Homebuyers leaving tax-burdened Northeastern states to purchase Palm Beach real estate, record-low interest rates and pent-up demand fueled last month’s transactions.
MIAMI (PRWEB) September 22, 2020
Palm Beach County total home sales surged double digits in August 2020, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Palm Beach County total home sales jumped 11.3% year-over-year, from 2,707 to 3,014. Palm Beach single-family home sales jumped 15.8% year-over-year, from 1,566 to 1,814. Palm Beach existing condo transactions increased 5.2% year-over-year, from 1,141 to 1,200.
“Homebuyers leaving tax-burdened Northeastern states to purchase Palm Beach real estate, record-low interest rates and pent-up demand fueled last month’s transactions,” JTHS-MIAMI President David Abernathy said.
Pent-up demand has led to an increase in mortgage applications locally and nationally. Mortgage applications to purchase a home rose 3% last week from the previous week and were a stunning 40% higher from a year ago, according to the Sept. 9 Mortgage Bankers Association’s seasonally adjusted index.
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 market was exceptionally strong. Miami 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.
Strong Price Appreciation in Palm Beach
Strong demand coupled with limited supply continue to drive price appreciation in Palm Beach.
Palm Beach County single-family home prices increased 12.4% year-over-year in August 2020, increasing from $355,000 to $399,000. Existing condo prices increased 17.8% year-over-year, from $182,500 to $215,000.
Mid-Market and Luxury Home Sales Jump in August 2020
Palm Beach single-family homes priced between $400K to $600K surged 35.9% year-over-year to 466 transactions in August 2020. Palm Beach existing condo sales priced between $400K to $600K increased 35.7% to 95 transactions.
Palm Beach single-family luxury ($1-million-and-up) transactions jumped 70.6% year-over-year to 186 sales in August 2020. Palm Beach existing condo luxury ($1-million-and-up) sales increased 11.1% year-over-year to 40 transactions.
Record-low interest rates; a record-high S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
Single-Family Home Dollar Volume Increases
Single-family home dollar volume increased 47.1% year-over-year, from $801.7 million to $1.2 billion. Condo dollar volume has stayed even year-over-year at $366.4 million.
According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 2.94% in August, down from 3.02% in July. This gives consumers incredible buying power. The average commitment rate across all of 2019 was 3.94%.
Palm Beach Distressed Sales Stay Low, Reflecting Healthy Market
Only 1.7% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 3% in August 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Palm Beach distressed sales decreased 39%, from 82 to 50.
Short sales and REOs accounted for 0.1% and 1.5% year-over-year, respectively, of total Palm Beach sales in August 2020. Short sale transactions decreased 53.8% year-over-year while REOs decreased 36.2%.
Nationally, distressed sales represented less than 1% of sales in August, equal to July’s percentage, but down from 2% in August 2019.
Palm Beach Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 96.1% in August up 1.3% from 94.9% last year. The median percent of original list price received for existing condominiums was 94.8%, up 0.6% from 94.2% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 35 days, a 27.1% decrease from 48 days last year. The median number of days between the listing date and closing date for condos was 44 days, down 24.1% from 58 days last year.
The median time to sale for single-family homes was 79 days, a 13.2% decrease from 91 days last year. The median number of days to sale for condos was 87 days, a 10.3% decrease from 97 days.
National and State Statistics
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.4% from July to a seasonally-adjusted annual rate of 6.00 million in August. Sales as a whole rose year-over-year, up 10.5% from a year ago (5.43 million in August 2019).
Statewide, closed sales of single-family homes statewide rose 8.8% year-over-year, totaling 29,495, while existing condo-townhouse sales increased 10.3% over August 2019 and totaled 11,100. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
The national median existing-home price for all housing types in August was $310,600, up 11.4% from August 2019 ($278,800), as prices rose in every region. August’s national price increase marks 102 straight months of year-over-year gains.
In August, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 104 months in a row. The statewide median sales price for single-family existing homes was $300,000, up 13.2% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $217,500, up 14.5% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Palm Beach’s Cash Buyers Top National Figure
Palm Beach cash transactions comprised 37.3% of August 2020 total closed sales, compared to 38.9% last year. The national figure for cash buyers is 18%.
Palm Beach’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Palm Beach’s cash purchases as 49.2% of condo closings were made in cash in August 2020 compared to 29.4% of single-family home sales.
Seller’s Market for Palm Beach Real Estate
Inventory of single-family homes decreased 31.9% in August from 6,210 active listings last year to 4,227 last month. Condominium inventory increased 0.9% to 5,321 from 5,275 listings during the same period in 2019.
Months supply of inventory for single-family homes decreased 30.2% to 3 months, which indicates a seller’s market. Inventory for existing condominiums increased 10.6% to 5.2 months, which indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of August decreased 16.9% year-over-year, from 11,485 to 9,548. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Palm Beach single-family homes increased 20.2% to 1,635 from 1,360. New listings of condominiums increased 13.8%, from 1,663 to 1,892.
Nationally, total housing inventory at the end of August totaled 1.49 million units, down 0.7% from July and down 18.6% from one year ago (1.83 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in July and down from the 4.0-month figure recorded in August 2019.
To access August 2020 Palm Beach County Statistical Reports, visit http://www.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