The Pohrer Report - 1H 2023

Clients, prospective clients, buyers, sellers, real estate enthusiasts, colleagues and friends, 

The 2023 season is nearing its end and it's been another lively one at that. Having experienced several quarters in a row of decreasing transaction volume, we wanted to make sure The Pohrer Report delivers plenty of fresh new information and insights. Thus, instead of publishing quarterly reports, we will now deliver twice a year, with our first report showcasing activity from January through June, and our year-end report covering Q3/Q4 activity and a comprehensive overview of the entire year.

As I dove into the key performance metrics from Q1 and Q2 of 2023, some trends emerged from both the data and the activity I've seen on the ground.

• Total Sales Value was overall still higher than pre-pandemic levels. Even though transactions are slowing and inventory is building, we still saw tremendous activity, with over $1.6B in sales value transacting in the first half of 2023 across single family homes, condos and townhomes.

• We started to feel the uncertainty people have around the larger macroeconomic climate. Inventory reached the highest levels we’ve seen in quite some time, and there was less urgency around making offers.

• When removing the 3 outlier $100M+ sales from our database we began to see some weakening across PPSF and average sale price year-over-year. Average sale price was down across both waterfront and non-waterfront homes and PPSF was flat on waterfront home sales and down across non-waterfront home sales.

• We continued to see pre-pandemic traffic patterns return to normal, with December to April being a very active time of daily showings.Activity slowed to one or two showings per week during the off season.

I hope you enjoy the read. As always, please don’t hesitate to reach out with any questions or if I can be of assistance to you in any way.

Gary

The Pohrer Report - Q4 2022

Clients, prospective clients, buyers, sellers, real estate enthusiasts, colleagues and friends, 

It’s crazy to believe that this is our sixth edition of The Pohrer Report. Thank you for taking the time to read our report each quarter and for sharing the thoughtful feedback which helps us make it better each time.  

Our Q4 2022 report is more dense than usual, as we have added in-depth, year-end summaries of annual KPIs across both the single family home and condo and townhome asset classes. I found it very interesting to zoom out from the quarterly performance to capture a high level view on how the Palm Beach market performed compared to other years over the last decade. The biggest take away for me was that YES, transactions and activity has slowed down in comparison to 2020 and 2021 BUT, when you compare the core KPIs to pre-2020 activities, it appears that 2022 was on par with (and in some cases stronger than) some of the typical years we’ve had in Palm Beach real estate.

As we close out the year, I would like to take a moment to express my gratitude for clients, prospective clients, and the incredible professionals I get to work with. I feel so fortunate to be a leader in this business, collaborating with outstanding colleagues and advising some of the most interesting and influential people with their Palm Beach real estate needs. 

I hope you enjoy the read and as always, please don’t hesitate to reach out with any questions or if I can be of assistance to you in 2023 and beyond.

Best regards, 

Gary

The Pohrer Report - Q3 2022

Clients, prospective clients, buyers, sellers, real estate enthusiasts, colleagues and friends, 

If you happened to find yourself on Palm Beach Island this summer, it felt very reminiscent of Palm Beach pre-2020. You could walk in to your favorite restaurant without a reservation, traffic was minimal (with the exception of construction vehicles coming and going), and most of the private clubs returned to their off-season schedules. 

Local real estate returned to pre-2020 velocity as well. I’m hesitant to use the adjective ‘slow,’ because it was by no means a slow summer with nearly $300M in real estate transactions during Q3. But what we’re seeing is a major slowdown in sheer volume of transactions. In Q3 2022, only 11 single family homes sold on the island — which is even slow for a Q3 in a pre-2020 climate, when there was an average 30 transactions (see chart on page 21). 

 This represents a very interesting market dynamic where inventory has dried up, yet demand is still extremely high. We continue to see price per square foot (PPSF) creep up on the limited inventory, but there simply are not a lot of quality homes on the market right now. I share this because if you are preparing to sell your home or have considered selling but are getting cold feet due to the uncertain economic climate, it is actually a VERY good time to sell — even given the macro headwinds.

I hope you enjoy the read and as always, please don’t hesitate to reach out with any questions.

Best regards, 

Gary

The Pohrer Report - Q2 2022

Clients, prospective clients, buyers, sellers, real estate enthusiasts, colleagues and friends, 

“Is the market softening?”

This is a question I get on a weekly basis from clients and prospective clients. If only I had a crystal ball and could predict real estate market cycles! Although I cannot provide a definitive answer to that question, I thought it would be helpful to share some of the data and reports that I look at as leading indicators to spot trends in global and local real estate markets.

In this quarter's report, as with all of our reports, I share actuals from the past quarter. But Q2 2022 actuals do not answer the broader market question that so many of you are eager to uncover. This is because Q2 is a lagging indicator of the market, reflecting transactions that closed in Q2 but actually moved to contract in Q4 2021, Q1 2022, and Q2 2022. We won’t know for certain how the Palm Beach market is being impacted by  macro trends such as rising interest rates, stock market upheaval, and other economic shifts until Q4 of this year or even Q1 of next year, because real estate players need time to react to how their pricing and their pocketbooks fit into the big picture. But I think you will find the data and trends I watch helpful in painting a picture of how real estate is being impacted by the rise in interest rates and Federal Reserve balance sheet tightening.

