This waterfront home sold at 15% below the listing price, but still broke the record for most expensive home sale in West Palm Beach.
Douglas Elliman
The recent $11.5 million sale of a six bedroom mansion at 2914 Washington Road broke the record for the most expensive single family home transaction in West Palm Beach by $6.5 million. But it took the seller almost a year and half to find a buyer. Moreover, the waterfront property sold at 15% below its initial preconstruction price of $13.5 million in 2017.
The amount of time the house was on the market and the price drop is a reflection of the luxury single family home market in Palm Beach County, where mansion buyers are taking longer to find the right deals. During a recent visit to Palm Beach, Liam Bailey, head of global research at London-based Knight Frank, said rising interest rates have contributed to a slower growth in prime property prices. “The beginning of the end of ultra-low interest rates … is beginning to put pressure on [residential property] prices in many markets,” Bailey said.
He added that wealthy individuals are taking longer to make home buying decisions because there is an oversupply of luxury properties. Bailey recently co-authored a report on the global prime real estate market.
“Whilst there might be more inventory to choose from, actually the appetite from wealthy individuals has been very strong,” Bailey said. “If they see an opportunity, if it feels like fair value in the market, the appetite is there.”
A Douglas Elliman 2019 Q1 Palm Beach report shows single family home sales have declined as the inventory has risen sharply. For instance, 19 luxury single family homes sold in the first quarter compared to 22 during the same period last year. And the number of active listings increased 15% to 180 compared to Q1 2018. The average sales price in the luxury market is $8 million, a 38% drop compared to the same quarter in 2018, according to the Douglas Elliman report. The average time on the market is 106 days and there is 34 months of supply of luxury properties, including condos.
Burt Minkoff, one of two real estate agents with Douglas Elliman who listed the Washington Road mansion, said buyers are also taking longer to make decisions because they prefer to see completed, furnished properties. “A lot of developers will put a house on the market before it is ready,” Minkoff said. “This home wasn’t furnished until October. That hampered the early efforts to sell it.”
Developed by The Aquantis Group and completed in September 2018, the brand new estate features six bedrooms, nine-and-half bathrooms, seven fireplaces, a two-story living room, a library, a wine vault, elevator, a custom granite motor court; and a two-car garage with attached carport. In addition, the backyard has a cabana, summer kitchen, infinity edge pool and spa, a separate guest house and a 100-foot-long deep-water dock that fronts the Intracoastal.
Minkoff, who also represented the buyer, said he convinced the developer to slash the listing price from $13.5 million to $12.9 million when Douglas Elliman took over the listing three months ago. “From there things moved fairly quickly,” he said. “And we were able to make a deal.”
Despite sales taking longer to complete, the West Palm Beach luxury home market remains strong, Minkoff said. He noted that the previous most expensive home in the city sold for $5 million in October. That record was broken only seven months later. “My partner just listed a house on the water for $10.5 million,” he said. “Two empty lots on the water sold for $3.9 million and $5 million.”