Palm Beach County led nation on a scale ranking income gain since start of pandemic

Palm Beach County’s riches hit a milestone in the early chaotic years of the pandemic with more affluence flowing in than any other county in the nation as wealth migrated in vast sums to the Sunshine State, according to a recent analysis of IRS data.

Based on tax return information from 2020-2021, the Washington D.C.-based Economic Information Group found Palm Beach County had a net gain in adjusted gross income of $7 billion, eclipsing runner-up Miami-Dade County’s $6.4 billion and third-place Collier County’s $4 billion.

Other counties ranking in the top 10 for net income gain included Clark County, Nevada, Lee and Sarasota counties in Florida, Arizona’s Maricopa County, the Texas counties of Travis and Denton, and Suffolk County, New York.

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Benjamin Glasner, an associate economist for the Economic Information Group and author of the income report released in October, said he wasn’t surprised so many Florida counties ranked high on the list, considering the state overall was the highest nationwide with a net gain of $39.2 billion.

This is the first time EIG looked at the IRS data in terms of wealth migration. Glasner said that traditionally, jobs and salaries stay within a state even if people relocate to another state, say, to take another job.

“That’s why this data is so interesting because we saw a lot of people changing their work location without changing their job,” Glasner said. “There has always been a large amount of movement out of Northeast cities, but it became huge during the pandemic.”

Realtor Steve Simpson began noticing signs of a wealth avalanche as early as the spring of 2020. Offers from would-be homebuyers started coming in where the sales price column was purposely left blank for the seller to fill in, he said.

All-cash deals far above asking price with no inspections or contingencies became the norm. The buying free-for-all has since settled, but Simpson said changes in the real estate market are permanent.

“Sleepy little West Palm Beach is a bygone era,” he said.

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The largest contributor to the gain in Florida’s net income was New York, which lost $9.8 billion to the Sunshine State, according to the EIG analysis. New York was also the largest feeder to Palm Beach County at $1.06 billion.

Texas trailed Florida with a net gain of $10 billion. Nevada had the third-highest net gain at $4.6 billion.

States that lost the most net income were California (-$29 billion), New York (-$24 billion) and Illinois (-10 billion).

While the influx of wealth may seem sudden, Business Development Board of Palm Beach County President and CEO Kelly Smallridge said it’s been building since at least 2006. That’s when the board began specifically marketing to affluent people who owned second homes in high-end communities, with the idea that they could relocate their companies here.

It was working, slowly, Smallridge said. Then the pandemic hit. In 2021 three companies in a row — Goldman Sachs, Millennium Management and Point 72 Asset Management — chose to open offices in West Palm Beach.

Smallridge said she knew then that the floodgates had opened.

“When the big reputable titans of the industry selected Palm Beach County, a lot of people in Manhattan said, 'I better take a look at why companies are moving there,' and they just came in and started buying homes left and right,” Smallridge said. “You’d think the catalyst would have been a tax incentive. I never thought a pandemic would bring people here to shelter and it would turn into a business opportunity.”

But it makes sense, she said.

Executives can fly out of Palm Beach International Airport in the morning to New York, Connecticut and Boston, and be home by dinner. Brightline shuttles them to Miami in style. New high-end office space — already built and under construction — caters to firms accustomed to the best, and whose employees no longer have to hire a driver or ride the subway into Manhattan.

There’s no snow and no personal income tax.

“The stars aligned with all of the assets a CEO would be looking for,” Smallridge said. “It’s been the biggest wave of Wall Street companies we have ever seen.”

The EIG study wasn’t the only one to note the swell of monied people to Palm Beach County following the COVID-19 outbreak.

Last year, West Palm Beach and Palm Beach were ranked second in the top 5 fastest growing cities in the country for the number of new millionaire residents by Henley & Partners, which studies wealth migration trends internationally. Austin, Texas, ranked in the top spot.

The two municipalities combined had a 90% increase in high-net-worth individuals — those who can invest $1 million or more — to 9,400 people from 2012 to 2022. That includes 64 so-called “centimillionaires,” who have $100 million or more of investible wealth, and six billionaires.

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“People realized during the pandemic that they don’t need to go to the office and they were like, 'Screw it, I’m making some changes,' ” said Jeff Lichtenstein, president of Palm Beach Gardens-based Echo Fine Properties.

But Lichtenstein said the pandemic-triggered onslaught was preceded by a handful of events in the past couple of decades that also raised Palm Beach County’s cachet. CityPlace, now The Square, in West Palm Beach opening in 2000 was one notable boon. Others included adding golf superstar Tiger Woods and basketball great Michael Jordan to its list of celebrity residents, he said.

And then there’s the weather.

Lichtenstein is traveling to Chicago when a winter storm is forecast to dump snow and send temperatures plummeting to as low as -5 degrees overnight.

“Waiting outside for an Uber with the wind chills? I could die,” he said. “Why would I want to live like that?”

Kimberly Miller is a veteran journalist for The Palm Beach Post, part of the USA Today Network of Florida. She covers real estate and how growth affects South Florida's environment. Subscribe to The Dirt for a weekly real estate roundup. If you have news tips, please send them to kmiller@pbpost.com. Help support our local journalism, subscribe today.

This article originally appeared on Palm Beach Post: Economic studies rank South Florida counties in top 5 for income gain