There is a lot to unpack in this quarter's report, and the most interesting thing I found is that although some leading indicators show softening in real estate globally, Florida — specifically Palm Beach — is holding its ground and impacted to a lesser extent.

I hope you enjoy the read and as always, please don’t hesitate to reach out with any questions.

Best regards, 

Gary

The Pohrer Report - Q1 2022

Clients, prospective clients, buyers, sellers, real estate enthusiasts, colleagues and friends, 

For the past two years, the entire world has felt the impact of the pandemic across all aspects of our personal and professional lives, and we will no doubt continue to adapt and learn for the foreseeable future.

The economy has seen significant shifts in response to COVID-19, and in turn, so has the the real estate market.  Our team decided to create a special issue of  The Pohrer Report, focusing on the changes that the pandemic has had on the Palm Beach market. In addition to  analyzing market behavior in Q1 2022, we break down real estate trends in the two years preceding the arrival of COVID-19, and the two years since, setting these eras against historical activity in the most valuable real estate market in the country.  

Over the past four years, we have seen unprecedented growth in our market. To give our readers a simplified way to decipher the data, we focus not only on sales figures, but how quickly they have changed. It can be challenging to explain to friends and clients how drastically our market has shifted, but I believe after reading this report you will understand the nuances of the Palm Beach real estate market more accurately.  We hope you enjoy the read and welcome your feedback to improve future reports.Best regards, 

Gary

The Pohrer Report - Q4 2021

Clients, prospective clients, buyers, sellers, real estate enthusiasts, colleagues and friends, 

Our team is delighted to bring you the second issue of The Pohrer Report. In this quarterly analysis, we break down current real estate trends and set them against historical activity in the most valuable real estate market in the country. 

Over the past two years, we have seen unprecedented growth on Palm Beach Island. To give you a simplified way to decipher the data, we focus not only on sales figures, but also on how they change when compared with different timeframes. It can be challenging to explain to friends and clients how drastically our market has changed, but I believe after reading this report you will understand the nuances of the Palm Beach real estate market more accurately. 

We hope you enjoy the read and welcome your feedback to improve future reports.

Best regards, 

Gary

The Pohrer Report - Q3 2021

Clients, prospective clients, buyers, sellers, real estate enthusiast, colleagues and friends,

We are delighted to welcome you to the first edition of The Pohrer Report, which details the trends and history of Palm Beach real estate. Within this report, we have broken down the market in a way that no one has done before, with various statistics showing the state of the market not only today, but over the past 40 years.

The purpose of this report is to inform the local community and new potential residents. Due to the current market conditions, many of the sales that are included in this report actually occurred without properties ever hitting the market. The data we have compiled has been taken from the Palm Beach Tax Collector, and therefore includes all sales, not just sales from the local MLS.

Drawing from data, our experience, and trends on the Island, we endeavor to predict what may come next in our local residential real estate market to help guide our clients in navigating these changing times.

We hope you enjoy the read and look forward to your feedback so we can improve on it in the future.

Best regards,

Gary

The Flow: Pohrer Monthly Market Update - September, 2021

Clients, perspective clients, buyers, sellers, real estate enthusiast, colleagues and friends,
This month, I’m trying something new. Over the last 12-24 months the headlines splashed across national and local media have been highlighting the VERY HOT Palm Beach real estate market (see chart below).
It’s very interesting times in Palm Beach real estate and I’d like to share both my analytical and anecdotal view of the market and what I’m seeing on the ground. On a monthly basis you’ll be receiving a memo similar to the one below where I will share with you my perspective on the market, what we’re seeing on the ground and also what we’re seeing in the data.
I hope you find it valuable and an insightful monthly read.
If your inbox is already overflowing (I get it) and you’d like to opt out feel free to unsubscribe below or shoot me a note to be removed.

Best Regards,
Gary

Real estate sales on Palm Beach Island are well above last year levels with four more months left in the year. As of August 2021 we have surpassed $3B in real estate transactions.

Market: Palm Beach Island
Asset Class: Single Family Homes, Condo & Townhomes
Executive Summary:

• We had another busy summer. Overall transaction volume ($) for single family homes is up 110% YoY from $108.6M in August 2020 to $228.3M in August 2021. It’s up 376% from August 2019 to August 2021. This continues to be driven by large price appreciation in the Palm Beach market and the continued increase in demand post pandemic.

• Price appreciation on the single family home asset class for the year just hit 52.9% when you compare 2020 to 2021. We have not seen this level of 1 year price appreciation in the Palm Beach market since the year 2000 where appreciation from 1999 to 2000 hit 43%. We’re also seeing price appreciation for the condo & townhome market coming in at ~10%, not quite as high as single family homes.

