February starts with strong home sales for the Jupiter area
Season is here. The beaches are busy. The hottest restaurants are jammed and there are plenty of smiles as one travels around the Northern Palm Beaches. The weather is spectacular and it’s the time of year when pending home sales are supposed to surge. With interest rates up for the 6th straight week, to the highest levels we have seen in 4 years, and a stock market that has been on a wild two week roller coaster ride you have to realize that economic factors are going to play a huge role in this years’ real estate market.
So far, pending home sales in the Jupiter area, appear unaffected by these outside influences. As of February 15th, pending home sales in the area are up by an exceptionally strong 36% over the past month. That is among the strongest increases we have ever seen and a sign that people are indeed buying homes. The number of homes currently under contract in the Jupiter area is slightly ahead of year ago numbers.
However, median prices of both condominiums and single family homes are essentially unchanged over the past 9 months. Single family home prices are up significantly for the 3rd straight month but that rise follows on the heels of an equally significant 3 month slide between August and October of last year. We do anticipate the strong increases in pending home sales will be pushing prices a bit higher, but right now not by anything that looks like a surprising amount.
Inventory levels have risen for the 5th straight month, but remain a full 11% below where they stood one year ago. Looking at historical patterns, we are at a place when we expect inventory levels to hold steady at best, but are more likely to fall in the weeks and months ahead. Still, many sellers are priced too high and over the past week, 7% of all Jupiter single family home sellers have reduced their list prices. If we could get one thing clear in every sellers’ mind before listing their home, it is that over pricing a new listing is usually about the worse mistake you can make. Period and exclamation point.
There is also a huge disconnect in what type of home is selling and what types of homes are available. Consider that over the past 12 months, the median sales price of a single family home in Jupiter is $480,000, which is a substantial number. Not only is a median sales price at this level extremely high for anywhere in Florida, it is among the highest in the United States. But guess what the average list price of a home in Jupiter is at this moment? $789,000 or a full 64% above the median sales price. That, my friends, is a huge disconnect and a real problem in a market where inventory and affordability are key concerns.
We are also very concerned how the new tax laws will effect sales at the upper end of this market with tax bills above $10,000 no longer tax deductible. In this market, that is almost 50% of all sales. Ask around, and dig a little deeper, and you will find that yes sales have been steady but we are not seeing any great amount of euphoria it today’s market. Buyers must be very well positioned to act immediately on the best new opportunities, under the $500,000 level, as they will go fast if the sellers have a realistic marketing and pricing strategy. Those sellers that do not understand the metrics surrounding their property and keep close tabs on where this market is heading may be more than a bit disappointed.
Paradise Sharks cannot stress enough, the need for both buyers and sellers in this market to be fully educated and making informed decisions. The risks are high in a market that has the ability to move with exceptional speed. Don’t go it alone, or with an inexperienced broker, and by all means if we can ever answer any of your questions please feel free to contact us at firstname.lastname@example.org or 561.308.0175.