realtor diaries

There Are Barely Any Houses Left in Palm Beach

Photo: BusC Photography

In the past year, the real-estate market has — well, gone berserk. Houses are going for millions over asking in Boise and Albuquerque. Buyers are offering to name their firstborn baby after sellers. In this new series, Realtor Diaries, we talk to the people at the center of it all — about the 2 a.m. emails from clients; the 16-hour, six-day-a-week workdays; and the all-cash offers coming in from people who’ve never once seen the property they’re buying.

There are only roughly 2,500 homes total in Palm Beach, a small oceanfront 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 bevy of Kochs. Since the pandemic, and since several major hedge funds have relocated their offices to the town (not to mention those interested in flocking to the de facto home of our former president Donald Trump), there’s been a massive onslaught of buyers. Per property records, there have been 22 sales over $40 million in Palm Beach Country since March— and 35 over $30 million, a 177.8 percent spike in luxury sales compared with the same quarter last year. We talked to two longtime Palm Beach real-estate agents — Linda Olsson, who specializes in luxury homes (“$100 million and under properties,” she likes to joke), and Paulette Koch (no relation), who focuses on the “very high end.”

Linda R. Olsson, Linda R. Olsson, Inc.

The prices here are unprecedented. Everyone in New York, New Jersey, California is being taxed too much, and they’re done, they’ve had enough. They’re all beelineing here.

For instance, 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’s not even on the water. Seventeen million used to be a waterfront price. We’re selling another house just down the street from that one, but the current owners are staying there until May — it’s called a land leaseback. They’re selling it for $17 million, but the buyer said they’d do $20 if they’d move out now. The owner said, “The extra few million isn’t going to change my life. My wife wants to stay there so the answer is no.” I mean, a little apartment I just sold on the ocean — 1,600 square feet or so — went for $3.6 million. And, I mean, there’s just nothing for sale. A small apartment that just came up had 18 showings the first day and 10 offers. And who gets it? Typically, someone that pays over the asking price and who has no inspection.

And then there are the people buying without even seeing the properties. I just did three of those. We do it over the phone. I sold one to a person in London. A lady from Texas never came and she just said I’ll take it. A lot of people are worried that if they fly down they’re going to miss it.

I sold $300 million in the past six months. That’s a lot of real estate for one person to sell in six months. Other agents have sold dramatically more than that. Last year was good; this year’s better.

There are a lot of people who don’t want to sell, and it’s the same line. “I could sell my house right now, but where would I go?” Because in their opinion there’s nowhere to go. I mean, you can barely find a house in a golf-course community right now. That’s always been the case, though — a major player at Goldman Sachs wanted to offer $75 million to my client a few years ago, and the seller said, “Darling, what would I do with the money?” She didn’t take it.

That being said, a lot of people here aren’t even in their houses. Palm Beach has always been a land bank. It’s a great place to put your money. Interest rates are nothing. Mortgage rates are nothing.

There have been some strange exchanges lately, though. 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 U.S., fine.” We don’t launder money. I don’t accept just anyone’s money. That particular person is going to knock the house down and hire an architect.

I think Palm Beach is getting younger and younger. The schools have been totally booked up. So many people are applying to the private schools — in the past, that was not always the case. Those particular people are leaving high-tax states. They want to homestead here. They must enroll their children in school, register their car here. Everything.

Last year, during COVID, the Palm Beach Day School got 80 new applications from out of nowhere. It’s a small school, so that’s a lot of children. If they can’t get in there, there’s Benjamin. There is another school that Koch founded. The schools are quite good. Afterward, they go off to prep school.

A lot of the people coming are bankers. Hedge-fund people. Goldman people. Morgan Stanley. A lot of bankers. Sly Stallone bought here. Hilfiger owns here. Wellington, Bill Gates and their children, Bloomberg. A lot of billionaires; celebrities are less common.

