The Pohrer Report Q3 2022

THE POHRER REPORT Q3 2022

Inside South Florida’s most exclusive real estate market.

Photographed home: 860 S Ocean Boulevard.

Listed by Gary Pohrer of Douglas Elliman Palm Beach.

Featured Property 860 S Ocean Boulevard Direct ocean and intracoastal estate with an approximately 150ft of sprawling beach frontage, guest house and tennis court. www.860soceanblvdmanalapan.com

CONTENTS 3 6 10 12 14 16 20 26

Let te r f ro m Gar y Po hrer Si n g l e Family Ho mes: A ll Neighborhoods Si n g l e Family Ho mes: No r th End Si n g l e Family Ho mes: In-Town Si n g l e Family Ho mes: Estate Se ction C on d os & Townho mes: A ll Neighborhoods Fe a t u re d Insights: Additio nal Data to Trac k All Things Re al Estate In C l os i n g

GARY POHRER | GARYPOHRER.COM | 3

Over the past 19 years, Gary Pohrer’s record-breaking sales and unwavering work ethic have earned him impressive accolades. Over the past two years Gary has risen to one of the top two agents in Douglas Elliman Agents Nationwide, making him one of the most successful agents in Palm Beach. Palm Beach may be Gary’s niche, but he continues to prove his top-tier experience with record sales throughout Palm Beach County. Including oceanfront residences from Manalapan to Jupiter Island, exclusive homes in top Golf Club communities like Old Palm Golf Club, and oceanfront properties in Seminole Landing. Gary Pohrer has proven his ranking as one of the top agents in the area with sales totaling over $1 Billion since 2020. ** Originally from St. Louis, Missouri, Gary relocated to John’s Island in Vero Beach, Florida, to pursue a career as a professional golfer. When he moved to Jupiter two years later, he found his passion shifting from golf to real estate. An avid player since the age of three, he enjoys getting to know his clients over a round of golf in the area.

In addition to golf, Gary, his wife Kelly, and their two children love biking on the lake trail, tennis at their local club, boating, and paddle boarding. They are also involved in fund-raising for Adopt-A- Family of the Palm Beaches, a charitable organization dedicated to helping homeless families.

Gary and his family have been residents of the Town of Palm Beach since 2008. Because of his personal and professional understanding of the Town, he is keenly aware of the small island’s intricacies, along with the highlights that differentiate one neighborhood from another. Residents often see him jogging through the area as he explores each street.

He finds “on the ground” insight to be the most effective research of properties. Multiple times in his career he has found an off-market property for a client while doing his daily routines in Palm Beach and delivered a contract to their door unsolicited.

Gary Pohrer

Sales Associate Executive Director of Luxury Sales M 561.262.0856 gary.pohrer@elliman.com garypohrer.com

Many new clients are unaware that Palm Beach is divided into three distinct areas: North End, Midtown, and Estate Section. Some boast larger lots, many enjoy access to the beach, and others include private cabanas. Gary’s approach when working with a client for the first time is to start with a private tour of the island as opposed to just viewing properties.

“I don’t only sell my clients a home, I sell them the Palm Beach lifestyle. I introduce them to their new neighbors, and the local clubs, and make them feel right at home from the start.”

$1B+

#1

#15

18

In Sales Since 2020*

Douglas Elliman Palm Beach Realtor for Sales Volume From 2017-2021**

Ranked Nationwide 2022 REALTrends + Tom Ferry The Thousand***

Years Selling Real Estate in Florida

GARY POHRER | GARYPOHRER.COM | 4

*PER DOUGLAS ELLIMAN INTERNAL RECORDS. **AS RECOGNIZED BY THE DOUGLAS ELLIMAN ELLIE AWARDS FROM 2017-2021. *** RANKED IN 2022 INDIVIDUAL BY SALES VOLUME 2022 REALTRENDS + TOM FERRY THE THOUSAND.

