prices, asking prices and property values into the stratosphere.
Such a scenario, however, seemed remote when the Town Council issued its first pandemic-related directive on March 16, 2020. Advising residents to “shelter in place” because of the health crisis, the council’s directive came four days after the World Health Organization declared COVID-19 to be a global pandemic.
And in those first days, new real estate activity on the island almost immediately ground to a halt.
Yet barely six weeks later, real estate observers were watching, many in disbelief, as out-of-towners descended on the island en masse, hoping to secure a house in which to weather the pandemic.
Consider how seasoned Palm Beach real estate attorney Guy Rabideau summed up the situation for the Palm Beach Daily News on April 29, 2020, about six weeks into the pandemic. “During the initial phase (of the health crisis), a lot of people panicked and tried to cancel (real estate) contracts. But activity picked up last week,” Rabideau said at the time, “and this week it appears to me we’re having a near-normal week for the season. I can’t quite believe that, but it looks like we have turned the corner on panic.”
The panic somehow had melted into the beginnings of real estate boom that would astound even seasoned brokers and agents on the island. And although the frenzy has cooled over the past two years, its effects still linger in Palm Beach, where prices remain far higher and the number of houses for sale far fewer than before the pandemic.
On the anniversary of the Town Council’s initial COVID-19 directive, here are five local real estate takeaways from the pandemic and its aftermath.
1. Why did buyers flock to Palm Beach after the pandemic began?
Initially looking to buy or rent spacious, warm-weather havens in which to ride out the health crisis, buyers were also drawn by the state’s favorable tax picture relative to other states and by Palm Beach’s longtime attractions — its security, natural beauty, handsome architecture and resort-like atmosphere.
As the work-from-anywhere trend became firmly entrenched, more buyers chose to make Palm Beach their primary residence — and they were younger, many with children. Wearing masks and adopting “social distance” techniques, house-hunters put to their real estate agents questions about the quality of area schools and universities, medical facilities and even cultural venues, all factors important to people who were putting down roots.
One agent even described “planeloads” of investment bankers, many arriving by private jet, who descended on Palm Beach looking for properties — and with the cash to buy them, thanks to Wall Street’s overall strong performance in the years leading up to the pandemic.
2. How did the laws of supply and demand affect the island’s housing market?
With real estate activity ramping up during the second half of 2020, Palm Beach’s available rental inventory dwindled. And as the pandemic dragged on, buyers began tearing through the supply of single-family homes, property records show. Once those were depleted, a spurt of condominium and cooperative-apartment purchases followed.
And as any first-year economics professor might expect, the laws of dwindling supply and intensifying demand began driving up home prices. The growing scarcity of residences was exacerbated by would-be sellers who decided to stay put, fearing they would not find anything comparable to their homes on the island. More than one real estate agent reported selling a house to an out-of-state buyer sight unseen.
Within a couple of years of the pandemic’s arrival, asking and sale prices had frequently doubled — and sometimes even tripled. Bidding wars became common, according to reporting by the Palm Beach Daily News, which has tracked pandemic-linked sales in detail.
And as usual in the town’s single-family market, the demand was greatest for better-quality homes that were new, newer, recently renovated and on the water.
3. What made 2021 such a key year for Palm Beach real estate?
Perhaps the most dramatic effects of the boom came during the watershed year of 2021, when total residential real estate sales volume in Palm Beach — including single-family homes, condos, co-ops and townhouses — for the first time broke the $5 billion mark. That figure nearly doubled the tally for 2020, which had set its own town record at $2.9 billion.
By contrast, in the pre-pandemic year of 2019, the total sales volume had clocked in at about $1.3 billion.
The year 2021 also saw new town sale-price records set in six major property categories in Palm Beach — ocean-to-lake estates; oceanfront homes without lake frontage; lakeside properties; condos; townhouses; and vacant lots. Some of those records have since been broken.
Competition for the limited number of properties led to some striking flips during the height of the pandemic, including one memorable deal that closed in May 2021. That’s when paycheck-loan entrepreneur Allan Jones sold, for a recorded $41.7 million, a lakeside estate that he had bought about four months earlier for $26.2 million at 320 Island Road, stunning real estate brokers and agents town-wide.
