Want to know what top events are happening in Delray Beach in the month of December 2022? Listen to Noreen Payne’s video overview. Join us every month for highlights of top events in the area!
It was a bit shocking to see the change in numbers this month related to inventory and balance of market – we have “felt” the change in the market but still surprised to see the uptick on the higher end market tipping the scales at the million dollar price point and beyond to the verge of a buyer’s market.
It is official, at the higher end market we are back to prepandemic seasonality, time to contract/closing and the skills needed to sell a home (now you have to actually have them😊). While we are still above pre-pandemic price points, as to be expected, we are leveling off. The demand in Florida is still stronger than most of the country – we attract the 2nd home, vacation home, rental market and those from up north that simply want our weather and lifestyle. However, there are changes ……
Cash sales are down significantly, inventory is up across the board and new listings on market have slowed. The mortgage rates and stock market portfolio losses are impacting all markets and Palm Beach county is not immune to these changes. Don’t get us wrong, homes are still selling – we are in fact busy realtors – but the homes are taking longer to sell, our costs to market homes has increased significantly and our time for showings (yes, we personally show our listings) and open houses take more manpower. Of course, we’re not complaining as this is what differentiates great agents from the pack. We’re sharing because it is a distinction from what has occurred over the past several years.
People often ask us whether this is a good time to sell and/or to buy. The answer is yes; however, the strategy and the numbers change. Specifically, some buyer’s obtaining a mortgage may have to reduce their price point to keep their monthly costs the same. And, what goes into selling your home, from staging to repairs should be considered more so then before. Regardless, there is additional inventory now for buyers to choose from and sellers, there are buyers still wanting to buy. Get ready to work with your Realtor (Amy and Noreen Team preferably) to ensure your home stands out from the rest.
For those of you who follow our monthly market report and follow the numbers indicating the market strength and leverage, they are as follows:
As you recall, balanced market is 6 to 9 months of inventory – meaning if nothing else came on the market how many months would it take to “consume” all of the inventory. Over 9 months buyer’s market..
400,000 – to 599,999 – 4 months of inventory –
599 – 999,999 – 6 months of inventory – recently reached a balanced market and sellers have lost their advantage
1,000,000+ price point 9 months (yes I said it 9 months) – first time in 2022 that we have reached 9 months of inventory – there are now many options for buyers to select from, hence the price reductions we’re seeing on market
Understanding the market helps agents and consumers alike make educated decisions – this is why we spend time every month sharing our research and what it means to you.
If you have questions or would like to discuss the results any further, please do not hesitate to reach to us at 561.571.2289.
Amy
Want to know what top events are happening in Palm Beach County in the month of November 2022? Listen to Noreen Payne’s video overview. Join us every month for highlights of top events in the area!
There are many variables that make September results interesting! The final results and evaluation of the next few months are going to be critical to really ascertain and give guidance on our Palm Beach County market.
First, the week leading up to now, Ian, as you can imagine, caused a pause in most of Florida’s market – the path of the Hurricane was unclear and therefore most sellers and buyers chose to wait before taking any action on their real estate decisions. Further, for any buyer under contract to close on a home in September, if they had not yet bound their new insurance policy, insurance agents were unable to complete the process therefore causing closings to be delayed. The above skewed, of course, new listings coming on market, buyers going under contract and closings for the month of September.
Another variable, though may also be the trend for our future, is that we are back to season in our market. Historically and prior to our pandemic years, we saw a drop off in summer months and the market did not typically pick back up until we approached our season – October, November timeframe. For the past 3 years or so, we were strong 12 months of the year with many people desperately wanting to relocate or purchase a second home in south Florida. The lifestyle we offer in Palm Beach County fueled the real estate market. With September’s results showing a decrease in almost all categories across the board, we need to wonder if we are back to “seasons” of real estate in Florida or were we simply impacted by the Hurricane.
Yet another aspect is mortgage rates. Cash sales were down again this month which means more people are financing the homes they are buying. With interest rates higher than we have seen in many, many years and the threat of continued increases in those rates, we know that people are looking at lower price points than they did one year ago, and others are simply not able to purchase or purchase what they want and are holding off for now.