Letter From Gary 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 Pohrer Executive Director of Luxury Sales Douglas Elliman 340 Royal Poinciana Way M302 Palm Beach, FL 33480 O: 561.655.8600 M: 561.262.0856 gary.pohrer@elliman.com garypohrer.com

REPORT CONTRIBUTORS

Tammy Bernstein

Sales Associate

Beth Johnson

Elizabeth Vollman Tristan

Sales Associate Sales Associate Market Insights Advisor

SINGLE FAMILY HOMES ALL NEIGHBORHOODS

Q3 Summary: Single Family Homes: All Neighborhoods Transaction volume was down -66% year-over-year (YOY)* in Q3, largely driven by decline across both waterfront and non-waterfront properties.

Total sales value* was down -71% YOY, driven by a -45% decrease in non-waterfront sales and a -88% decrease in waterfront sales value.

Price per square foot (PPSF)* across home size* continued to grow YOY, and was up slightly from the same period last year: +10% PPSF: Home Size. Price per square foot lot size (PPSF: Lot Size) declined YOY for waterfront properties, driven mostly by a single waterfront sale. However, it increased YOY by +11% in the non-waterfront category.

% CHANGE

Q3 2022

Q3 2021

TRANSACTIONS

11

32

-66%

WATERFRONT

1

11

-91%

NON-WATERFRONT

10

21

-52%

TOTAL SALES VALUE

$178,686,623

$614,969,798

-71%

WATERFRONT

$44,880,000

$373,430,675

-88%

NON-WATERFRONT

$133,806,623

$241,539,123

-45%

AVERAGE SALES PRICE

$16,244,238

$19,217,806

-15%

WATERFRONT

$44,880,000

$33,948,243

32%

NON-WATERFRONT

$13,380,662

$11,501,863

16%

AVERAGE PPSF HOME

$3,638

$3,309

10%

WATERFRONT

$4,225

$4,029

5%

NON-WATERFRONT

$3,476

$2,593

34%

AVERAGE PPSF LOT

$738

$808

-9%

WATERFRONT

$567

$861

-34%

NON-WATERFRONT

$821

$737

11%

YEAR OVER YEAR

GARY POHRER | GARYPOHRER.COM | 7

Inventory: Active Listings Though still below the levels of 2017 to 2019, inventory of single family homes are slowly building up, +29% YOY from an average of 32 active listings in Q3 2021 to an average of 41 active listings in Q3 2022.

ACTIVE LISTINGS

194

190

200

172

150 137

130

122

100

105 58

50 39

31

40

Days On Market

JULY-22

APR-22

JAN-22

Single family homes stayed on the market for an average of 127 days during Q3 2022. This a YOY improvement of -16% compared to Q3 2021, when homes took an average of 153 days to sell.

571 5 71

500

400 357 322

300 215 193

200 145

138 3

100

108 120

73

JAN-22

OCT-21

JULY-21

APR-21

JAN-21

OCT-20

JULY-20

APR-20

JAN-20

OCT-19

JULY-19

APR-19

JAN-19

OCT-18

JULY-18

APR-18

JAN-18

OCT-17

JULY-17

APR-17

JAN-17

GARY POHRER | GARYPOHRER.COM | 8

JULY-22

95

0

APR-22

DAYS ON MARKET

OCT-21

127 DAYS 590

600

JULY-21

APR-21

JAN-21

OCT-20

JULY-20

APR-20

JAN-20

OCT-19

JULY-19

APR-19

JAN-19

OCT-18

JULY-18

APR-18

JAN-18

OCT-17

JULY-17

JAN-17

APR-17

0%

Sale to List Ratio* In Q3 2022, single family homes sold on average -15% below the asking price. This was a large jump down compared to the 90% to 95% sale to list ratio that had been consistent over the last several quarters.

105

105

100

SALE TO LIST RATIO

98

95

96

93

90

91 86

87

85

80

79 78 76

75

SEP-22

JUN-22

MAR-22

DEC-21

SEP-21

JUN-21

MAR-21

DEC-20

SEP-20

JUN-20

MAR-20

DEC-19

SEP-19

JUN-19

MAR-19

DEC-18

SEP-18

JUN-18

MAR-18

DEC-17

SEP-17

JUN-17

MAR-17

70

FOOTER: Glossary Year-over-year (YOY): A method of evaluating two or more measured events, comparing the results of one period with those of a comparable period on an annualized basis.

Total sales value: The sum of all sales during a period of time.

Price per square foot (PPSF): A calculation of the value of each square foot of area of a house, condo or any building. It is calculated by dividing the price by the square footage.

