Jupiter rental prices up to record levels
Let’s face it, the real estate market here in the Jupiter area has been doing quite well. Over the past 5 years median real estate prices in Jupiter have been up each and every year. Median condo prices in Jupiter were $155,000 in 2011. So far in 2016 they have been at $275,000. The median Jupiter single family home sale in 2011 was at $310,000 and this year $450,000.
Rental prices also have climbed and so far the median priced Jupiter single family home rental in 2016 is going for $2,800 per month. For a condo in Jupiter the median rental price this year is $1,700. Both numbers are up over 7.5% from 2015 numbers so if anyone tells you inflation is in check tell them it isn’t in the world of Jupiter real estate.
Real estate values, whether a sales price or rental rate are a complex subject with no easy answers. We have been either building or selling real estate since we graduated from college in 1981 and need to study numbers daily to even have a clue what way the market is heading.
The world we live in is very complex and old rules and standards have been thrown out the window. Our national debt is out of control, the cost of borrowing money remains at all time records lows as the Federal Reserve tries to stimulate an economy even though stocks are trading at record levels.
Inventory levels have been dropping for months but still buyers have far more options that they did a year ago. Demand has been off from 2015 but still solid. New home construction is again starting to boom with huge developments coming our way in the Northern Palm Beaches. Prices are high at most of these new communities. DiVosta has two homes advertised on our Multiple Listing Service at this minute in their Sonoma Isles community and both are priced above $1 million. Kolter Homes at Alton in Palm Beach Gardens look like a value with prices on their 7 homes listed on the MLS starting at $645,900. Larger communities far west of the Florida Turnpike will bring more reasonable prices and should help push prices near the coast even higher.
Rents have been heading higher but is it sustainable? Most experts will tell you that those renting should not be paying more than 30% of their annual income for rent. In Jupiter at today’s single family home rental prices that means income for the tenant should be $112,000. On that $1,700 “median” condo income should be $68,000.
According to Sperling’s the median household income in Jupiter is $66,713 which means less than half of Jupiter’s families have enough income to live in a median priced condo rental. Sperling’s says only 16.5% of Jupiter homes have family income above $150,000. The reality is when you look into the numbers the majority of people who live in Jupiter could not afford to buy in Jupiter at today’s prices. Tenants who cannot afford todays rising rents will be forced to move and that is very sad for a community. Eventually the market will correct and prices will retreat. If a landlord cannot fill their units they will lower prices. As demand weakens so will prices. As of today, we do not see that correction in the immediate road ahead. In a couple days watch for Paradise Sharks monthly look at single family home prices and they will be up…..again.