The latest data for Palm Beach County is out – results from February 2022 tell good news for our market.
Everyone, in almost every county and state, knows that inventory is low and while great for Sellers – not so great for Sellers who need to relocate and buy or just general buyers coming into a market.
When a market is balanced, everyone has more options, has room to negotiate and we see fewer bidding wars. While we are far from a balanced market, we are seeing some important changes.
Every month, without fail, our team analyzes the market reports specific to Palm Beach County and we delve into the numbers by price point. The price point differential is very important, especially in Palm Beach County, where we have a large percentage of higher priced homes. This is where we are starting to see a divide – homes under $600,000 are trending one direction while homes above $600K, above $1,000,000 in particular are trending in another.
For example – the overall inventory for Palm Beach County – all price points is 2.0 months – a strong, very strong, sellers’ market.
In actuality, the months of inventory up to $600,000 is in fact 2 months; however, $600,000 to $1,000,000 increased from 2 months up to 3 months of inventory and the interesting story is homes $1,000,000 + increased d to 5 months of inventory – right on the cusp of a balanced market. We have more inventory over $1,00,000 than we have had in quite a long time.
In addition to the monthly statistics, we also receive notifications daily of all adjustments in our Multiple Listing Service and we are seeing more price reductions every day. Now personally, we do not think that this is a sign of the market slowing down from a supply/demand perspective. Rather, we believe that buyers are starting to say that there is a limit to how much they will pay for a home. Interestingly this is not across the board – waterfront homes, proximity to hot spots such as Delray’s Atlantic Avenue, are not only holding value but values continue to climb. Working with an agent who understands the market, understands your neighborhood and “who” the buyers are for your home is even more essential in this wild, wild west market we are all living in today.
The other news that so many of our clients are asking us about is in regard to the fact that the Federal Reserve announced, as you know, that they will raise interest rates a few times this year which means we can most likely expect increases in mortgage rates as well. While we do understand that it may impact how “much” someone can buy, the fact is people can still buy. Rates are still low on the historical scale. We still have a healthy percentage of cash buyers in our Palm Beach market which can make it difficult for a buyer obtaining a mortgage, but that percentage went down across the board.
What advice do we give in this market to our Sellers – price strategically, price aggressively BUT price wisely – what you don’t want, as we have shared before, is to sit on market, in this market in particular, or have to reduce – the strategy in this market is price right and they will come! Many of them bringing a multiple situation.
For our buyers – you can find a home, you can buy – you just need the right partner on your side. Relationships with other Realtors make a difference in a competitive market such as this, expertise of the contract and how to structure an offer are a competitive advantage (I would argue that is the case in any market but more so today) and a strategic agent who can work with you to put a plan in place to get you in the right home is the key.