Here are the 5 hottest luxury real estate markets in South Florida

The supply of luxury homes and condos in South Florida isn’t merely tight. It’s worse than that.

“This isn’t just a decline in inventory,” said Jonathan Miller, CEO of Miller Samuel, an appraisal and consulting firm that tracks 14 real estate markets in the region for brokerage Douglas Elliman. “This is a collapse.” 

That’s not hyperbole, according to the numbers. In the first quarter of this year, South Florida inventory stood at a record low of 7,906 units, according to Miller’s data. That’s down from an average of 27,000 units from 2017 to 2019.

Miller doesn’t see the situation getting back to normal anytime soon, either. “Even if listing inventory doubled or even tripled, supply would be considered ‘low’ in most markets,” he said.

But sales are red hot.

Despite that low number of available properties, the first quarter saw more than $11.8 billion in total sales, topping the previous quarter by more than $1.9 billion. Some luxury markets achieved record highs, according to Miller.

The area’s top five luxury real estate markets delivered over 45% of all sales volume for the region, or almost $5.4 billion, according to data compiled by Miller for Douglas Elliman’s Elliman Report published earlier Wednesday.

Here’s a list of the top five luxury markets in South Florida by average sales price and a closer look at how headwinds like low inventory and rising mortgage rates might affect future sales.

1. Palm Beach

For the fourth consecutive quarter, Palm Beach secured the top spot in South Florida for highest average luxury home sale price. The town accounted for over half a billion in total sales volume, according to Miller’s analysis.

The average price of a luxury single-family home in the ritzy beach town topped $21 million. (Luxury is defined in the Elliman Report as the upper 10% of sales in a market.) The average price per square foot was $3,659, down 2.7% from the record price in the previous quarter, but the number of sales closed in Q1 totaled 15, up almost 67% over the fourth quarter, according to the report.

Palm Beach also had the biggest first-quarter sale in South Florida. The beachfront home at 854 S County Rd. closed at $53 million, according to public records. The 10,171-square-foot residence sits on 2 acres across the Intracoastal Waterway with 220 feet of water frontage, according to the listing. The price per square foot was a whopping $5,210.

Listing agent Gary Pohrer of Douglas Elliman told CNBC the size of the estate and water frontage set the property above the rest. When asked about his outlook on the market’s future, Pohrer told CNBC he remains “cautiously optimistic” with his biggest…