Check out blog

Wealth scarcity of oceanfront property fuel mansion record prices

An oceanfront mansion sold this past week for $34 million, shattering Delray Beach’s previous record price by $15 million — and underscoring wealthy buyers’ willingness to pay top dollar for oceanfront property.
The Delray Beach deal, for the estate at 921 S. Ocean Blvd., was just the latest example of an eye-popping price for a prime property. The mansion boasts 155 feet of ocean frontage. The previous week, a mansion in Ocean Ridge sold for $13.6 million, eclipsing that town’s previous record of $9 million.
In Palm Beach, a buyer signed a contract Wednesday on a $59 million mansion. And this past summer, a $33 million deal in Manalapan and a $38 million sale on Jupiter Island set new high-water marks for oceanfront mansions in those enclaves.
What’s driving the deals? Real estate experts point to a combination of increasing wealth among the richest Americans and a scarcity of oceanfront property.
“If a buyer is looking for new construction on a big lot, the supply is actually very limited,” said Pascal Liguori of Premier Estate Properties, which listed the house at 921 S. Ocean.

Nicholas Malinosky, a Corcoran Group Real Estate agent who marketed both Ocean Ridge’s record breaker and Delray Beach’s previous record holder, agreed.
“The cost of land has gone up, and it’s extremely difficult to find land in Palm Beach County,” he said.
The buyer of the Delray Beach property is Richard A. Chaifetz, a Chicago-based investor and philanthropist. And Jupiter Island’s record-breaking mansion sold to John Malone, the cable billionaire who’s the nation’s largest landowner. Buyers in that echelon of wealth have reaped many of the benefits of economic growth in recent years.

“We know that the wealthy are doing pretty well right now,” said Brad O’Connor, chief economist for Florida Realtors.
Even so, there seems to be a ceiling on just how high mansion prices can go. Palm Beach County’s mansion record hasn’t budged since 2008, when Donald Trump sold the property at 515 N. County Road in Palm Beach to Russian billionaire Dmitry Rybovlev for $95 million.
A Manalapan estate priced at $195 million went on the market this past year, but has yet to find a buyer. And sellers of oceanfront estates in Palm Beach and Jupiter Island have slashed their prices in recent months.
In Palm Beach, the mansion at 1071 N. Ocean Blvd. is priced at $74.5 million after two price cuts of $5 million each.
On Jupiter Island, golf great Greg Norman’s estate is priced at $55 million. The property had been listed at $65 million but failed to sell.
Just up the beach from Norman’s mansion, pop star Celine Dion is asking $45.5 million for her oceanfront estate. That’s $27 million less than the original list price of $72.5 million when the mansion hit the market in 2013.
Unlike in the modest end of the real estate market, where a thee-bedroom house in the suburbs is easy to value, pricing palaces requires plenty of guesswork.
“When you get to the high end of the market, it’s a mix of art and science,” said Kevin Leonard, broker at Valore Group in Palm Beach.
Delray Beach
New record: $34 million (March 2016)
Previous record: $19 million (2015)

Ocean Ridge
New record: $13.6 million (February 2016)
Previous record: $9 million (2009)

New record: $33 million (September 2015)
Previous record: $25.5 million (2011)

By Jeff Ostrowski – Palm Beach Post Staff Writer – Posted: 1:02 p.m. Thursday, March 3, 2016