March 2023 Market Report – February 2023 Data For Palm Beach County – By Amy Snook
A client recently asked us to forecast our local real estate market over the next year. My initial thought was to look at the trends that impact our typical real estate market such as supply, demand and inventory. However, in today’s environment there are many other factors to consider such as: interest rates, inflation, the banking crisis, politics, global threats, stock market, etc.. We are currently in and believe will continue to be in for a bumpy ride, simply put, there are too many variables at this time to forecast one year out. Even when running comparables to determine a list price or for a buyer’s offer, we can’t go back even six (6) months to compare as too much has shifted in the market.
From a trends perspective, we are tracking more in line with the pre pandemic (2019) market where we could plan for seasonality and all of the familiar nuances of our Palm Beach county real estate market.
Trends aside, today we are still in a lower inventory market than we were pre pandemic, but of course are almost double where we were just one year ago. New listings in Palm Beach county have slowed, most likely for several reasons:
- Many people are locked in a better interest rate for their current home mortgage and if they have to finance their new home, it would be at a higher interest rate.
- We realize how great we have it here in Florida – so many residents are simply staying put.
- If you sell, where would you go if you are in the under $1,000,000 price point? – inventory is still low.
The good news from the February results just released is that the softening we experienced when the Fed started increasing rates is having less of an impact. Rates on a 30 year fixed loan came down slightly earlier this year and that fueled buyers’ activity once again resulting in an increase of closed sales in February. With more homes being closed but still with a lower number of new listings coming on, this change has shifted our months of inventory at almost all price points below one million.
This shift brings us back to a stronger seller’s market under $600K and a more balanced market up to the one million dollar price point.
Over one million in Palm Beach county continues to remain just under twelve (12) months of inventory making it a strong buyer’s market. However, with low inventory and high demand for the Florida luxury market, our prices have been more stable reducing slightly versus a steep decline.
This month I want to address the condo market in south Florida. By now you have probably read or heard about the upcoming changes to ensure structural integrity and adequate reserves for condos that meet certain criteria such as proximity to the coastline and number of stories in the building. The changes do not fully take effect until December 31st, 2024 however, the impact of the changes are already being felt. The condo market is absolutely going to be a case by case analysis by building – and we as Realtors need to understand what questions to ask so that we can better advise our clients on what to expect from a construction perspective in the building to potential special assessments. It is important that consumers align with Realtors who are versed in these changes and the financial impacts associated. Many current homeowners are faced with increasing dues and current and future special assessments. We are in for a very interesting condo market over the next few years.
Our current market is changing often so analyzing the results is even more critical and breaking out by price point and product (condo versus single family as an example) is essential to providing worthy guidance to our clients. At The Amy and Noreen Team we continue to keep up with the rapidly fluctuating market and are here to help in any way!
Amy
