When the Providencia ran aground off the Florida coast in 1878, the ship’s cargo of 20,000 coconuts, en route to the Spanish port of Cadiz, washed ashore and found a new home, quickly forming a rich grove of palms along the area’s then-sparsely populated beaches.
Today, the once-barren strip is called Palm Beach, one of the most desirable and exclusive winter playgrounds of the rich and often famous. Daytime temperatures between December and March are around 26C, providing the perfect backdrop for playing golf or sailing and sport fishing along Palm Beach’s azure waters.
The town of just 8,700 residents boasts some of the most expensive homes in the US. According to Zillow, the online property site, the median value for a single family home was $1.15m in February, well above the pre-crisis high of $1.03m in June 2006 — and almost five times today’s US median home value of $226,300.
One recent boost has come from US president Donald Trump, who owns Palm Beach’s Mar-a-Lago, the 128-room members’ only club. In the year that followed President Trump’s election in November 2016, property prices in the area jumped 24 per cent, according to Zillow — though they have stabilised since. Costs at the so-called “winter White House” have climbed too: the joining fee doubled to $200,000 shortly after Trump took office. In February 2017, the club hosted Japanese prime minister Shinzo Abe, with whom the president dined in the members’ area, to the astonishment of other diners.
But there are structural reasons for Palm Beach’s elevated prices. One of them, argues Jeff Tucker, a Zillow economist, is the lack of available space for new construction. With just eight square miles of territory, about half of which is water, the thin strip of land that sits between the much larger West Palm Beach and the Atlantic Ocean to the east has reached capacity. “There is nowhere more to look for vacant land,” he says.
Another is that it is zoned almost exclusively for single-family homes. “That creates a virtuous circle that attracts a lot of wealthy people,” Tucker says. “And wealthy people want to live next to other wealthy people.”
All of that makes for some very big and expensive properties. Douglas Elliman, the property company, is listing a seven-bedroom mansion on nearly 1.8 acres, including 250ft of beachfront, for $59.9m.
Elsewhere, Tina Fanjul Associates is listing a Spanish-style, four-bedroom home spread over 5,100 sq ft for $7.2m. Steve Hall, a senior broker with online group Compass, is listing a five-bedroom colonial-style home on one of the most desirable streets in Palm Beach for $4.45m, while on North Lake Way, Christie’s International Real Estate is listing a five-bedroom house designed in 1936 with a sale price of $11.85m.
Hall says that prices in the town are far above the surrounding areas. “A lot of people think that it’s a similar market to Miami, Jupiter [an island about 30 miles north] or Naples, but Palm Beach is almost twice the price as anywhere else,” he says. “Nothing compares to it.”
The average sales price of the 121 homes that sold in Palm Beach last year was $7.3m, says Hall, while the median price was $4.4m.
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That rules most people out of buying property there. But even if money were no object, Palm Beach is not for everyone. Buyers seeking a cosmopolitan, racially diverse environment might want to look elsewhere: more than 95 per cent of the population is white, according to the US Census Bureau. It is also overwhelmingly senior, with more than 60 per cent of residents aged 65 and over. Only 6.6 per cent of residents are aged 18 and under.
That has given Palm Beach a reputation as a rich person’s playground. Bill Fotino, who bought his home in 2014 for $3.55m, sees it differently. “It’s predominantly a community of success, which is very different,” he says. “It’s not just oldie-mouldy money here.”
Fotino loves Palm Beach for its obvious charms. “When you have the ocean next to you, you have the ability to go sailing, fishing and swimming,” he says. “The air quality is great, it is a safe and clean environment and your property values are wonderful.”
- Florida is one of the few US states that do not require residents to pay state income tax
- Annual property taxes in Palm Beach are about 2 per cent of the property’s assessed value
- Palm Beach is just over one hour’s drive north of Miami
What you can buy for . . .
$1m A two-bedroom 1,500 sq ft apartment in a building with pool, roof terrace and ocean views
$5m A five-bedroom house with pool
$10m A seven-bedroom house with enough land to keep gardeners busy from dawn till dusk
More homes at propertylistings.ft.com