According to the Miami Association of Realtors, total Palm Beach County home sales rose again in July 2021 year-over-year as pent-up demand, more U.S. people and businesses migrate to South Florida, and record-low mortgage rates fueled transactions.
Total Palm Beach County home sales rose 1.8% year over year from 3,256 sales to 3,315 in July 2021. Single-family home transactions in Palm Beach decreased 8.6% from 1,940 to 1,774. Existing condominium sales in Palm Beach rose 17.1% from 1,316 to 1,541.
“Palm Beach County’s luxury sales remain one of the strongest markets in the country,” said Bill Mate, president of JTHS-MIAMI. “Sales rose before the pandemic. The pandemic and the increase in the availability of remote working have only accelerated the demand for our low-tax, government-friendly, waterfront lifestyle. “
Home sales in Palm Beach are also higher overall than in July 2019. Total home sales in Palm Beach increased by 10.2% from 3,007 to 3,315 in July 2021 compared to July 2019. Palm Beach single-family home sales (0.6% decrease) and condominium sales (25.1% increase) are higher than in July 2019.
Palm Beach Condo Demand Increases; Condominium sales up 17.1% yoy in July 2021
With so many US companies and individuals moving to our area in the past year, many of those moving home buyers are trading on the condo inventory. International homebuyers, who have long preferred condominiums, have some catching up to do with South Florida property and are also returning to the No. 1 market for overseas homebuyers.
Existing condominium sales in Palm Beach rose across all price ranges in July 2021, with large transaction growths in home sales starting at $ 300,000.
The lack of stocks in certain price ranges has an impact on sales, especially in the case of single-family homes. Increased home starts and more sellers listing properties in 2021 should help alleviate the lack of supply. More inventory is expected to hit the market later this year as it makes it easier for potential home sellers to list and display their homes. The falling number of homeowners in mortgage debt will also lead to more inventory.
Palm Beach luxury sales rise as buyers on the northeast and west coasts move to the mega-region
Palm Beach single-family luxury deals ($ 1 million or more) rose 13.3% year-over-year to 264 sales in July 2021, to 83 deals over the year.
In luxurious single-family houses there is a 3.5 month offer; 3.3 months supply in luxury condominiums. The month on month and year on year the supply months in the luxury class continued to decline for all property types.
Low interest rates; a rugged S&P 500; the attractiveness of stable assets in a volatile economy; Homebuyers leaving tax-burdened northeastern states to buy in Florida (no state income tax); and the guidelines for working from home and distance learning have all together created a robust market for luxury single family homes.
With rising global vaccinations and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers also come here to buy the vaccine and purchase real estate. Global buyers are buying in South Florida because the mega-region is a world-class region with better property prices than other similar global cities. Foreign buyers feel at home in our incredible diversity and acceptance of all cultures.
Palm Beach single-family homes priced between $ 400,000 and $ 600,000 rose 8.8% year over year to 534 transactions in July 2021.
The number of single-family homes is increasing from month to month as more offers come onto the market
Palm Beach County’s inventory of single-family homes increased in July 2021 compared to June 2021, an indicator that more inventory is heading for the low-supply / high-demand market.
The number of active single family home listings in Palm Beach increased 10.3% from 2,260 to 2,493 in July 2021 compared to June 2021.
The number of single-family homes declined by 46.3% year-on-year in July 2021, from 4,642 active listings last year to 2,493 last month. The stock of condominiums fell by 60.8% year-on-year to 2,256 from 5,751 entries in the same period in 2020.
The monthly supply of inventory for single family homes fell 55.9% to 1.5 months, suggesting a sellers’ market. Existing condominium inventory declined 73.2% to 1.5 months, suggesting a sellers’ market. A balanced market between buyers and sellers offers an offer between six and nine months.
The monthly supply of inventory has been falling for single-family homes since July 2019, reflecting the strong demand. The total number of active entries decreased by 54.3% year-on-year from 10,393 to 4,749 at the end of July 2021.
Palm Beach new family home registrations decreased 0.5% from 1,949 to 1,940. New registrations of condominiums fell 6.2% from 1,704 to 1,598.