PPSF: Home Size: Home size is based on the current under air square footage.

PPSF: Lot Size: This is based on the PPSF of the total lot.

Sale to List Ratio: The ratio of the final sale price of a home to its list, or asking, price expressed as a percentage.

If the sale to list ratio is above 100%, the home sold for more than the list price. If it’s less than 100%, the home sold for less than the list price.

GARY POHRER | GARYPOHRER.COM | 9

NORTH END SINGLE FAMILY HOMES Palm Beach’s North End, located north of Wells Road, is celebrated for quiet seclusion. Thanks to zoning laws that prohibit condos and commercial properties in this area, many residents enjoy private beachfront views.

Q3 Summary: Single Family Homes: North End Transaction volume was down -58% YOY for the third quarter of 2022. This was the first quarter in the last 14 quarters that did not see a waterfront sale on the North End. Total sales value was down -64%, as there were no waterfront transactions. Total sales value was up +5% YOY on non-waterfront properties.

PPSF: Home was up +62% in Q3 YOY. Additionally, PPSF: lot increased quarter-over-quarter (QOQ)* +53%. % CHANGE

Q3 2022

Q3 2021

TRANSACTIONS

5

12

-58%

WATERFRONT

0

3

-100%

NON-WATERFRONT

5

9

-44%

TOTAL SALES VALUE

$72,349,750

$201,225,798

-64%

-

$132,510,675

-100%

NON-WATERFRONT

$72,349,750

$68,715,123

5%

AVERAGE SALES PRICE

$14,469,950

$16,768,817

-14%

-

$44,170,225

-

$14,469,950

$7,635,014

90%

$3,632

$3,416

6%

-

$4,680

-

NON-WATERFRONT

$3,632

$2,246

62%

AVERAGE PPSF LOT

$873

$898

-3%

-

$1,282

-

$873

$569

53%

WATERFRONT

WATERFRONT NON-WATERFRONT AVERAGE PPSF HOME WATERFRONT

WATERFRONT NON-WATERFRONT

YEAR OVER YEAR

Most Recent North End Sales SALE PRICE

ADDRESS

WATERFRONT?

SF HOME SIZE

PPSF ($)

SF LOT SIZE

PPSF ($)

6,365

$2,549

22,939

$707

APPROX.

HOME SIZE

APPROX.

LOT SIZE

$16,225,000

301 Polmer Park

$16,000,000

261 Nightingale Trail

4,673

$3,424

12,650

$1,265

$14,349,750

152 Dolphin Road

3,846

$3,731

11,025

$1,302

$9,400,000

170 Seagate Road

2,675

$3,514

11,365

$827

$8,375,000

171 El Pueblo Way

2,632

$3,545

9,962

$841

$8,000,000

301 Polmer Park

Land

Land

14,945

$535

FOOTER: Glossary Quarter-over-quarter (QOQ): The measure of an investment or a company’s growth from one quarter to the next.

GARY POHRER | GARYPOHRER.COM | 11

\

IN-TOWN SINGLE FAMILY HOMES Nestled between Worth Avenue and Wells Road lies the energetic center of Palm Beach Island, In-Town. Packed with shops, secluded beaches, and five-star restaurants, this hub of culture and leisure lures residents with a flair for cosmopolitan life.

Q3 Summary: Single Family Homes: In-Town In-Town transaction volume was down -56% YOY in Q3 2022, the fifth consecutive quarter that saw a decline in transaction volume.

Total sales value was also down -64% YOY at $38M in Q3 2022, compared to $105M in Q3 2021.

In-Town PPSF: Home was up +26% YOY, and PPSF: Lot was up +23%. The area rebounded this quarter QOQ, and we saw a slight uptick of +4% PPSF since Q2 2022. The downward trend we saw for In-Town in Q2 did not hold.

Q3 2022 TRANSACTIONS

% CHANGE

Q3 2021

YEAR OVER YEAR

4

9

-56%

TOTAL SALES VALUE

$38,171,300

$104,851,000

-64%

AVERAGE SALES PRICE

$9,542,825

$11,650,111

-18%

AVERAGE PPSF HOME

$3,223

$2,560

26%

AVERAGE PPSF LOT

$1,040

$849

23%

62

Most Recent In-Town Sales SALE PRICE $16,000,000

ADDRESS

WATERFRONT?

