Palm Beach County Home Prices Rise in 2Q Due to Strong Demand and Limited Supply

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Palm Beach County home prices increased year-over-year in 2Q 2020, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

JTHS-MIAMI President David Abernathy

JTHS-MIAMI President David Abernathy

The robust fundamentals of the South Florida housing market in the second quarter are already minimizing the impact of COVID-19 on sales activity and demand.

Palm Beach County home prices increased year-over-year in 2Q 2020, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

Palm Beach County single-family home prices increased 4.2% year-over-year, from $355,000 to $370,000. Palm Beach County existing condo prices rose 7.2%, from $186,500 to $200,000.

“The robust fundamentals of the South Florida housing market in the second quarter are already minimizing the impact of COVID-19 on sales activity and demand,” JTHS-MIAMI President David Abernathy said.

Pending sales began surging in mid-April and are stronger than they were before the COVID-19 stay home orders. New pending sales for Palm Beach County single-family homes decreased 14.2% year-over-year, from 5,746 to 4,932. New pending sales for Palm Beach County condos decreased 26.6% year-over-year, from 4,241 to 3,111.

Mortgage applications, another indicator of future sales, are on the rise in South Florida and nationally, as the South Florida region continues to see additional homebuying interest from the Northeast. The Mortgage Bankers Association (MBA) reported that mortgage applications rose by 6.8% this week.

The COVID-19 situation has accelerated the trend of homebuyers from New York and cold weather and tax-burdened Northeastern states searching and purchasing homes in South Florida.

Before the COVID-19 situation, the Palm Beach County market was strong. Palm Beach real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax burdened states, high consumer confidence and a strong job market.

Total Palm Beach County Sales Declined in 2Q 2020
Palm Beach County total home sales decreased 34.5% year-over-year, from 9,279 to 6,055. Palm Beach County single-family home sales fell 30.6%, from 5,276 to 3,660. Palm Beach County condo sales declined 40.2%, from 4,003 to 2,395.

Palm Beach County single-family home dollar volume declined 20.9%, from $3 billion to $2.3 billion. Palm Beach County condo dollar volume decreased 34% to $788.5 million.

Non-distressed sales comprised about 96.1% of all closed residential sales in 2Q 2020 vs. 96.3% in 2Q 2019. Only 2.9% of all closed residential sales in Palm Beach were distressed in 2Q 2020,
including REO (bank-owned properties) and short sales, compared to 2.7% in 2Q 2019.

Short sales and REOs accounted for 0.5% and 2.4%, respectively, of total Palm Beach County sales in 2Q 2020. Short sale transactions decreased 44.4% year-over-year while REOs fell 26.1%.

Lower mortgage rates made home purchases more affordable in 2020. The effective 30-year fixed mortgage rate averaged 3.29% in the second quarter of 2020, down from one year ago (4.08%) and from the first quarter of 2020 (3.57%).

Hot Markets Overview Reveals Strong Demand and Limited Supply in Many Local Areas
Months’ supply of inventory is a strong indicator of real estate activity. Top Palm Beach County neighborhoods with the lowest months of supply of inventory (at least 100 new pending sales) in 2Q 2020:

Single-Family Homes
1. The Acreage, a north Palm Beach community west of West Palm Beach, had 1.6 months supply
2. Boynton Beach, a southeastern Palm Beach community north of Delray Beach, had 2.1 months supply
3. Royal Palm Beach, a north Palm Beach community north of Wellington, had 2.1 months supply
4. Lake Worth, a north Palm Beach community south of West Palm Beach, had 2.7 months supply
5. Jupiter, a north Palm Beach town north of Palm Beach Gardens, had 2.9 months supply

Condominiums
1. Greenacres, a north Palm Beach community west of Lake Worth, had 2.7 months supply
2. Jupiter, a north Palm Beach town north of Palm Beach Gardens, had 3.6 months supply
3. Palm Beach Gardens, a north Palm Beach community north of West Palm Beach, had 3.8 months supply
4. Boynton Beach, a southeastern Palm Beach community north of Delray Beach, had 4.4 months supply
5. Delray Beach, a south Palm Beach community north of Boca Raton, had 6.0 months supply

State and National Stats in 2Q 2020
Closed sales of single-family homes statewide totaled 68,675 in 2Q 2020, down 19.2% from the 2Q 2019 level; closed sales of condo-townhouse properties totaled 22,571, down 33.9% compared to 2Q 2019. Closed sales typically occur 30 to 90 days after sales contracts are written.

The statewide median sales price for single-family existing homes in 2Q 2020 was $277,500, up 4.7% from the same time a year ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $207,000, up 6.2% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

The national median existing single-family home price in the second quarter of 2020 was $291,300. On a year-over-year basis, this is a 4.2% climb, however, it is still a slower pace of appreciation compared to the pre-pandemic rate of 7.7% in the first quarter.

Buyer’s Market for Single-Family Homes and Condos
At the current sales pace, the number of active listings represents 3.7 months of inventory for single-family homes and 5.8 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.

Palm Beach real estate had 10,820 active listings in 2Q 2020, a 13.1% decrease from the 12,444 listings at the same time last year. The inventory for single-family homes decreased 26.1%, from 6,753 to 4,989. Palm Beach existing condo inventory increased 2.5%, from 5,691 to 5,831.

Palm Beach Homes Selling Close to List Price
The median percent of original list price received was 95.3% for single-family homes and 93.8% for condos in 2Q 2020.

The median time to contract for single-family home listings was 45 days, a 15.1% decrease from 53 days in 2Q 2019. The median time to contract for existing condos was 60 days, a 7.1% increase from 56 days in 2Q 2019.

The median time to sale for single-family homes decreased 5.2%, from 97 days to 92. The median time to sale for existing condos increased 4.1%, from 97 to 101.

Palm Beach Cash Sales Almost Double National Figure
Cash sales represented 37.9% of Palm Beach closed sales in 2Q 2020, compared to 32.4% in 1Q 2019.

About 20 percent of U.S. home properties are made in cash, according to the latest NAR statistics. The high percentage of cash buyers reflects South Florida’s top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash.

Cash sales accounted for 50.8% of all Palm Beach existing condo sales and 29.4% of single-family transactions.

2Q 2020 Palm Beach County Statistical Reports — visit SFMarketIntel.com

Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.

About the MIAMI Association of Realtors
The MIAMI Association of Realtors was chartered by the National Association of Realtors in 1920 and is celebrating 100 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward-MIAMI Association of Realtors, the Jupiter Tequesta Hobe Sound (JTHS-MIAMI) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents 52,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 223 international organizations worldwide. MIAMI’s official website is http://www.MiamiRealtors.com

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Lynda Fernandez
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