All three (3) of the above variables impacted our September results, we will be closely monitoring the next few months to really ascertain whether we are back to prepandemic market seasons and how much the interest rate will impact our unique market.
With all of that said, Noreen and I had a very busy September with both listings and buyers going under contract. I share that because I do think it is worth mentioning – when homes are priced properly, and buyer expectations are also set upfront – homes move. People still want to sell and people still want to buy but realistic expectations are critical and the market is clearly indicating this fact.
In EVERY price point which we evaluated, months of inventory crept up by at least one month – $600- $900 and then $1,000,000 and up – is officially in a balanced market – for $1,000,000 we are actually approaching (on the cusp) a buyer’s market – but from a recommendation perspective of our team – we caution anyone to get too confident and treat the $1,000,000 and up price point as a balanced market. Too many factors impacted September results to change strategy at this point; however, we currently have the most inventory at every price point over any month in 2022.
I hesitate to share specific numbers as almost ¼ of our month was impacted by the Hurricane (Ian) and we don’t feel that these numbers are truly an indication of where our Palm Beach market truly stands – cash sales down, median and average price points down, new listings and new pending are down as well and inventory was up almost 68% from this time last year.
All of the above said, we are extremely confident that our market is still very, very attractive and is a highly sought-after place to live, work and play. While this month we experienced a shift, we believe it was a temporary shift (as to the degree of which we shifted). We will not continue, at this time, to see unsustainable growth in price points but we will see properties moving at price points higher than the pre-pandemic times.
Our greatest advice in this market, choose your real estate partner wisely😊
Amy
Palm Beach County – Due to our area being a popular destination location for vacation, seasonal rentals, 2ndhomes and relocations, PBC reports a different real estate story than much of the country. I was recently interviewed by a reporter with the Sun Sentinel and while answering her questions regarding our current real estate market, I thought, maybe, I was off base as to the strength of our market; however, when the article came out, it was reaffirming that all the agents interviewed shared the same sentiments.
In analyzing the market, we review countless numbers and timeframes and compare the statistics to the same time last year (year over year) as well as month over month trends. To clarify, year over year, the seasonality aspect of our area greatly impacts the real estate market in Palm Beach County.
As we assess the August results for Palm Beach County..
Year over Year –
No surprise to any of us that the median and average prices are higher than they were in August 2021 – but, even with the higher price points, the total volume of closed sales for August 2022 is lower than August 2021. The fact is, we’ve had fewer closed sales this year than this time last year and the percentage of cash on these sales is down as well. At first glance, you’d expect to see cash sales increasing due to the rapid rise in interest rates; however, with prices still significantly higher than last year, investors seem to be holding and waiting for the market to cool. New pending sales and pending inventory are down from the same time last year – the net is that properties are not moving as fast as they were, in fact, inventory is up by 63% year over year. More inventory is coming to market which is adding to the current active listings creating more options in the market at all price points.
Month over Month –
August 2022 versus the past 4 months in Palm Beach county tells a very important tale – our market is leveling off price wise but at a much slower pace than the reports out from the rest of the country. Both median and average sales price are trending down when compared to the few months prior – we are now coming into season so it will be interesting to watch if this influx of people from out of our area impacts the pace in which our market is leveling. One of the lagging indicators of our market is median percent of original list price – Are Sellers considering less than list price? The answer is yes, they are – we have held strong in our area on this indicator but July and August results show that sellers are realizing that in order to sell their home they may have to come off their price for the first time in a while. New listings onto market have slowed this month versus last month which was different than what we expected. We have been busy bringing new listings onto market over the past several months and are surprised to see the numbers down in Palm Beach County – however, we realize that this is not across the board but rather an indication of the hot destination area in which our team works.
The results of the numbers show that the $300K to $999,999K price points remain a Seller’s market – however, a different seller’s market than over the past few years. Homes are taking longer to go under contract, longer to close (which is no surprise with fewer cash sales), homes are selling for less than list price and inventory is up significantly at these price points. Over $1,000,000M – we went from 5 months of inventory in July to 7 months of inventory in August – fewer new listings and fewer closed but more inventory? Yes, exactly what we have been saying for months – Sellers (and Realtors for that matter) need to adjust price at this higher end market. It is the not the same market that it was just a year ago – there is much more supply than there was, more options for buyers to choose from and now sellers are willing to negotiate and take less than their list price.