130 Brazilian Avenue

SF HOME SIZE APPROX.

4,955

PPSF ($)

SF LOT SIZE

PPSF ($)

$3,229

12,841

$1,246

HOME SIZE

APPROX.

LOT SIZE

$9,271,300

135 Chilean Avenue

2,611

$3,550

7,100

$1,306

$7,300,000

153 Australian Avenue

2,504

$2,915

10,502

$695

$5,600,000

422 Australian Avenue

1,772

$3,160

6,251

$896

NOTE: Reporting in this section does not break out waterfront versus non-waterfront properties, as there are limited waterfront sales in this area. In most years, zero waterfront homes sold.

FOOTER: Glossary Quarter-over-quarter (QOQ) The measure of an investment or a company’s growth from one quarter to the next.

GARY POHRER | GARYPOHRER.COM | 13

ESTATE SECTION SINGLE FAMILY HOMES The Estate Section comprises all residences south of Worth Avenue to Sloans Curve.

It is renowned for its opulent residencies and exclusive social clubs including The Everglades Club, Bath and Tennis Club, and Mar-a-Lago.

Q3 Summary: Single Family Homes: Estate Section Activity in the Estate Section continued to trend downwards significantly, YOY. In Q3 of 2022, transaction volume was down -82% and total sales value was down -78%. This is the third consecutive quarter we saw YOY decline in total sales value.

Q3 saw a weakening PPSF in the Estate section. That being said, we don’t think it’s indicative of a real trend as it only reflects a total of two sales. PPSF: Home was down -5% and PPSF: Lot was down -21% respectively, YOY. PPSF: Home for waterfront sales was up +13% YOY, thus the overall decline was really driven by a single non-waterfront home.

% CHANGE

Q3 2022

Q3 2021

TRANSACTIONS

2

11

-82%

WATERFRONT

1

8

-88%

NON-WATERFRONT

1

3

-67%

TOTAL SALES VALUE

$68,165,573

$308,893,000

-78%

WATERFRONT

$44,880,000

$240,920,000

-81%

NON-WATERFRONT

$23,285,573

$67,973,000

-66%

AVERAGE SALES PRICE

$34,082,787

$28,081,182

21%

WATERFRONT

$44,880,000

$30,115,000

49%

NON-WATERFRONT

$23,285,573

$22,657,667

3%

AVERAGE PPSF HOME

$3,426

$3,593

-5%

WATERFRONT

$4,225

$3,743

13%

NON-WATERFRONT

$2,512

$3,146

-20%

AVERAGE PPSF LOT

$591

$747

-21%

WATERFRONT

$567

$729

-22%

NON-WATERFRONT

$642

$816

-21%

YEAR OVER YEAR

Most Recent Estate Section Sales SALE PRICE

ADDRESS

WATERFRONT?

$44,880,000

2315 S Ocean Boulevard

Yes

$23,285,573

125 Via Del Lago

SF HOME SIZE APPROX.

PPSF ($) HOME SIZE

SF LOT SIZE APPROX.

PPSF ($) LOT SIZE

10,663

$4,224

79,140

$567

9,271

$2,511

36,246

$642

GARY POHRER | GARYPOHRER.COM | 15

CONDOS & TOWN HOMES ALL NEIGHBORHOODS Whether you seek a large building with resort-style amenities or the boutique elegance of a small, full-service site, Palm Beach Island offers an expansive range of options just steps from shorelines, shops, restaurants and more. Palm Beach townhomes are ideal for those who seek the convenience of a condo but crave the spaciousness of a house.

Q3 Summary: Condominiums and Townhomes Transaction volume in Q3 was down -43% YOY, due to a -50% decline in In-Town transactions and a -41% decline in South End transactions.