At the national level, the total housing stock at the end of July was 1.32 million units, 7.3% more than in June and 12.0% less than a year ago (1.50 million). The supply of unsold inventory is 2.6 months at the current rate of sales, slightly above the 2.5 month figure in June, but less than 3.1 months in July 2020.
The home equity of Palm Beach homeowners is increasing as many pay lower mortgage payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So many homeowners today are not just paying lower mortgage payments; they do this while their home equity has grown significantly. Home equity can be used for home renovations, college loans, and more.
Average single-family home prices in Palm Beach County rose 25.3% year over year from $ 399,000 to $ 500,000 in July 2021. Median prices for existing condominiums rose 13.7% year over year from $ 205,000 to $ 233,000.
The higher share of luxury sales in Palm Beach in 2021 compared to the previous year is one of the reasons for the strong increase in median prices compared to the previous year.
Rising median prices are a trend across the country as record-low mortgage rates and the increasing availability of remote working and education have accelerated the demand for housing. Low stocks in relation to high demand lead to rising prices.
Lower mortgage rates make home buying more affordable. According to Freddie Mac, the average commitment rate on a 30-year conventional fixed-rate mortgage was 2.87% in July, down from slightly lower 2.98% in June. The average commitment rate for the whole of 2020 was 3.11%. NAR chief economist Lawrence Yun predicts the 30-year fixed-rate mortgage will stay below 3.5% in 2021.
Should mortgage rates continue their upward trend, home price growth is likely to slow in response. With more sellers offering real estate in 2021, the increased inventory should dampen median price growth.
Palm Beach dollar volume is $ 2 billion and shows the power of housing
While other industries struggled last year, residential construction boosted economies at the national and local levels. One job is created for every two homes sold in the US. The volume of the Miami dollar shows the impact of housing construction on the local economy.
The dollar volume for single family homes grew 2.5% year over year from $ 1.4 billion to $ 1.5 billion. The dollar volume of condominiums increased 40.5% year over year from $ 400.7 million to $ 563.1 million.
The lack of access to mortgage loans continues to hold back the further growth of the existing condominium market. Only 19 of the 1,929 condos in Miami-Dade, Broward, and Palm Beach counties are eligible for Federal Housing Administration loans as of August 17, 2021, according to the U.S. Department of Housing and Urban Development.
A better condominium approval process should increase sales. The guideline, which came into effect in October 2019, extends certifications from two to three years, enables individual mortgage approval, offers more flexibility in terms of ownership / occupancy, and increases the number of FHA loans allowed in a single project. The changes that many at MIAMI and NAR have advocated are likely to lead to more home ownership.
Distressed sales in Palm Beach County continue to decline, reflecting a healthy market
Only 0.7% of all closed Palm Beach home sales were in distress last month, including REO (bank-owned property) and short sales, compared to 2.5% in July 2020.
Total Emergency Palm Beach sales decreased 72.5% year over year from 80 to 22 in July 2021.
Short sales and REOs accounted for 0.2% and 0.4%, respectively, of total sales in Palm Beach in July 2021.
Palm Beach real estate is attracting multiple bids, with buyers going above list price
The average percentage of the original list price for single family homes was 100% in July 2021, up 4.3% from 95.9% last year. The average percentage of the original listing price for existing condos was 97.7%, up 3.6% from 94.3% last year.
The average number of days between listing and contract dates for single family home sales in Palm Beach was 10 days, down 81.1% from 53 days last year. The average sales time for single-family homes was 57 days, down 41.8% from 98 days last year.
The average number of days between the listing date and the condo contract date was 15 days, 76.6% less than 64 days. The average number of days to sell condos was 61 days, down 42.5% from 106 days.
Palm Beach Cash sales more than double national number in July 2021
Cash sales accounted for 48.3% of completed sales in Palm Beach County in July 2021, compared to 37.1% in July 2020. According to the latest NAR statistics, approximately 23% of US home sales are in cash.
The high percentage of cash buyers reflects South Florida’s top position as a pre-eminent American real estate market for overseas buyers who tend to buy with cash, as well as some who are migrating from more expensive US markets that can buy more with their profits from real estate sales.
Cash sales represented 58.0% of all existing Palm Beach County condos and 39.8% of single-family transactions.