Palm Beach County’s luxury market faces a new test: Private schools are bursting at the seams, and it’s causing a backlog of residential sales.
Since the onset of the pandemic, the county’s top private schools have grappled with an unprecedented flood of applicants and booming enrollment, in step with the surge of high-end sales. Now, with classrooms at capacity, kids are getting waitlisted, and so are their parents’ home purchases.
Newfound flexibility with remote work, a lack of state income tax, and limited Covid restrictions were the early draws for families. Now, corporate relocations to the area have precipitated a second wave of migration.
Goldman Sachs, Elliott Management, and Virtu Financial, all headquartered in New York, are just a few of the firms opening offices in Palm Beach County. West Palm Beach has earned the moniker “Wall Street South,” a nod to the Business Development Board of Palm Beach County’s decade-long initiative to lure the financial sector out of the Northeast.
These moves have been a boon for the area’s residential market, bringing high-earning clientele to Palm Beach’s brokers. The new buyer base, largely from the North and accustomed to a robust system of elite private educational institutions, is not interested in Palm Beach County’s public schools, agents say.
“They see the ratings, and where they matriculate to college, and they’re just not that impressed,” said Vince Marotta, a broker with Illustrated Properties.
Private education is a non-negotiable for these buyers, brokers say, and years-long waitlists at schools like Oxbridge Academy, the Benjamin School, the Greene School, Rosarian Academy and Palm Beach Day Academy are holding up residential sales.
The schools know it, too.
“We know there’s a move [that is] kind of banking on schools,” said Amy Jablonksi, the Benjamin School’s director of enrollment management. “We just don’t have enough room.”
Supply and demand dilemma
Applications to the Benjamin School, a Pre-K-12 preparatory school in Palm Beach Gardens, are up 109 percent over five years ago, she said. In that time, the student body jumped from 1,051 kids to 1,285.
“Certainly Florida is still our bread and butter,” Jablonski said. But in terms of the new applicants, “our biggest representation probably wouldn’t surprise you –– it’s Connecticut, Massachusetts, New York, New Jersey,” she added.
“A decade ago when I was on the board, we were undersubscribed,” said Marotta, a former Benjamin School board member and parent.
Meanwhile, at Palm Beach Day Academy in Palm Beach, enrollment is up 45.2 percent and applications have more than doubled from pre-pandemic levels, according to Director of Admission Stephanie Filauro.
The county’s private schools are acutely feeling the pinch at the earliest entry points.
“Around Pre-K, kindergarten, first grade, that’s where the bottleneck is,” said Margit Brandt, a broker with Premier Estate Properties and a Palm Beach County private-school parent.
Matt Brannon, an alumnus and board member of the Benjamin School, said he also sees congestion between fifth and sixth grades, when students are transitioning into middle school.
From his spot on the board, Brannon said he’s seen families enroll one child, hoping a spot eventually opens for their other child. As a broker with Illustrated Properties in North Palm Beach, he’s seen high-net worth buyers in “holding patterns.”
Suspended sales
“I’ve had families who have not made the transition down,” Brannon said. “Until they can get into certain schools they’re not going to uproot their families.”
Waitlists are affecting sales for brokers across the county. Marotta has a luxury client looking to buy in northern Palm Beach County, but she won’t pull the trigger yet.
“She can’t get her daughter into Benjamin,” he said.
Brokers see the waitlisted deals as another pandemic phenomenon, one of the new quirks in a redefined market. But they’re not sweating it.
Limited inventory and sustained, steep demand over the past two years means pricing remains strong. The median sale price in Palm Beach jumped 83.9 percent in July, year-over-year, according to Redfin. For Palm Beach County overall, prices for single-family homes rose 20 percent in that period, and the number of sales fell 33.3 percent. Marotta said he closed $50 million in sales volume countywide in July alone.
Even with a cooling market on the horizon, brokers say price dips are unlikely.
Meanwhile, waitlists and a squeeze on housing stock have not been enough to deter families from making the move, brokers say. Rather, it’s a delay of the inevitable.
“They’re basically just waiting for the opportunity,” Brannon said.
The response
To navigate around waitlists and avoid holdups, brokers now urge all prospective buyers: Get on the waitlist as soon as possible.
“If you’re even thinking about moving here, put your name on the list,” Marotta said. “Just fill out the application, get it in immediately.”
“You just have to get ahead of it,” said Brandt, who advises buyers to be proactive so enrollment doesn’t become an obstacle once they put in an offer on a house.
Aside from applying early, Brandt said it’s important to “[work] with someone who knows how to get you in.”
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School administrators hold the keys, and facilitating introductions between them and relocating executives is crucial. Palm Beach County Business Development Board President Kelly Smallridge understands this intimately. That’s why her organization established a task force for working with private school headmasters.
When the board kicked off its Wall Street South initiative, its leaders understood that Palm Beach County’s private schools would be vital to convincing C-suite parents to take the plunge.
“[Schools] play a big role in whether or not we’re actually going to win the deal,” she said.
Smallridge said the group’s initial goal was to teach Palm Beach’s private schools how to court affluent families considering a move. The task force directed schools to provide private tours with headmasters, share relocation information on school websites, and offer video brochures on school curriculum, Smallridge said.
“It’s been a very mutually beneficial relationship,” she said. “They win, and we win.”
Now that the schools’ empty desks are filled, Smallridge said the conversation has shifted to the possibility of growth.
“The vast majority of schools would prefer not to expand,” she said.
And yet, they are. The Greene School, founded by billionaire Jeff Greene and his wife Mei Sze Chan, opened a high school this fall. Records show the Benjamin School bought 0.9 acres adjacent to one of its campuses for $1.7 million last September. Jablonski also said the school hired 40 new faculty and staff for the start of this school year to maintain its student-teacher ratio.
Palm Beach Day Academy received an $18 million donation from Tiger Global Management’s billionaire partner Scott Shleifer and his wife Elena Shleifer, Palm Beach Daily News reported.
While the existing schools are adding some capacity, brokers say the demand is so high that the only real solution is more schools. Much like students, new schools may well be coming from the Northeast.
“Out-of-state private schools are wanting to follow their customers,” Smallridge said, referring to early-stage expansion conversations with New York-based private schools.
Even with Northeast schools considering the move to Wall Street South, it will likely be years before the supply of private schools in Palm Beach County reaches equilibrium with demand. Until then, children and deals alike will sit on their respective waitlists.
Brokers get it.
“As a mother,” said Brandt, “I wouldn’t move anywhere, buy any house — without the school.”