• Single family home inventory continues to remain at all time low levels for the last three months (~34 homes on market). This is down 69% YoY.

• Single family home days on market continue to be driven down further due to low inventory levels. August hit a record low for average days on the market of 102. That is down 69% YoY and down 37% compared to the previous month of July.

Observations on the ground:

• Since inventory is so tight, we are having to ask our existing property owner clients if they would consider selling. Most are asking where would I go? The others that consider selling are backing out when reality sets in that they have to move.

• People are starting to take a step back due to pricing unless it is move-in ready.

• Rentals are nearly impossible as hotels and rentals are basically all sold out. Surprisingly, this is causing some clients to consider renting their homes for a big price for a month or two.

What we're seeing in the data.

Palm Beach Island - Single Family Homes

Single Family Homes Summary: Transaction Volume (# of sales) 

• Summer transaction volume continues to be up significantly compared to pre-covid summer levels of 2019.

• August transaction volume increased 36% from July but is down 12% YoY from last August.

• Waterfront transaction volume decreased from 4 to 3 homes sold from July to August but is up from 0 to 3 homes sold compared to last year August sales.

• Non-Waterfront transaction volume is up 71% from July to August and is down 29% YoY.

All Homes on Palm Beach: Transaction Volume (#)

Single Family Homes Summary: Sales Volume ($)

• Sales volume ($) in August is up 110% YoY and is up 376% from August 2019 to August 2021.

• Sales volume is flat to down slightly (3%) from July 2021 to August 2021.

• Waterfront transactions for August makeup 37% of the sales volume, whereas non-waterfront transactions represent 63% of the total sales volume for August.

*2021 represents sales volume through August of 2021.

Price ($) / Square Foot - Palm Beach Single Family Homes  (by month)

• We’re continuing to see PPSF hold strong as inventory is low and demand remains strong.

• PPSF ($) is up August YoY from $1,318 to $3,148 (139%).

• Looking at this metric monthly can be bumpy due to 1 or 2 record breaking sales skewing the numbers, so it’s important to look at the annual rate which currently sits at 52.9% YoY PPSF appreciation.

• Non-waterfront PPSF ($) has been inching up steadily all year.

Single Family Homes Active Listings (#)

• Inventory continues to remain at all time low levels for the last three months (~34 homes on market). This is down 69% YoY.

Single Family Homes Days on Market (#)

• Days on market continue to be driven down further due to low inventory levels. August hit a record low for average days on the market of 102. That is down 69% YoY and down 37% compared to the previous month of July.

August Single Family Home Sales

Palm Beach Island - Condo & Townhomes

Condo & Townhomes Summary: Transaction Volume (# of sales) 

• Transaction Volume (#) is up 72% YoY for the month of August (43 in 2021 compared to 25 in 2020). The increase is largely driven by South End transactions which made up 31 of the 43 closed deals during the month of August.

• In 2021 the number of transactions has been steadily declining, coming off the April high, whereas last year the volume remained consistent and fairly flat month by month (bouncing around from 15-25 sales per month). This year the monthly volume ranges from 23-99 sales per month.

Condo & Townhomes Summary: Sales Volume ($)

• Total sales volume is up 105% YoY (50M in 2021, 24M in 2020) for the month of August.

• August Sales volume is split pretty evenly between in-town transactions ($27M) compared to south end transactions ($23M).

Condo & Townhomes Summary: Price Per Square Foot ($) 

• August was a record level of PPSF for the condo & townhome asset class for 2021. It hit $826 PPSF. This spike was largely driven by a record sale in 2 Breakers Row which sold for $4,550 PPSF.

• Again, looking at this metric for the entire year of 2021 it sits right around $737 PPSF which is up 10% compared to 2020.

• We’re not seeing as high of a CAGR for the condo & townhouse asset class as we’re seeing in the single family asset class (10%+ annual growth rate compared to 50%+ YoY annual growth rate for single family homes)

Condo & Townhomes Summary: Active Listings (#) 

• Inventory is down 74% YoY and has been hovering around ~65-70 active listings for the last few months.

Condo & Townhomes Summary: Days on Market (#) 

• Days on market are a bit more bumpy for the condo & townhouse market. We have not seen the same steady decline in days on the market for condo and townhomes. In general condos and townhomes will sit on market and not move as quickly as the single family homes.

• Days on market is down 38% YoY.

August Condo & Townhome Sales

The data represented in this monthly report is a roll up of a subset of the Palm Beach market and is intended to provide an overview of transaction activity for single family homes and condo’s and townhomes on Palm Beach Island. We recognize that there are nuances by location and based on specific property features even within Palm Beach Island. If you are interested in receiving a more detailed analysis on the value of your property or a property you’re considering please contact us below with your request and we can provide a more detailed comparable analysis report. We look forward to hearing from you.

Data Source: All data presented in this report is from PAPA, Palm Beach County Property Appraiser public database and/or The Beaches MLS.