Paulette Koch, Broker Associate, Corcoran

I’ve been in the real-estate business since 1987. And this is the fastest-paced market I’ve ever seen — so the inventory is quite slim and limited, consequently. We nicknamed it the roaring ’20s. You do feel very fortunate that we happen to be in the right place at the right time. Palm Beach has always been a very desirable location for many, many reasons. It’s a unique enclave. There are three bridges that allow you in, and once you get here it’s like, Oh, I’m not leaving this place. We have our own police department. We have our own town recreation center. We have our own town tennis court. We have our own golf course. You have security and privacy. And it’s filled with wonderful, philanthropic people who have had that sense of community and have worked hard all their lives and are happy to give back, so it’s very charitable. Practically everyone who chooses to live here comes from some other place 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 through it. You have the advantage of being in Florida, a tax haven; the weather; all the elements I just mentioned — and then there’s the pandemic.

Politics is one thing I never discuss with my clients. It’s one of the no-nos, but I don’t think people are coming down solely for that purpose, because of politics. But we never discuss it, and we’re open to everyone.

But back to inventory: It has always been slim. We have to pound the pavement daily, making phone calls. Trying to talk people into selling. There are 31 active properties available in all of Palm Beach right now. There are very few condos available for sale. Everybody’s aware that there’s a lack of product. I’ve sold quite a few properties just via FaceTime, and I’m proud to say that not one of my buyers has come in and been disappointed. They just rally. They say, “Paulette, this is perfect. Pay above full price. Just get me the property.” You have to act quick. Sometimes within a couple of hours. Certainly not more than 24.

As for what people really want? Well, direct oceanfront is the gold standard. You cannot get better than that. And the direct oceanfront affords you the most land overall, as a rule. So people want major estates, and that’s like the crème de la crème, and they’re gonna go for that. Those are, at this point in time, $35 million–plus is what you’re looking at. Fabulous beach and fabulous toes in the sand are what people desire the most. Stylistically, people like buying houses designed by those great architects from the ’20s and ’30s that really established Palm Beach. Mizners. Fatios, Wyeths. The old-world Mediterraneans and British Colonials.

But what we’ve been finding, and I think I coined the phrase, because now I hear it’s being used all over, is that people are buying placeholders. The placeholders are temporary places that people buy just to establish residency, because there’s a lack of rentals too. A big lack of rentals and especially decent rentals. So they buy a placeholder, get settled in Palm Beach, and then they will start shopping seriously — and they’ll be ready to act when a place comes along in 12 months.

We made [the placeholder] suggestion ages ago. Just get yourself a place; we’ll be able to resell it for you. Even if you become whole, even if you lose a little, you need to be pragmatic in how you explain things to your buyers, and the sellers are happy. They move onto their next purchase.

For instance, I had a couple who were looking to spend $10 million or $15 million, and I showed them everything that was available. They’re from Connecticut. The Northeast is big; we’re working with a lot of people from Chicago and California, though, too. There were some choices, but nothing really floated their boat, so they came to the conclusion … Well, what can I get for less while I wait for the house that I really love. So I found them a house, four and a half million, way too small for them but they have their toe in the door. It’s a good location but a small plot of land. I had another client — $20 million– or $30 million–dollar buyers. They want to be on a lake. But they realize that is just not realistic right now. So they’re willing to take a smaller place in the meantime.

But there are a lot of people right now I just can’t find a home for yet. You should see my list — it’s voluminous. I’m talking a minimum of 50 people, just waiting.

So I’m just trying to find more houses. That process is pretty simple: You get on the telephone. I’m calling homeowners — people who own properties — and just introducing myself. Fortunately I’m a little bit of a household name around here, to say the least. You say, “I’m not sure you’ve considered selling, but I have people interested.” A good part of the reactions are, “Gee, I’d like to sell. Tell me where I’m going.” And that becomes an issue. Other owners are very open to the fact that they’ll figure it out.

The other brokers and I are trying to help each other, quite frankly. They might not have the buyers who match what they know about. That’s where the relationships come in. What’s also interesting is that out of the 31 houses, over half of them are over $20 million.

But you should see the pace of this. My Saturday nights are 9 to 10 p.m., I’m on the phone: conference call, contractor, architect, buyer. I happen to be a widow, so it is kind of perfect for me at the end of the day, but I do have a life, by the way. And it’s like Help, this is no way to live. Everyone knows I’m 24/7, but this is a little crazy.

There Are Barely Any Houses Left in Palm Beach