We are simply back to basics when selling homes in Palm Beach County’s high-end market. All that goes into preparing to sell your home really, really matters – taking time to get all of the information needed to properly market and sell a home is key. No more racing to market – do it right. Slow down, understand the attributes of the home, determine how to handle any potential deficiencies in a home – have a strategy or even fix it before going on market. While we have always shown our listings personally, we saw over the past few years more Supras (lockbox’s) than ever before. A home will not sell itself anymore for the highest and best price without an agent there to tell the story and properly sell and market the property. For the Amy and Noreen Team – we sigh a big sigh of relief – this is where we shine.
The good news for Palm Beach County- demand is still high and supply relatively low. Partner with the right Realtor (or in our case Real Estate Team), understand the market conditions and the reality of our current market. Homes will sell when marketed and priced properly.
We would love to be your trusted resource for all things real estate in South Florida, specifically Palm Beach County, as well as understand the market that you cover for future referrals. Our business takes us from Boca Raton up through Palm Beach Gardens, and all areas in between. Look for future emails in which we show you exactly which areas our team services. In order to be bestowed your trusted South Florida Realtor referral agent, we want you to get to know us a bit better. Watch this video to hear more about who we are and what makes us tick!
Want to know what top events are happening in Palm Beach County in the month of September 2022? Listen to Noreen Payne’s video overview. Join us every month for highlights of top events in the area!
Check out our new listing in Delray Beach. A tropical oasis in the highly sought after community of Lake Ida in the heart of East Delray! 3 bedroom and 2 bath with a 1 bedroom and 1 bath Studio. Exotic lush landscaped almost a 1/2 ACRE surrounds this old Florida charming home.
Want to know what top events are happening in Palm Beach County in the month of August 2022? Listen to Noreen Payne’s video overview. Join us every month for highlights of top events in the area!
Based on June numbers, our Palm Beach County July market report is proving to be very interesting. If you watch, the media is touting doom and gloom for real estate around the country – and while things have definitely slowed from the frenetic pace that we’ve experienced over the past few years, the Palm Beach real estate market is far from doom and gloom. In fact, as we’ve stated in our past reports these last few months, when marketing properly and priced appropriately, homes are selling…period!
HOWEVER, our reality is that the market that “was” is not the same now. That market was unsustainable, and we all needed it to soften a bit. Inventory was lacking at all price levels but we now have more inventory! Demand is still high and with inventory increasing, Buyers have more choices. Now more than ever, when Buyers have options, Sellers need to pay more attention to how their home looks, how it is priced, and how it is marketed. If you have been reading our reports you know that one of the leading indicators of the market is inventory – if nothing new came to market – how many months would it take to “consume” all that is available – you also learned that a balanced market is 5-7 months of inventory; below 5 is a seller’s market and above 7 is a buyer’s market. While under $999,000 is still a Seller’s market – our months of 1 or 2 months of inventory has now reached 3 and 4 months of inventory – inching towards a balanced market. Over $1,000,000 – is sticking at 5 months – low end of balanced but nevertheless balanced.
So, what makes this interesting? Well, as expected, the higher interest rates have cooled the market (at varying price points), certainly hasn’t stopped the market but rather slowed it down. For the first time within the past year, June results show that year over year results have declined. As it relates to closings, last June happened to be higher than normal but we cannot ignore the fact that the astronomical increases have ceased. Closed sale numbers are similar to pre-pandemic numbers; however, prices are up substantially.
In Palm Beach County, prices remain strong but the price points are responding to the increase in inventory. There are simply more options for people. Driving around we see more signs – we see more price reductions – we have more competition.
So, Buyers, this is the first month in sometime that we are reporting good news – there are more properties!
Sellers, it continues to be very good news for you as well. Buyers are still relocating to our area! Price properly, ensure marketing is firing on all cylinders and ensure you partner with a Realtor or Team who knows how to get you to the closing table. Given that there is more inventory, buyers may exercise their right to cancel under inspection. Experience and Finesse is needed to keep deals together .
Looking for the right partners? The Amy and Noreen Team of Lang Realty are ready to spend time with you, educating you on the market and rolling up our sleeves to continue doing what we do best!
