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Florida is facing a Palm Beach mansion shortage. The average luxury home in the area is now selling for $11.7 million.

Business Insider Australia logo Business Insider Australia 16/07/2021 Dominick Reuter
a house with bushes in front of a building
  • Palm Beach, Florida had just 25 single-family homes for sale at the end of the second quarter.
  • The average price hit $11.7 million, up 38% over last year, according to CNBC.
  • At $1,500 per square foot, the cost is nearly on-par with Manhattan.
  • See more stories on Insider's business page.

In a year that has seen shortages of everything from semiconductors to chicken wings to rental cars, you can add beach-side mansions to the list.

Palm Beach in Florida has long been an expensive real-estate market, and now it's even more difficult to buy a home.

The price of a single-family home in the community reached $11.7 million last quarter, up 38% from the same period last year, CNBC reported. At $1,500 per square foot, Palm Beach properties are nearly as expensive as Manhattan ones.

"This is a whole reset of the market," Jonathan Miller, CEO of appraisal firm Miller Samuel, told CNBC. "We're now seeing $50 million transactions on almost a weekly basis. That's a big change. And it appears to be sustainable."

The huge increase in demand has left a record-low 25 properties still listed for sale at the end of the quarter - less than a one-month supply of inventory, according to Miller Samuel.

There were 871 single-family homes available in Palm Beach County at the end of January, according to a previous report from Miller Samuel and Douglas Elliman.

Christopher Leavitt, a broker with Douglas Elliman, told CNBC his job has gotten a lot more involved now that he has to persuade estate owners to sell and help them relocate to a different home.

What began as a seemingly temporary boom during the pandemic is now showing signs of staying power, with the development of office towers and amenities in nearby West Palm Beach encouraging New Yorkers to stick around.

Last year, the Palm Beach County clerk's office recorded more than 20 home sales for more than $20 million, doubling the number from 2019, according to the Palm Beach Daily News. One brand-new 21,000-square-foot mansion closed for roughly $120 million, shattering the record for most expensive home ever sold in the state.

The Trump family is even selling a Florida home near Mar a Lago for $49 million after buying it from the former president's sister for $18 million in 2018.

Palm Beach "hits every note that any high-net-worth buyer is looking for," Jay Phillip Parker, CEO of Douglas Elliman's Florida brokerage, told Insider's Taylor Borden. "The market is sizzling."

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