Absorption rate in Palm Beach Gardens rises to 12 month average
Real estate sales have slowed, Fannie Mae is countering short sale offers at prices well above market value and pricing many of their assets the same way touting their no appraisal required loans. The market is funky and sorting out where we stand continues to be a most excellent, and intriguing, adventure.
We recently reported September sales figures in the Northern Palm Beach County region and it was certainly not a robust month. The median monthly decline in sales came in at 20% which is significant indeed. There are still buyers out there, many of them more than frustrated, but quantifying demand without sales is impossible to do. Is the higher asking prices of properties the main culprit, is it the overall economy starting to head off what has been a remarkable recovery so far this year?
With 3.5 million foreclosures over the past four years projections are for another 3 million to be heading our way over the next few years. There are many home owners who would love to sell but are unable to do so as they owe more than the property will bring in today’s market. The looming expiration of the Mortgage Relief Act scheduled to end the last day of December is just one issue that will effect our market in the coming months.
Every month around this time we take a deeper look at the absorption rate of local markets as this gives us a glimpse as to where the market is heading. The absorption rate is simply the total number of months it would take to absorb all of the existing inventory if sales remained constant based on the most recent 30 day period. Absorption rates had been declining steadily for about six months but most recently have spiked a bit to the upside. After looking at the September sales numbers we need some positive news so let’s see where we stand today.
Absorption rate in Jupiter -
Absorption rate in Palm Beach Gardens - 10.45 months up from 9.35
Absorption rate Teqesta - 10.68 months down from 11.82
Absorption Rate in Hobe Sound - 13.66 months up from 12.03
Last month we had three of our reporting municipalities show higher absorption rates which is a bearish sign and with sales lagging and inventory pretty much holding steady we would expect further declines in this period. The strength of a market can change quickly and the “average” absorption rate for our four reporting municipalities, after a small decline last month, showed movement to the upside. No doubt it was a slight increase to 10.855 months from 10.535 months just 30 days earlier but a signal that the market continues to languish. We next move in this months report to the absorption rate in Palm Beach Gardens which increased for the second straight month and a sign of the market continuing to languish. A significant decrease in sales coupled with a slight decrease in inventory brought the absorption rate in Palm Beach Gardens to 10.45 months up from the 9.35 we reported last month. It also marks the first time in 6 months that the absorption rate in Palm Beach Gardens has exceeded 10 months. With this increase we move into a tie with the 12 month average which also sits at 10.45 months. From a “seasonal” perspective we also stayed just below our year ago numbers when we reported 11.16 months.
No doubt the only constant is change and knowing these numbers and how these trends affect any real estate decision you may be contemplating is critical.
Until next month.........
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