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January 2023 Market Report – December 2022 Data for Palm Beach County – by Amy Snook

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January 2023 Market Report – December 2022 Data

It is frustrating as can be when you watch the news or read the newspaper and the media summarizes what is happening in our Palm Beach market – I believe it is over-simplified and all price points are lumped together presenting an inaccurate assessment.  How can sellers and buyers make an educated decision of when to sell, when to buy, how to price, etc. without fully understanding the total environment in our community?  It is for this reason that we take the time every month to analyze the numbers, the trends and the issues impacting our local market.

 

This month’s market report reports the results of our final month in 2022 – the December market report and we believe will be eye-opening to many sellers and non-seasoned agents. First, the media reports 3.2 months of inventory for Palm Beach County – while this is true at the $300,000 price point, it could not be further from the truth at the $1,000,000 price point, which is showing 10 months of inventory. This stark contrast between average and breaking it down at price points is what is causing many in the community to improperly price their listings. Three months of inventory is a strong sellers’ market – and we have learned over the past three years that a strong seller’s market can provide a setting of the Wild Wild West with multiple offers, waiving of contingencies and an all-out frenzy. On the contrary, 10 months of inventory, as evidenced in our higher-end market is a completely different environment and one that gives the buyer the leverage, which is the antithesis of our experience over the past three years. The $400K through $999K presents a balanced market, one in which neither sellers nor buyers have an advantage.

 

It is for this reason at our higher-end market that we are seeing homes sitting for much longer since buyers have more options now from which to choose.  We also have sellers and Realtors alike who have not yet acknowledged that our market has softened. It is difficult to properly price a listing today because there isn’t a history of comparables that tell a realistic story. You have to understand the market and where we are headed to price a listing and even then, you have to really listen to the market’s feedback and adjust. Realtors, we have to once again spend money to make money. For those of us who saw this coming and saved our money, we are in a good position to market our listings. Mostly everyone does professional photography, but should add to this video marketing, print advertising, social media paid ads, postcards and good old-fashioned smiling and dialing to others in the industry. Sellers, you need to be prepared that your home will take longer to get under contract with the median time to reach a contract doubling year over year.

 

As we closed out 2022, we acknowledged new listings are down but inventory is up more than 120% from the same time last year, which is great news for our economy. Median and average sales prices are NOT up, however. They are down significantly from the same time last year. We are blessed that our Palm Beach County is a destination location with second homes, vacation homes and even remote workers keeping our market protected from the huge swings many other areas of the country have seen. In fact, I just attended the Florida Realtors convention in Orlando and heard their economist, Dr. Brad O’Conner, speak about 2023 trends and he was optimistic about what the year will bring, barring any catastrophic unexpected events.  

 

The graphs showing 2022 results are much more comparable to those pre-covid. We once again have seasonality in Florida real estate – we are heading back to “normal.”

 

Our advice to sellers: You have to be fiercely competitive with the others home-sellers on the market. There are lots for buyers to choose from – to stand out from the crowd – not just in price but in curb appeal and how your home is marketed and shown. Price it strategically, but not unrealistically. If you are interviewing Realtors, ask how they plan to market your home. Of course, price is one facet and you and the agent together should determine the price based upon many factors. Price can change, but how hard a Realtor works to sell your home is critical. Remember, you need to stand out from the crowd and be a fierce competitor!

 

Amy

 

July 2022 Market Report for Palm Beach County – By Amy Snook

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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!

June 2022 Market Report for Palm Beach County – By Amy Snook

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The results are in from May’s Florida real estate market and as predicted in our last few updates we are at a balanced marketnow for $1,000,000 and higher in Palm Beach County.  We have watched it tick up slightly each month and with the influx of inventory we are officially there.   That is a good thing for all of us.  However, in Palm Beach County – all price points are not a balanced market – $600,000 and below is still very much a strong seller’s market.     As we have shared many times – the average across Florida (and across the country for that matter) is not representative of Palm Beach County – to a degree, we are protected with many people still wanting to come to our area and enjoy the benefits of living in South Florida.

 

All of that said, there are some stark realities that we need to accept – current events in our world is impacting the real estate market as a whole.   We are seeing what we would call a “pause” people evaluating their next steps – leveraging more of their wealth in real estate and less in the stock market; will home prices hold their value?  This analysis in conjunction with an increase in interest rates and more inventory coming on, in all segments; we are now back to pre-pandemic marketing strategy of selling homes – for those of us agents who know how to really sell a home versus simply putting it in the MLS – this brings a big sigh of relief.    We can move back to quality and our clients can trust that they are working with experienced professionals.

 

Showings with agents “selling” the attributes of a home, staging a home, curb appeal, spending money to really market a home – print media, social media, videos, photography, drones, 3d tours, advertising – it is all coming back for our luxury market.   While we know many potential sellers reading this report are thinking “how is this good for us selling our home” (versus flying off the shelf that we have seen for the past several years) – please know that, simply put, if our market continued to increase at the rate it has – it is not, in our humble opinion, sustainable.   At the same rate – we are still experiencing the effects of supply and demand; supply continues to be lower than pre pandemic. Our area is highly desirable and homes will continue to sell.

 

Who you partner with to Sell your home or Buy a home – really makes a difference now more than ever.

 

If you want to learn more about the market or how we can help you with your own real estate needs, please contact us at 561-571-2289

Market Report – March Report – February Results

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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.