Driven by waves of Northeast and West Coast buyers
Palm Beach County real estate broke its record for the most home sales in just 11 months, according to the Miami Association of Realtors, as the November 2021 sales total pushed the market above the former standard.
Total Palm Beach County home sales fell 0.6% year-over-year in November 2021 from 2,810 sales to 2,793 due to lack of inventory and Covid19 comps (the statistics are compared to last year’s major rebound demand). Single-family home transactions in Palm Beach fell 2.7% from 1,533 to 1,491. Existing condo sales in Palm Beach rose 2% from 1,277 to 1,302.
Year-to-date, Palm Beach County recorded 34,385 existing home sales in 11 months, surpassing the previous annual record of 32,083 transactions in all of 2015.
“Palm Beach continues to attract home buyers from high-density, high-tax markets such as New York and California,” said JTHS-MIAMI President Bill Mate. “If you can work from anywhere with the expansion of remote working, then why not work in a business-friendly region with amazing weather and lifestyle?”
Palm Beach’s luxury market is in demand as buyers from the northeast and west coast move to the mega region
Palm Beach County luxury single-family transactions ($1 million and above) increased 18.7% year-over-year to 235 sales in November 2021. Sales of existing luxury condos in Palm Beach ($1M+) grew 14.1% year-over-year to 81 deals.
There is 3 months supply in luxury single family homes; 3.1 month supply of luxury condos. The Luxury Month supply continues to decline across all property types, month-over-month and year-over-year.
Low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to buy in Florida (no state income tax); and work-from-home and distance learning policies have all combined to create a robust market for luxury single-family properties.
With increasing global vaccinations and unstable political situations around the world, South Florida is experiencing an increase in foreign buyers. Global buyers come here for the vaccine and the purchase of goods.
Vaccinated foreigners have been allowed to resume travel to the United States from Nov. 8, which will drive more international investment into South Florida – the No. 1 destination for foreign buyers. Global buyers buy in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures.
Palm Beach single-family homes priced between $400,000 and $600,000 rose 15.2% year-over-year to 485 transactions in November 2021. Existing condo sales in Palm Beach priced between $400,000 and $600,000 rose 49% to 152 transactions.
Low Supply/High Demand Market for Palm Beach Real Estate
There is always a seasonal drop in inventory in the fall and winter. More inventory is expected to hit the market by spring 2022 as potential home sellers become more comfortable listing and showing their homes. The drop in the number of homeowners in mortgage forbearance will also lead to more inventory. Expectations of higher interest rates should continue to drive demand in the first quarter of 2022.
New single-family home listings in Palm Beach fell 14.7% to 1,471 from 1,793. New condominium listings fell 4.1% to 1,568 from 1,504.
Single-family home inventory fell 48.6% year-over-year in November 2021, from 3,940 active listings last year to 2,027 last month. Condominium inventory was down 65.8% year over year to 1,846 from 5,403 listings during the same period in 2020.
Monthly inventory supply has been declining since July 2019 for single-family homes, reflecting strong demand. The monthly supply of single-family home inventory fell 55.6% to 1.2 months, indicating a seller’s market. Existing condo inventory was down 75.5% at 1.2 months, indicating a seller’s market. A balanced market between buyers and sellers offers between six and nine months of supply.
Total active listings at the end of November 2021 decreased 58.5% year over year, from 9,343 to 3,873.
Nationally, total housing inventory at the end of November stood at 1.11 million units, down 9.8% from October and 13.3% from a year ago. at one year (1.28 million). Unsold inventory sits at 2.1 months supply at the current selling rate, down from both the previous month and a year ago.
Palm Beach homeowners’ home equity continues to rise as many pay lower mortgage payments
With interest rates still at record highs, many South Florida homeowners have refinanced their home loans. So not only are many homeowners now paying lower mortgage payments; they do so while their wealth (real estate equity) has increased significantly. Home equity can be leveraged for renovations, college loans and more.
Palm Beach County median single-family home prices increased 22% year-over-year in November 2021, from $418,000 to $510,000. Median prices for existing condominiums rose 19.4% year over year, from $220,000 to $262,750.
The larger share of luxury sales in Palm Beach in 2021 compared to a year ago partly explains the sharp year-over-year increase in median prices.
Rising median prices are trending nationwide as record high mortgage rates and increased availability of remote work and education have accelerated housing demand. Low inventory relative to high demand leads to higher prices.
Lower mortgage rates make buying a home more affordable. According to Freddie Mac, the average commitment rate for a conventional 30-year fixed-rate mortgage was 3.07 in November, which is the rate for October. The average engagement rate over the whole of 2020 was 3.11%.
NAR Chief Economist Lawrence Yun expects the 30-year fixed mortgage rate to drop to 3.7% by the end of 2022. It would still be below the pre-pandemic rate of 4 %.
Should mortgage rates resume their ascent, house price growth should slow accordingly. As more sellers list properties in 2021 and 2022, rising inventory should dampen median price growth.
South Florida remains a bargain compared to other global cities. In Miami, $1 million can net home buyers 85 square meters of prime property, according to Knight Frank’s The Wealth Report 2021. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer much less prime land for $1 million.
Palm Beach’s dollar volume totals $1.99 billion, showing the impact of housing on the local economy
While other industries have struggled over the past year, housing has boosted the national and local economy. For every two houses sold in the United States, one job is created. Palm Beach’s dollar volume showcases the impact housing has on the local economy.
Palm Beach’s total dollar volume totaled $1.99 billion in November 2021. Single-family home dollar volume increased 23.1% year-over-year from $1.2 billion to dollars to $1.4 billion. Condominium dollar volume increased 16.6% year over year, from $488.6 million to $569.6 million.
Palm Beach’s struggling sales continue to fall, reflecting a healthy market
Only 0.7% of all residential sales completed in Palm Beach were in trouble last month, including REOs (bank-owned properties) and short sales, compared to 1.6% in November 2020.
Palm Beach’s total distressed sales fell 54.5% year-over-year in November 2021, from 44 to 20. Short sales and REOs were down 0.3% and 0.5, respectively. % year-over-year of total Palm Beach sales in November 2021. Short sale transactions were down 30% year-over-year, while REOs were down 61.8% .
Nationally, distressed sales accounted for less than 1% of sales in November 2021, equal to the percentage in November 2020.
Palm Beach Real Estate Attracts Multiple Offers, Buyers Surpass List Price
The median percentage of the initial list price received for single-family homes was 99.2% in November 2021, up 2.6% from 96.7% last year. The median percentage of the initial list price received for existing condominiums was 97.9%, up 2.8% from 95.2% last year.
The median number of days from listing to contract date for sales of single-family homes in Palm Beach was 13 days, down 45.8% from 24 days last year. The median time to sell for single-family homes was 55 days, down 19.1% from 68 days last year.
The median number of days from listing date to contract date for condominiums was 15 days, down 64.3% from 42 days. The median number of days to sell for condos was 56 days, a decrease of 34.1% from 85 days.
Palm Beach cash sales more than double the national figure in November 2021
Cash sales accounted for 49.8% of sales completed in Palm Beach in November 2021, compared to 40.8% in November 2020. About 24% of home sales in the United States are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects South Florida’s prominent position as the preeminent U.S. real estate market for overseas buyers, who tend to buy with cash as well as some leaving larger U.S. markets. expensive who can buy more with their profits from real estate sales.
Cash sales accounted for 59.2% of all existing condo sales in Palm Beach and 41.5% of single-family transactions.