North Palm Beach Single Family Home Prices Remains Strong in August
We have torn another page off the 2012 calendar since we looked at home sales in North Palm Beach and the surrounding communities. During that time interest rates have hit another new all time low, inventory levels continue their decline with some municipalities reporting lower inventory for 8 consecutive months and absorption rates have been torn between up and down depending on location.
Perhaps the most important news is what is going on with the overall economy and we all are being inundated with political ads, especially those who live in one of the swing states. No matter where your views lie it is hard to envision either party making the necessary cuts to reverse the spending party and the Fed has announced plans for QE3. With the announcement of $40 billion monthly purchases of mortgage backed securities with no ending date in mind this makes for a program quite different than QE1 and QE2. It basically is an open ended commitment to print money which has raised quite a few eyebrows.
One thing is for certain the plan is designed to keep interest rates low and may push them even lower but it also puts the economy at risk for more inflation; higher prices at the store and the gas pump. The real estate recovery that we are enjoying is also at risk and bears watching closely, very closely.
Home prices are up so far in 2012 and as we predicted back in January it is fairly certain that we finally will have a year with solid gains after 7 years of declines. Prices may have hit bottom but that does not mean all is well in real estate land. Prices are determined in the market as a function of the interplay of supply and demand and over the last few months prices have been pushed up mainly due to a lack of the number of properties for sale more than a significant jump in demand. Fewer homes for buyers to select are causing prices to head higher but sales numbers are having a hard time keeping up and that is why we are getting a mixed bag when evaluating absorption rates. Now let’s take a look at home sales in North Palm Beach and the surrounding communities for the month of August and see what has happened since our last report.
Hobe Sound -
North Palm Beach - up 17%
Tequesta - unchanged
Jupiter - down 2%
Palm Beach Gardens - down 7%
For the third month in a row we are seeing the volume of home sales in North Palm Beach and the surrounding communities jumping all over the board. In August the median number shows no change is sales volume from July but the average is a very respectable jump in volume of 5.8%. There is no doubt that low inventory is having an impact but buyers are still on the prowl for homes. We next move in this months report to North Palm Beach with a 2nd place finish where sales volume jumped 17% from July levels. During the month of August a total of 14 North Palm Beach single family homes sold compared with 12 during the previous month. We still remain well ahead of the 12 month average sales volume which stands at 10.83 which signals more market strength even with declining inventories. Comparing August to year ago numbers sales in 2012 were 27% higher than the 11 homes sold in 2011.
As we saw sales volume surge in North Palm Beach we saw the heaviest sales activity in sales between $300,001 and $500,000 with 5 sales and 36% of the entire market. We also had solid sales the the uber-luxury market with 14% of all monthly sales above $1,000,000. The strength in the luxury home market along with inventory issues pushing prices higher kept the median priced single family home sale in North Palm Beach well above the yearly average which sits at $311,917. Below are the charts showing the percentage of single family home sales in each category for the month of August as well as median prices over the past 12 months in North Palm Beach.
We will continue to closely monitor inventory levels in the coming months as well as demand which by all signs remains very constant. On the front lines the game has drastically changed from negotiating the best price on a number of homes that meet the buyer’s needs to trying to put a number in front of a seller that is acceptable and still may get through the underwriting process with appraisals still a concern.
Always fun keeping a close eye on home sales in North Palm Beach and the surrounding communities..........