Jupiter home sales show surprising strength in August
The first half of August is not the time of year we expect an increase in pending home sales in the Northern Palm Beaches. Last year, they were down 3%, In 2016, they were down 12%. In 2015, 7% lower. Down 14% in 2014. You get the picture, but somehow this year, home buyers came out the first couple weeks of the month and pushed our pending home sale index higher by 2%. Not a huge rise, but when you consider what usually happens, a very impressive performance.
It may be that demand is pent up and buyers were waiting for a pull back in prices that we have seen over the past couple months. It may be that interest rates have been down for the past two weeks and buyers are thinking this trend will not last much longer. It may be that pending home sales on August 1st were 18% lower than the previous year and the market is just catching up. It may be that almost 10% of all single family home sellers in Jupiter have lowered their list prices over the past couple weeks and seller expectations are moving closer to market reality. It may be a combination of all these things and a dusting of good fortune but improved sales is not what anyone expected.
One thing that was not pushing sales higher were inventory levels, which fell again for the 6th straight month. The number of homes available for buyers to consider is now lower than it’s been for 11 months. Options are limited and prices are still high, even though they have pulled back a bit over the past 2 months in both the single family and condominium market segments.
Affordability remains a key issue for Jupiter home sales as we move closer to the pilgrimage of winter visitors who provide an annual boost in volume. They start buying condos, at the highest levels of the year, in mid January while single family home sales pick up steam about a month later. Will the economy stay strong and push home prices higher in the Jupiter area is the real question and at this point it would be surprising to see any strong movements to the upside.
But, surprises happen, and with new tax laws limiting deductions for state taxes, many high income tax state residents are moving to states like Florida that have no income tax. In cash strapped locations, like New York and New Jersey, state tax rates that are approaching 10% and no longer deductible on federal returns, have many thinking about a relocation to Florida. And while this trend is without question significant, not sure the volume of buyers is large enough to offset the reality that more and more middle class buyers continue to get priced out of markets like Jupiter where a median priced single family home will set you back about a half a million dollars.
In an article this morning, in USA Today, the Miami-Fort Lauderdale-West Palm Beach area is listed as one of the top 20 locations in the country where high home prices are forcing many to lose the ability to purchase a home. With Jupiter having the highest home prices of the 10 largest cities in Palm Beach County, affordability is a huge problem.
With the median list price of a single family home in Jupiter $189,000 higher than the median sales price, it is easy to see that something needs to give. Demand either strengthens considerably or prices do not appear to have much room to run.
It is going to be another interesting month here in the trenches, so remember, if you are planning on doing anything with real estate you truly should interview three brokers and ask a lot of questions. Find out what their costs are as well as digging into their suitability of helping you meet your goals. Paradise Sharks loves to interview and you can contact us anytime at 561.308.0175 or firstname.lastname@example.org.