The Nantucket and Palm Beach real estate markets attract the same type of seasonal clientele; summers in Nantucket and winters in South Florida is a very attractive lifestyle to many. These snowbirds are willing to pay the premium that is required to own property in both these markets. Interestingly, the premiums are vastly spread, with the median single-family home selling for $3.195M in Nantucket in 2023 and over $10M in Palm Beach. Both markets show the same trends, but the Palm Beach market’s metrics are more extreme. The $42M record sale on Nantucket this year doesn’t hold a candle to the $170M property sold in Palm Beach, which also set a record. Inventory levels are creeping up in both markets. However, they are still below pre-pandemic levels, so the off-market game, especially in Palm Beach, has practically become a market of its own. With the demand still high in both markets coupled with increasing inventory, pressure on prices is softening slightly, and prices are beginning to stabilize. Comparing the two markets, it’s safe to say that Nantucket looks like a deal compared to the Palm Beach market. Read on as I dive deeper into the comparison. My 2024 Spring update provides some interesting color on how both markets are trending this year.
Transaction #s and Dollar Volume
If we start with the $3.195M median single-family price in Nantucket as a point of reference; In Palm Beach, there were only 5 single-family home transactions in 2023 that closed for $5M or less with $3.295M for a 1,500 sq ft home being the lowest single-family home sale in 2023. If we dig deeper into the stats, comparing the transaction figures and dollar volume, it becomes evident that there is a mega-high end of the market in Palm Beach that doesn’t yet exist on Nantucket. Palm Beach only had 52 closed single-family residential sales in 2023, totaling $847M, with four of these sales selling north of $44M. Keep in mind that these figures do not include off-market sales or condo/townhouses. With Nantucket’s record residential sale coming in at $42M, it goes to show the Palm Beach market has a high-end sector that Nantucket has yet to see. If we include the 166 condo sales totaling $434M and the six townhouse sales totalling $54.5M plus over $52M in land sales and $15M in commercial sales, the Palm Beach market did approximately $1.81B in sales volume compared to Nantucket’s $1.15B. More to come on the impact of off-market deals in Palm Beach, which are not included in the figures above.
If we compare 2023 figures to 2022 figures in both markets, Palm Beach saw a larger percent decrease in both dollar volume and transaction numbers in single-family homes than Nantucket, but the market saw a significant increase in townhouse sales, up 144% from 2022. For publicly marketed single-family homes, dollar volume was down 35%, transaction numbers were down 38% in Palm Beach, while Nantucket saw a 26% and 23% decrease, respectively.
Inventory Levels & Off Market Activity
With inventory levels trending low in both markets, off-market activity is up. The usual pre-pandemic inventory levels for single-family homes in Palm Beach trended around 185, and at 2023 year’s end, the figure was 86, but this is way up from the summer 2023 level of 35. Nantucket’s single-family inventory figure at 2023 year’s end was 104 compared to just 73 from one year prior, but we are still below the 2019 year-end level of 243. Personally, I do not think either market will see the inventory levels we saw pre-2020; however, I do believe that inventory will continue to increase in both markets. There are some significant off-market sales that happen on Nantucket, primarily commercial transactions, but nothing like the off-market activity in Palm Beach. In 2023, there were 16 off-market sales totaling $616.21M, which means the average selling price for these 16 properties was $38.5M; that statistic is tough to grasp when compared to the Nantucket market. If we combine these sales with the publicly marketed sales noted above, the total true sales volume in Palm Beach was approximately $2.4B, with numbers solely representing residential coming in at $2.25B. Interestingly, both record sales in each market were off-market deals.
Median Figures & Home Values
The Palm Beach market is divided into four different areas based on location. Each location has unique attributes, and they vary significantly in price points. For this reason, combined with the omission of the $616.21M in off-market sales, I don’t think the aggregate median sales price of $10.175M for a single-family home paints an accurate picture. If we break down the four areas, you will see why. Of the four areas, the median sales price for a single-family home is $11.6M, $9.7M, and $25.7M, respectively, with no single-family home sales in the fourth area. Comparing these figures to Nantucket’s median single-family sale price of $3.195M confirms that the Palm Beach market is significantly more expensive than Nantucket. Palm Beach also has a condo and townhouse market, each playing a significant role in the real estate market. The median condo price was $1.552M, with the townhouse price coming in at $9.12M
If we compare the median home price year to year, it’s a good general indicator of property values. Comparing Nantucket’s 2023 medium home price of $3.195M to 2022’s price of $3.363M, property values decreased 5%, generally. If we look at Palm Beach’s figures of $10.175M in 2023 to $12.2M in 2022, that market is down 17%. The value appreciation we saw from 2020-2022 was not sustainable, so these decreases were to be expected, and it’s a healthy reset.
Market Trends
After my analysis of both markets, it is clear that the peaks and valleys of the Palm Beach market are more drastic than Nantucket, but the underlying trends are very similar. According to Palm Beach Sotheby’s Broker Todd Peter, “The Palm Beach market is set to have another great season in 2024. The market is stabilizing from the pandemic craze, yet the New Englanders continue to make the move down here. Inventory is continuing to increase, but we still have a ways to go to get back to pre-pandemic levels. The ultra-high-end of the market continues to thrive and with interest rates set to decline in 2024, coupled with the positive stock market figures, we foresee all other sectors of the market doing well.” Like Palm Beach, Nantucket has a ways to go to get to pre-pandemic inventory levels, but we’re moving in the right direction; we still have the buyers but finding the property is the challenge. The majority of buyers in both markets are looking for the same thing, turn-key properties, and they are willing to pay a premium for it. The buyers looking to do a project are not as prevalent, most likely due to the time required from start to finish. The mega high-end market that exists in Palm Beach doesn’t appear to be affected by the economic variables like the other sectors of the market, hence why the median sales price is staggering. Not having that sector in the Nantucket market makes the price point way more attractive to buyers looking to get into one of these markets. Both markets attract the same type of clientele, however, the cost of real estate is exceedingly more expensive in Palm Beach. I think both markets are settling into price stabilization and new inventory levels that are most likely going to be the new “normal” going forward.
Spring ‘24 Update
The 2024 season in Palm Beach was off to a slower than usual start thanks to a stretch of terrible weather in December and early January. Within the last month, however, there has been a late season push and activity is way up across the board, including a contract on 10 Tarpon Isle. First listed for $218M in 2023, and recently re-listed for $187.5M, this is the most expensive property listed in Palm Beach. There are rumored to be several $50M plus properties also under contract so we’ll have to wait and see where the final sales figures fall but it’s clear that price stabilization continues as sellers are willing to reduce prices to realistic levels to engage more diligent buyers.
As for inventory, there are approximately 95 properties for sale, which is a robust inventory number for this time of year. As the peak Palm Beach real estate season is coming to an end, the Nantucket season is ramping up and I foresee this upcoming season trending the same as we have seen in Palm Beach this winter — a strong market but with price stabilization continuing while inventory rises compared to recent years. Both markets have become efficient, it’s not a sellers market and it’s not a buyers market. The frenzy in both markets is over but there is still tremendous interest. Prices have stabilized but perceived values have reached new levels that are here to stay.