Total Palm Beach County’s home sales soared in February 2021, as pent-up demand and record-low mortgage rates continue to fuel transactions, according to the Miami Association of Realtors.
Total Palm Beach County home revenue increased 3.1% year over year from 2,248 to 2,318 in February 2021. Palm Beach single-family home sales decreased 1.8% year over year from 1,233 to 1,211. Existing Palm Beach condominium transactions increased 9.1% year over year from 1,015 to 1,107.
“Record low interest rates, home buyers leaving tax-burdened northeastern states, and work from home and distance learning policies have all worked together to strengthen Palm Beach real estate,” said Bill Mate, president of JTHS-MIAMI.
The demand for real estate in South Florida is reflected in the mean contact time. Single-family homes in Palm Beach County are contacted in 30 days, 50.8% faster than a year ago (61 days). Palm Beach condos are being signed for 40 days, 32.2% faster than a year ago (59 days).
The lack of inventory in certain price ranges has an impact on sales, especially in the case of single-family homes. Rising home starts and more sellers offering properties in 2021 should help alleviate the shortage.
Palm Beach County’s Luxury Single Family Home Sales Up 62.3% in February 2021
Palm Beach County’s single-family luxury deals (starting at $ 1 million) rose 62.3% year over year to 172 sales in February 2021. Palm Beach luxury home sales ($ 1 million or more) rose 93.8% year over year to 93 transactions.
The supply of luxury months for all types of property continues to decline in a month-on-month and year-on-year comparison.
Palm Beach single-family home prices between $ 400,000 and $ 600,000 rose 9.4% year over year to 314 transactions in February 2021. Sales of existing Palm Beach condominiums between $ 400,000 and $ 600,000 rose 56.5% to 108 transactions.
Record 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); Work-from-home and remote learning policies have come together to create a robust market for luxury single-family homes.
Strong price recognition in Palm Beach
The strong demand combined with the limited supply is driving the price increase in Palm Beach further.
Palm Beach County single-family home prices rose 24% year over year from $ 363,000 to $ 450,000 in February 2021. Existing condominium prices rose 24.9% year over year from $ 189,000 to $ 236,000.
The volume of single-family homes and condominiums is increasing
The volume of the single family home dollar increased 36.4% year over year from $ 750.7 million to $ 1 billion. The volume of the condo dollar rose 43% year over year from USD 337.5 million to USD 482.6 million.
According to Freddie Mac, the average commitment rate for a 30-year conventional fixed-rate mortgage was 2.81% in February, down from 2.74% in January. The average commitment rate for the whole of 2020 was 3.11%.
The lack of access to mortgage credit continues to hold back the further growth of the existing condominium market. Of the 9,307 condos in Miami-Dade and Broward counties, only 13 are eligible for Federal Housing Administration loans, up from 29 last year, according to the Florida Department of Business and Professional Regulation and the FHA.
A better condominium approval process is expected to increase sales. The guidelines, which went into effect in October 2019, extend certifications from two to three years, allow single-unit mortgage approval, offer more flexibility in owner-occupancy ratios, and increase the number of FHA loans allowed in a single project. The changes that many of MIAMI and NAR have advocated for are expected to result in increased home ownership opportunities.
Pressed sales in Palm Beach remain low, reflecting the healthy market
Only 1.4% of all closed Palm Beach residential property sales were in distress last month, including REO (bank-owned property) and short sales, compared to 2.8% in February 2020.
Total Palm Beach sales decreased 50% from 64 to 32.
Short sales and REOs accounted for 0.3% and 1.1% of total Palm Beach sales in February 2021, respectively, in February 2021. Short selling was down 40% year over year, while REOs were down 51.9%.
Nationally, distressed sales represented less than 1% of sales in February 2021, compared to 2% in February 2020.
Palm Beach Real Estate Selling near List Price
The median percentage of the original list price for single family homes was 96.6% in February 2021, up 1.7% from 95% the previous year. The median percentage of the original listing price for existing condos was 95.3%, up 1.7% from 93.7% last year.
The average number of days between listing and contract date for single family home sales in Palm Beach was 30 days, down 50.8% from 61 days last year. The median number of days between the listing date and the condominium closing date was 40 days, a 32.2% decrease from 59 days.
The average sales time for single-family homes was 73 days, a 29.1% decrease from 103 days last year. The average number of condo sale days was 82 days, down 15.5% from 97 days.
Palm Beachs Cash Buyers Top National Figure
Cash transactions in Palm Beach represented 49.2% of total completed revenue in February 2021, compared to 47.7% the previous year. The national figure for cash buyers is 22%.
The high percentage of cash sales in Palm Beach reflects South Florida’s ability to attract a wide variety of international buyers who tend to buy real estate for cash.
Condominiums make up a large portion of Palm Beach’s cash purchases, as 58.3% of condominium closings in February 2021 were in cash, compared with 40.9% of single-family home sales.
Seller’s market for single-family houses, condominiums
The number of single-family homes decreased by 52.5% in February 2021 from 6,282 active offers last year to 2,987 last month. The stock of condominiums decreased by 25.4% from 6,170 offers to 4,600 in the same period in 2020.
The monthly inventory supply for single family homes decreased 52.4% to 2 months, indicating a sellers’ market. Existing condominium inventory decreased 24.1% to 4.1 months, indicating a buyers market. A balanced market between buyers and sellers offers an offer between six and nine months.
The monthly storage supply for single-family houses has decreased since July 2019, which is due to the strong demand.
The total number of active listings at the end of February 2021 decreased by 39.1% from 12,452 to 7,587 compared to the previous year. Active listings remain about 60% below their 2008 levels when sales bottomed out.
New family home registrations in Palm Beach fell 13.5% from 2,039 to 1,763. New registrations of condominiums fell by 2.7% from 1,838 to 1,788.
Nationwide, the total housing stock at the end of February amounted to 1.03 million units, which corresponds to the inventory in January, and decreased by 29.5% compared to the previous year (1.46 million). The unsold inventory is 2.0 months at the current sales speed and is thus slightly above the 1.9-month offer in January and below the 3.1-month amount recorded in February 2020. NAR first began tracking the supply of single family homes in 1982.