Total sales value was down -12% YOY. As with single family homes, PPSF for In-Town condos and townhomes continued to rise with +63% YOY growth, coming in at $2,308 PPSF. This was a -6% decline from Q2 2022, which saw a PPSF of $2,445. % CHANGE

Q3 2022

Q3 2021

TRANSACTIONS

86

152

-43%

IN-TOWN

18

36

-50%

SOUTH END

68

116

-41%

TOTAL SALES VALUE

$115,475,023

$131,109,007

-12%

IN-TOWN

$52,256,000

$58,022,060

-10%

SOUTH END

$63,219,023

$73,086,947

-14%

AVERAGE SALES PRICE

$1,342,733

$862,559

56%

IN-TOWN

$2,903,111

$1,611,724

80%

SOUTH END

$929,692

$630,060

48%

$961

$632

52%

$2,308

$1,415

63%

$649

$439

48%

AVERAGE PPSF HOME IN-TOWN SOUTH END

YEAR OVER YEAR

Inventory: Active Listings In Q3 2022, inventory was up +11% YOY. The same period in 2021 averaged 66 active listings per month, whereas Q3 2022 averaged 73 active listings per month.

400 333

332

323

300

276 250

250 250

236

238

200

199

150

146

100

74

75

80

53

JULY-22

APR-22

JAN-22

OCT-21

JULY-21

JAN-21

OCT-20

JULY-20

APR-20

JAN-20

OCT-19

JULY-19

APR-19

JAN-19

OCT-18

JULY-18

APR-18

JAN-18

OCT-17

JULY-17

APR-17

APR-21

64

50 JAN-17

ACTIVE LISTINGS

350 339

GARY POHRER | GARYPOHRER.COM | 17

Days on Market The number of days on market continued to decline in Q3 2022, reaching an average of 114 days. This was a -27% decrease from the same period last year, when properties stayed on the market for an average of 156 days. This was a slight uptick from Q2 2022, when properties averaged 107 days on market.

114 DAYS 400 365

305

325

300

300

209

204

200

219

254 201

150 173

150

176

175 147

142

100

115

148 91

Sale to List Ratio

94%

84

80 JAN-22

OCT-21

APR-21

JAN-21

OCT-20

JULY-20

APR-20

JAN-20

OCT-19

JULY-19

APR-19

JAN-19

OCT-18

JULY-18

APR-18

JAN-18

OCT-17

JULY-17

APR-17

50

*

The sale to list ratio for condos and townhomes hovered right around 94% for Q3 2022.

This has been consistent the past few quarters

100

SALE TO LIST RATIO

185

151

204

JULY-22

232

245

229

228

APR-22

250

JULY-21

DAYS ON MARKET

350

93

95 90 89

90

94

91

90

93

87

85

87

85

84

83

80

97 96

93

90

88

98

97

96

92

88

83

75

GARY POHRER | GARYPOHRER.COM | 18

JULY-22

APR-22

JAN-22

OCT-21

JULY-21

APR-21

JAN-21

OCT-20

JULY-20

APR-20

JAN-20

OCT-19

JULY-19

APR-19

JAN-19

OCT-18

JULY-18

APR-18

JAN-18

OCT-17

JULY-17

APR-17

70

Most Recent Condo & Townhome Sales ADDRESS

SF UNIT SIZE

$15,000,000

100 Royal Palm Way, PH 1

2,870

$5,226

$3,895,000

400 S Ocean Boulevard, 4190

1,716

$2,270

$3,500,000

100 Sunrise Avenue, 424

1,623

$2,157

$3,200,000

44 Cocoanut Row, 308A

1,497

$2,138

$3,150,000

100 Sunrise Avenue, 605

1,673

$1,883

$3,000,000

227 Australian Avenue, 0051

1,287

$2,331

$2,895,000

130 Sunrise Avenue, 6100

1,673

$1,730

$2,825,000

130 Sunrise Avenue, 2150

1,673

$1,689

$2,536,000

225 Everglade Avenue, 0020

1,218

$2,082

$2,500,000

240 S Country Road, 0160

968

$2,583

$2,450,000

455 Australian Avenue, 2B

1,188

$2,062

$1,875,000

325 S Lake Drive, 6

738

$2,541

$1,650,000

44 Cocoanut Row, 207A

900

$1,833

$1,500,000

220 Atlantic Avenue, 0040

646

$2,322

SALE PRICE

APPROX.

