Is a 58% Drop in Sales Really Good News?
I am the luckiest guy in the world. Not only do I have an incredible family and wonderful friends but I live in Paradise running around in shorts and flip flops working in the best industry in the world. And I get to do it during the craziest real estate market ever encountered and it is always interesting and challenging. I am honored to serve on the Agent Leadership Council of Keller Williams Realty (the BEST real estate firm in the world) and next week we head off to our family reunion where thousands of the best agents meet to learn more about the current status of our industry.
And the timing couldn’t be better as we are seeing metrics that I have never witnessed before. January sales figures in the northern Palm Beach County region point to a turning point that will continue to play itself out through the year. Every month at this time we report where sales came in the previous month and this month in our 6 reporting categories we have one that reported a 58% decrease in sales and one that reported a 350% increase. How interesting is that? Very interesting. So without further adieu we bring you the North County Sales Power Rankings;
#1 Juno Beach
#2 Tequesta
#3 Hobe Sound
#4 Jupiter
#5 North Palm Beach
#6 Palm Beach Gardens - down 58%
Yes, I did say that sales numbers ranged from a decrease of 58% to an increase of 350% and now I am going to tell you this is great news for the continued recovery that seems to be gathering strength. How can a decrease of 58% be great news? Inventory is the answer and the main reason sales have stalled is a lack of inventory with a price and condition that buyers will react to. Believe me the buyers are out there ready to act on interest rates that can only be described at phenomenal. But the homes they are seeking aren’t out there. Sellers are asking higher prices for quality homes and either inventory with prices to match buyers expectations increases which is unlikely, or sellers will lower prices which is more likely or we continue this stalemate between the two parties to a transaction. Appraisals will be key as even if a buyer wants to pay a higher price and are borrowing money will the appraisal justify the price for the lender? Didn’t I tell you I was lucky?
This month’s 6th place finisher in our sales power rankings are single family home sales in Palm Beach Gardens that decreased an amazing 58% from December sales numbers. Remember the inventory we discussed; as of February 1st in Palm Beach Gardens we had total inventory of 1,031 units compared to 1,302 we had last year at the same time a drop of 21%. In January we had just 31 sales which was a huge decrease of 43 from the 74 sales we had in December. With these numbers we fell far below the 12 month average which stands at 66.16 and also well below the 66 homes sold in January of last year. I have been keeping these records for well over two years and this was the lowest sales number we have seen far eclipsing the previous low of 46 in January of 2010.
While sales were low we did see a good balance of homes selling in all price categories with great strength in the ultra luxury market over $1,000,000 which weighed in with 5 sales or 13% of the market. Still the majority of sales equaling 54% of the overall market fell between $150,000 and $500,000. Higher inventory levels in the luxury home market above $500,000 show the buyers are out there with a total of 15 sales above this plateau.The chart below shows the percentage of sales by price category for the month of January.
With the strong showing in sales above $500,000 and sales across the board in all price ranges we would expect to see an increase in the median price realized and that is what we got. In fact we have a new 12-month high of $420,000 which naturally is well ahead of the 12 month average which sits at $338,333. We also were well ahead of the median price sale of $332,500 we saw in January of last year. Are higher prices coming your way? Could be so keep tuned in and as always we will bring you the most accurate market information as it is available. The chart below shows median prices on a monthly basis over the previous 12 month period.
This crazy world of real estate is what I thrive on and nothing gives me more satisfaction than assisting others in finding that perfect home and negotiating the best pricing and terms or listing and marketing their current home to achieve the best results. Your free consultation is but a phone call away so if we can be of service in any way to you, your friends, family or colleagues please do not hesitate to give me a call. Easily reached at 561 308-1075 or via e-mail at tom@tompriester.com we are here to assist in any way that we can.
Always at Your Service,
Tom Priester e-PRO
"Results Driven Real Estate"
Keller Williams Realty
561 308-0175
tom@tompriester.com
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