Palm Beach is known for its hot summers, with the mercury often topping the 100-degree mark in July and August. However, right now something else is scorching in the place famously known the world over as “The Island”: the real estate market.

“While the housing market is strong in many parts of the country, it’s absolutely on fire in Palm Beach,” commented Paul Kaulesar, a real estate professional and principal of PRKRealtor in West Palm Beach. “Bidding wars are the norm, and anyone who is fortunate to find something they like and can afford should jump on it immediately.”

There are a few factors that are all creating a potentially a once-in-a-lifetime opportunity for sellers who want to cash in. To start with, there is the axiom that lies at the heart of free market economics: demand is far outstripping supply, and there is no way for the latter to catch up.

“In certain markets around the country, developers can build out or they can build up,” commented Paul Kaulesar, whose real estate firm specializes in Palm Beach luxury homes. “But that is simply not an option in Palm Beach. One of the signature features that makes Palm Beach unique is that it is breathtakingly and strikingly gorgeous. The notion of mass-development is a non-starter. Basically, if someone wants to move into Palm Beach and doesn’t want to potentially wait years to buy a lot and custom build something from scratch, they are going to have to focus on already-built properties — and there just aren’t many of them available. And that’s not surprising. Palm Beach is not a place that people want to get away from.”

Speaking of getting away, there is another key factor that is making Palm Beach the center of the real estate universe: the coronavirus pandemic.

“When the pandemic erupted in early 2020, many people in cities like New York — especially older and financially well-to-do couples with an empty nest — realized that it was safer in terms of their health to relocate to a place with a much lower population density,” commented Paul Kaulesar, whose real estate philosophy is centered around delivering exceptional, world-class client service. “They also realized that even if COVID-19 vaccines and therapies start rolling-out in 2021, it is only a matter of time — hopefully later rather than sooner — before another pandemic hits. When that happens, these folks want to be in a place where they can talk a walk along the beach, and not holed up due to a lockdown order.”

And of course, it must be added that Florida’s great weather and lack of state tax certainly help make the Palm Beach a desirable place to live.

Another key reason why home sales are skyrocketing — for example, Palm Beach County single-family home luxury ($1 million and higher) transactions jumped nearly 83% year-over-year between Q3 2019 and Q3 2020 — has to do with foreign interest.

“Generally, about 20 percent of homes across the U.S. are purchased in cash,” commented Paul Kaulesar. “However, in the third quarter of 2020, cash sales represented nearly 38 percent of closed sales in Palm Beach. This is not a new trend, but a further illustration of this area’s status as the country’s number one market for foreign buyers, who often make all-cash home purchases.”

As for what the future holds for the en fuego Palm Beach real estate market, while nobody has a crystal ball, it’s safe to say that there is no bubble here to burst, and the market will keep going up and up throughout 2021 and beyond.

“Many people who move to Palm Beach and purchase luxury homes do so in order to be closer to their friends and family members, who made the trek to Florida in recent years,” commented Paul Kaulesar. “It is really about creating a lifestyle, and enjoying the unique perks and prestige of living in Palm Beach. There is no other place in the U.S. that is quite like it.”

The Bottom Line

In closing, Paul Kaulesar has two pieces of practical advice for buyers who have their hearts set on calling Palm Beach home in 2021: speed is of the essence and be as flexible as possible.

“It’s a seller’s market, and buyers who delay and dither are going to lose out,” commented Paul Kaulesar. “At the same time, buyers should be as flexible as possible. It’s unlikely that they’ll get everything on their wish list — such as a home automation system, a private beach, and so on — so they may need to settle for what’s available instead of what’s ideal. Besides, they can always add and upgrade in the future.”