PPSF ($) UNIT SIZE

$650,000

455 Worth Avenue, 301

949

$685

$620,000

235 Sunrise Avenue, 1013

557

$1,113

$550,000

235 Sunrise Avenue, MZ B

1,081

$509

$460,000

235 Sunrise Avenue, 2224

389

$1,183

GARY POHRER | GARYPOHRER.COM | 19

FEATURED INSIGHTS HOMES ADDITIONAL DATA TO TRACK ALL THINGS REAL ESTATE The following is an analysis of supplemental data we evaluate at to keep a pulse on all aspects of the real estate market.

Average 30-Year Fixed Mortgage Rate

INTEREST RATE (%)

The average 30-year fixed mortgage rate increased in Q3 over Q2 as the Fed continued to raise interest rates. The most recent 30-year fixed mortgage rate sits right at 7%.

20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00

02 2 /2 06

01 9 06

/2

01 6 /2 06

06

/2

01 3

01 0 /2

/2 06

06

00 7

00 4 /2 06

00 1 /2 06

8 99 06

/1

99 5 /1

2 99 /1 06

06

9 98 /1 06

98 /1 06

/1

98

6

3

0 06

7

98 /1 06

97 /1 06

97 4 /1 06

06

/1

97

1

0.00

Q3 10-Year Transaction Volume Trend Transaction volume has been trending down YOY for the last several quarters, and became especially dramatic in Q3 of 2022 when we saw a dip of -66% from the previous year. For the first time transaction volume this quarter has gone below what we typically would expect in a third quarter, this quarter averaged 11 transactions, whereas in the decade preceding Covid, a typical Q3 averaged ~30 transactions.

The Palm Beach market is in a very unique position where it is still a great time to sell because the continued increase in PPSF (+22% in Q3 2022) reflects high demand.

60 50

47

40

39 9 33

32

30 25

25

21

20

18 11

10

2022

2021

2020

2019

2018

2017

2016

2015

2014

0 2013

10-YEAR TRANSACTION VOLUME TREND

53

Source: https://fred.stlouisfed.org/series/MORTGAGE30US GARY POHRER | GARYPOHRER.COM | 21

Share of Listings with a Price Cut The share of listings with a price cut refers to the number of unique properties with a list price at the end of the month that’s less than the list price at the beginning of the month, divided by the number of unique properties with an active listing at some point during the month.

100 DAYS

Share of listings with a price cut continued to increase with each passing month in Q3. South Florida share of listings with a price cut hit 23% in October, and the national rate sat right at 28%. Both are record highs.

20%

15%

10%

5%

860 S Ocean Boulevard | Manalapan | $45,000,000 | 860soceanblvdmanalapan.com

Source: Zillow Data Center.

GARY POHRER | GARYPOHRER.COM | 22

2 02

2

2

09 /2

02

02

07 /2

/2

02 2

US

05

2

/2 03

1

1

02

01

/2

02

02

07 /2

/2

1

02 1

05

/2

0

02

03

/2

02

01

0 02

07 /2

/2

02 0

05

03

/2

02

0

9

/2

01

01

01 9

07 /2

/2

01 9

05

9 01

03

/2

8 01

/2 01

01 8

07 /2

/2

01 8 /2

03

01

03

01

8

0%

/2

% OF LISTINGS WITH A PRICE DECREASE

25%

South Florida

United States New Home Sales A sale of a new house occurs with the signing of a sales contract or the acceptance of a deposit. The house can be in any stage of construction: not yet started, under construction, or already completed. New home sales account for about 10 percent of the U.S. housing market.

New home sales in the United States fell -10.9% to a seasonally adjusted annualized rate of 603K in September of 2022.

Housing demand in the U.S. has fallen sharply as the Federal Reserve aggressively raises interest rates to combat the surge in inflation. Sales fell in the South (-20.2% to 356K) and the West (-0.7% to 135K) but rose in the Northeast (+56% to 39K) and the Midwest (+4.3% to 73K).

1100

900 800 700 600

2022

2021

2020

2019

500 2018

NEW HOME SALES

1000

Virtually Rendered

201 Sunset Road | West Palm Beach | $11,000,000 | www.201sunsetroad.com

Source: US Census Data.

GARY POHRER | GARYPOHRER.COM | 23

United States New Construction Spending Construction spending refers to monthly estimates of the total dollar value of construction work done on new structures or improvements to existing structures for private and public sectors in the United States.

