Surfs up in Jupiter but not the real estate market
If you have been keeping up with Paradise Sharks weekly market updates you know that pending home sales in Jupiter and the neighboring communities have been down for many months. We have told you not to worry as the seasonal buying should kick in come January. If you go back and check the first half of January pending home sales go up every year. In 2016 they were up. 2015 up. 2014 up. 2013 up. You get the picture. Last year in that 15 day period pending home sales in the Jupiter area moved higher by 6%. Certainly we were going to see contracts being written and pending home sales move higher. This market was going to start kicking back into gear.
But this year things are different. Here we are on January 15th and we have fewer pending home sales than we did at the beginning of the year. That just does not happen, or at least it is not supposed to. The drop was not huge, barely noticeable, but it was a drop all the same. Over the past month pending home sales in the Northern Palm Beaches are down an astounding 16%. We keep sitting, watching, hoping for the tide to turn but so far it has not.
What is the problem? Interest rates spiked after the election but have now fallen for 3 straight weeks and a 30 year fixed note is back again under 4%. Maybe inventory is the problem. But the number of homes available for sale is not the problem. As of today, inventory levels are up again for the 5th straight month. Over the past month the number of homes on the market for sale in the Jupiter area has jumped by almost 5%. Compared to year ago numbers inventory is higher by 14%. In fact, as of this moment the number of homes that buyers in the Jupiter market have to select from is the highest we have seen since June of 2014. No sir the number of homes available to purchase is not the problem.
Fear? Could fear be part of the problem. Certainly, and there is validity to that. In five days we will have a new President and no doubt this is not what one would call a smooth transition of power. Fear definitely plays a role in what we are seeing.
Affordability? Could the cost of what a home sells for in the Jupiter area be part of the problem. Absolutely, the affordability of housing is a problem everywhere so in Jupiter Florida with a median single family home costing $450,000 it is a huge issue. I read an article this week that said 63% of all Americans could not pay an unexpected bill of $500. To me, that is a very scary statistic. The national debt clock of the United States is about ready to hit $20,000,000,000,000 and that is an even scarier number. So yes affordability is a big, big issue.
Certain market segments are doing better than others so education about the specific details on each individual property are the key to success. Entry level properties in Jupiter are very hard to find and if one hits the market priced well and marketed properly it will sell immediately for top dollar. Inventory of single family homes in Jupiter under $300,000 is at one month. Condos and town homes at this price point are almost as scarce. But what if you own a town home listed above $750,000. Your competition is stiff with current inventory levels far in excess of 3 years.
Paradise Sharks expects sales to pick up over the weeks ahead but the strength of that rebound is in question. If Donald Trump keeps his promise of paying down our national debt “big league” then the economy should be our friend and real estate will continue to prosper here in south Florida. If he continues the spending, we are in trouble.
When doing anything real estate please get informed. Ask lots of questions. If you are in Palm Beach or Martin County, Paradise Sharks would be thrilled to have the opportunity to interview for your business. We will be happy to educate you. It’s what we do and you can reach us anytime at 561.308.0175 or firstname.lastname@example.org.