Red hot real estate markets have turned surprising profits for unintentional property flippers

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    asset management news magazine

    An aerial view of the Rockybrook Estate in Delray Beach, FloridaDouglas Elliman

    Ten days after closing the year’s most expensive mansion sale in Delray Beach, Florida for $19 million, luxury real estate broker Senada Adzem got an unexpected phone call.

    “The buyer called me to say they would be selling the home. Honestly, we were surprised,” Adzem said in an interview. She recounted how the buyer explained his plans had changed. He and his family could no longer move to Florida.

    “I’ve never been involved in a situation where the client invested such time and effort to purchase a dream home — only to have to turn around and sell it less than two weeks later,” Adzem said.

    The client relisted the home, known as “The Rockybrook Estate,” with an asking price of $23 million, which was $4 million more than he paid for it a few weeks earlier. Adzem said she expects the unintentional short-term flip will pay off.

    “We’re confident — given the red-hot luxury market in South Florida, and the dazzling, resort-style splendor of this property — that the seller has an excellent opportunity to turn a significant profit on this deal,” she said.

    The scenario isn’t an isolated case. It is playing out in several U.S. real estate markets as the rising value of stocks and other assets has helped boost the spending power of the wealthy. With many of these buyers looking to live in a limited number of markets, the availability of luxury properties can be scarce.

    The great room at the Rockybrook Estate in Delray Beach, Florida.Douglas EllimanLow inventories

    Delray Beach is one good example. Inventory for multimillion-dollar luxury listings in the city on Florida’s southeast coast is at a 10-year low, and down 45% compared with 2020, Adzem said. In the first quarter, the average sale price for a luxury single-family home there is up more than 53.7% from the previous quarter, according to the Elliman Report.

    “The low inventory of megamansions, especially in a booming housing market like we have in South Florida, works in favor of the seller,” she said.

    On the same day this home at 14 Sandy Cove in