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!