President-elect Donald Trump’s Palm Beach neighbors are selling homes on tiny lots at or far above the $18 million value a New York judge declared his sprawling Mar-a-Lago resort is worth in a civil fraud case that fined him nearly a half-billion dollars.
The market in Mr. Trump’s neighborhood has exploded since the Nov. 5 election, and the rising home prices have made all the more glaring a New York judge’s declaration that Mr. Trump’s 17-acre “lake to ocean” resort is worth a mere $18 million.
“It makes no sense. Even if they came in and said it was worth $500 million, it would make no sense. At $1 billion, people would still be scratching their heads,” said Adam McPherson, executive director of luxury sales for Douglas Elliman Real Estate in Palm Beach.
On Tuesday, New York Attorney General Letitia James announced she would not drop the civil case against Mr. Trump.
In February, Mr. Trump and his sons Don Jr. and Eric were found liable for fraud in a lawsuit brought by Ms. James and overseen by Manhattan Supreme Court Judge Arthur Engoron. The judge ruled that the Trumps inflated their net worth to secure optimal loan deals. Mr. Trump was ordered to pay $454 million plus interest.
Judge Engoron ruled that Mr. Trump overstated the value of Mar-a-Lago by 2,300%. He based his claim on Palm Beach County’s assessment of the resort’s value at $18 million to $27.6 million over 10 years. Mr. Trump had valued the property at $429 million to $1.5 billion.
Real estate experts have almost unanimously declared that the tax assessment does not accurately represent the value of Mar-a-Lago and that it’s not easy to price the unique property.
“I tell my clients that the tax assessment is not a real indicator of value,” said Dina Goldentayer, an expert in the luxury real estate market and executive director of sales for Douglas Elliman. “It’s an unsophisticated position. It can’t take into consideration certain things like view or positioning next to a main road. The tax assessor’s office would be the least reliable assessment, in my professional opinion, of evaluating homes.”
Mr. Trump’s election victory, some agents say, has energized the real estate market on the exclusive island, where neighbors with oceanfront homes have turned down offers as high as $250 million from Amazon founder Jeff Bezos.
A comparatively tiny home near Mar-a-Lago situated on two-fifths of an acre is under contract for $18 million — the same price Judge Engoron attached to Mr. Trump’s resort in the fraud case.
A 2-acre estate on nearby Tarpon Island, which does not have an ocean view, sold recently for $158 million.
Mr. Trump’s victory has increased the exclusivity and the importance of Palm Beach.
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The president-elect and his transition team are hunkered down at Mar-a-Lago to set up his administration. They have hosted VIPs and are holding glitzy galas.
The resort, Mr. Trump’s official residence, is expected to serve as the “Winter White House.”
“We’ve certainly seen a Trump bump postelection. There’s lots of consumer confidence. There’s lots of energy in the market,” Mr. McPherson said. “Several properties have gone pending, including ones that have been sitting somewhat dormant for months, years, in some cases. Properties that weren’t selling that were racking up hundreds of days on the market have all recently, in the last couple of weeks, gone into contract. So one, 100%, we have seen a massive shift in the market since the election.”
Another home neighboring Mar-a-Lago, situated on less than 1 acre and within the Secret Service’s barricaded security zone protecting the president, is under contract for nearly $28 million.
The island is grappling with paralyzing traffic, partly caused by the Secret Service roadblock protecting the resort when Mr. Trump stays there. The roadblock cut off a main artery running north to south and was erected to prevent cars, bicycles and pedestrians from passing by Mar-a-Lago.
The Palm Beach Town Council is considering legal action to prohibit or limit Mar-a-Lago’s big parties and events.
The guests are bused in and are not contributing to traffic issues. Still, council members cited “the wrong optics” associated with hundreds of people streaming into the resort while the rest of the town suffers from the closure of a main road to protect the president-elect.
“Those things are still being vetted,” a town official said at Tuesday’s council meeting. “If the town would consider legal options, it could take years to be heard by the courts, but that information is still being gathered.”
• Susan Ferrechio can be reached at sferrechio@washingtontimes.com.
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