Construction spending in the U.S. unexpectedly increased +0.2% month-over-month in September of 2022, rebounding from a downwardly revised 0.6% fall in August and beating market forecasts of a -0.5% drop. Spending on private construction went up +0.4%, led by a +1% surge in investment in nonresidential structures, namely for manufacturing (+7.6%) and office (+0.1%) sites. Investment in residential construction was unchanged, with spending on single-family projects dropping -2.6% while outlays on multi-family housing projects increased +0.3%.

US CONSTRUCTION SPENDING +/-

3

2.7

2.5 2 1.5

1.5

1.3 1

1

0.9

0.7

0.7

0.8 0.6

.5

0.2

0 -.5

-0.6

254 N County Road | Palm Beach | $7,950,000 | 254ncountyroad.com

Source: US Census Data.

GARY POHRER | GARYPOHRER.COM | 24

SEP 2022

AUG 2022

JUL 2022

JUN 2022

MAY 2022

APR 2022

MAR 2022

FEB 2022

JAN 2022

DEC 2021

NOV 2021

-1

Housing Starts Housing starts refer to the number of new residential construction projects that begin during any particular month.

Estimates of housing starts include units in structures being totally rebuilt on an existing foundation.

Housing starts in the U.S. declined -4.2% month-over-month to a seasonally adjusted annualized rate of 1.425M in October of 2022. Single-family housing starts dropped -6.1% to a rate of 855K while the rate for units in buildings with five units or more decreased -0.5% to 556K. Starts were down in the Northeast (-34.7% to 96K), the Midwest (-11.1% to 185K); and the West (-10.6% to 336K) while starts went up in the South (+6.7% to 808K). Compared to October 2021, housing starts fell -8.8%. The U.S. housing market has been hit by soaring materials costs and rising mortgage rates, which recently reached their highest level since 2001.

2000

1600 1400 1200 1000

2022

2020

2018

2016

800 2014

US NEW HOME STATS

1800

209 List Road | Palm Beach | $6,950,000 | www.209listroad.com

Source: US Census Data.

GARYPOHRER POHRER||GARYPOHRER.COM GARYPOHRER.COM| |25 25 GARY

In Closing We appreciate you taking the time to read our report, and hope you found our insights on the Palm Beach Island market interesting.

The biggest takeaway for me this quarter is that PPSF continues to grow YOY, and is inching up QOQ. This shows that buyers still see the value of owning real estate on Palm Beach Island even amid the uncertainty around the global economy. Additionally, transaction volume is lower than it’s ever been due to limited supply — therefore, it continues to be a sellers market right now on Palm Beach. If you are considering selling your property, don’t hesitate to reach out as I’d welcome the opportunity to help you achieve your real estate goals.

Thank you again for reading our report. If you have any feedback for us, we’d love to have it, as we are always looking for new ways to break down the data in more interesting or accessible ways.

Warmest wishes,

Gary Pohrer Executive Director of Luxury Sales Douglas Elliman 340 Royal Poinciana Way M302 Palm Beach, FL 33480 O: 561.655.8600 M: 561.262.0856 gary.pohrer@elliman.com garypohrer.com

Source: Above data is pulled from Palm Beach MLS, The Beaches MLS and the Palm Beach Property Appraisers (PAPA). Specifically, we are only looking at transactions located in the 33480 zip code.

340 ROYAL POINCIANA WAY, M302, PALM BEACH, FL 33480. 561.655.8600 © 2022 DOUGLAS ELLIMAN REAL ESTATE. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. WHILE, THIS INFORMATION IS BELIEVED TO BE CORRECT, IT IS REPRESENTED SUBJECT TO ERRORS, OMISSIONS, CHANGES OR WITHDRAWAL WITHOUT NOTICE. ALL PROPERTY INFORMATION, INCLUDING, BUT NOT LIMITED TO SQUARE FOOTAGE, ROOM COUNT, NUMBER OF BEDROOMS AND THE SCHOOL DISTRICT IN PROPERTY LISTINGS SHOULD BE VERIFIED BY YOUR OWN ATTORNEY, ARCHITECT OR ZONING EXPERT. EQUAL HOUSING OPPORTUNITY.

GARY POHRER | GARYPOHRER.COM | 26