The days of South Florida houses being built on speculation may be returning. As inventory continues to shrink, all-cash investors are putting their money into mansions and other speculative luxury properties. The absence of waterfront Palm Beach County homes has led to many off-market deals in which buyers come to homeowners with an offer. Radio personality Howard Stern and hedge-fund mogul Ken Griffin bought properties off the market for $52 million and $130 million, respectively.
“This is a window that won’t stay open forever and we will see more homes come to market, but right now there is more demand than supply in the very high-end, for homes over $25 million,” local developer-owner Pat Carney told Forbes.
Carney bought six waterfront residential properties between Fort Lauderdale and Palm Beach in 2010, at a time when banks refused to lending to speculative home developers. Luxury builders were okay with working for less money. Then, he developed four of them: One Manalapan home sold to motivational speaker Tony Robbins for $24.75 million, and another in Fort Lauderdale’s Harbor Beach development sold for $6 million.
“A couple years ago, many of the speculators began to step in and buy property,” according to Jade Mills of Coldwell Banker Previews International in California. “Many of those properties purchased are now being completed and in the luxury market, people want a current, exciting home that has all of the latest amenities.” [Forbes] — Mark Maurer