Starter homes in Palm Beach County are disappearing

In Palm Beach County, a significant shift in the real estate market has made starter homes almost extinct. Last year, 24% of homes sold in the county went for $1 million or more. This trend reflects a major increase in home prices since the early days of COVID-19, when buyers could find homes for around $1.1 million. Now, that price has skyrocketed to an average of $2.6 million. The demand for luxury homes has surged, especially in areas like Miami-Dade, where 23% of sales were also in the million-dollar range. Recent reports show that sales of million-dollar homes surged by 56% in Palm Beach in December, marking the highest increase since May 2021. Experts believe that a wave of wealthy buyers from other states is driving this demand. Cash purchases are dominating the market. In West Palm Beach, nearly 50% of home sales were made in cash last year. This trend is challenging for average buyers, especially with current high mortgage rates. In January 2025, the number of million-dollar sales in Miami-Dade rose by 3.1%, and the middle price for those homes reached $675,000, a staggering increase compared to ten years ago. Condo prices are also rising, with the middle price hitting $415,000. The luxury segment is performing exceptionally well, with the price for top-tier homes increasing significantly in 2024. For example, the average price of the top 5% of homes is now $3.3 million. While there are some cheaper condos available, the overall inventory for homes is down significantly. Florida is trying to address the affordable housing crisis by encouraging developers to build more affordable homes. However, the influx of wealthy buyers continues to limit options for the average American. Overall, South Florida has transformed into a market primarily suited for millionaires, leaving many potential homeowners struggling to find affordable options. As home equity gains rise sharply in the region, becoming a homeowner is becoming more challenging for everyday families.