The boom also stretched into other parts of Palm Beach County. The effects have been particularly noticeable in West Palm Beach, where financial firms and other companies have turned a once-sleepy downtown into a business center that promoters have dubbed “The Wall Street of the South.”
Other house-hunters headed south to Manalapan and Delray Beach or north to gated communities in the Palm Beach Gardens area and Jupiter. All of those areas saw sharp spikes in sales and prices in 2021.
4. When did Palm Beach’s real estate market begin to cool?
By the end of 2023, real estate agents and brokers noticed that the pandemic-induced frenzy of sales had begun to cool, although Palm Beach still saw nearly $2 billion worth of single-family deals close that year, according to a sales report issued by the Frisbie Palm Beach Real Estate Group.
The total dollar amount of Palm Beach sales of single-family houses, townhomes and vacant land slipped to about $1.9 billion in 2023 from $2.25 billion the year before, the Frisbie report showed, noting that the bloom also was off condo and co-op sales.
Many condos and co-op buildings, meanwhile, have been facing their own challenges, as owners there scramble to meeting strict state requirements for concrete restoration and reserve funds in the wake of the 2021 deadly collapse of a major multifamily building in the Miami suburb of Surfside.
5. Where does the Palm Beach real estate market stand today?
Although real estate sale prices in Palm Beach can still grab headlines, they are no longer escalating at the whirl-a-minute pace they once were. Asking prices, too, have in many cases moderated as sellers have gradually let go of expectations that no longer align with the realities of the post-pandemic boom. Wealthy buyers too, have become more discerning, once again taking their time to find the right property and engaging in hardline negotiations for prices.
That’s especially true for people who may have bought something less than the home of their dreams during the mad rush of the pandemic’s early years, just to get a foot in the island’s door. Over the past two years, they have been watching the Palm Beach market carefully for homes that better suit their needs.
Even so, properties continue to sell for far more than they did before the health crisis hit, a direct reflection of what is still a relatively limited supply of single-family residences, according to sales reports issued by real estate agencies that do business on the island.
The higher price bar also has put Palm Beach out of the reach of buyers who can’t afford — or aren’t willing to pay — the price of entry into the island’s housing market, which generally has settled in the $11 million-to-$14 million range for an entry-level single-family house.
Some sales of Palm Beach real estate, of course, still close at staggering prices. In early February, two vacant oceanfront lots measuring 2.26 acres sold together for a price said to have hit at least $160 million in a private deal at 1063 and 1071 N. Ocean Blvd. for which no deed has ever been recorded. Last year, too, saw two other properties sell at eye-popping prices that ranked them among the country’s largest real estate transactions — a renovated-and-expanded mega-mansion on private Tarpon Island sold for a recorded $150 million; and an oceanfront landmarked estate at 455 S. Ocean Blvd. changed hands privately for a recorded $148 million.
And November’s election of President Donald Trump to his second term gave an immediate and noticeable boost to the market as Palm Beach — home to the chief executive’s residence at his Mar-a-Lago Club — once again landed in the international spotlight.
But real estate observers also have noted a growing sense of uncertainty among some would-be homebuyers over the past few weeks in the wake of Trump’s trade wars with Canada, Mexico and China; the firings of thousands of federal employees; and his myriad executive orders to shake up the way the government has traditionally done business.
The island’s housing market has also seen a flurry of price reductions since the New Year, especially for condos.
Whether the so-called “Trump bump” lasts, one thing is clear: Palm Beach real estate entered a new and unanticipated era five years ago, sparked by — of all things — a deadly and tragic global pandemic.
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Darrell Hofheinz is a USA TODAY Network of Florida journalist who writes about Palm Beach real estate in his weekly “Beyond the Hedges” column. He welcomes tips about real estate news on the island. Email dhofheinz@pbdailynews.com, call 561-820-3831 or tweet @PBDN_Hofheinz.
