Closed Sales Down Sharply As Inventory Surges

Hello Everyone and thank you for watching. This is Gia with Palm Beach Premier Real Estate here in Boca Raton Florida with your 2-minutelocal market report for MARCH 2019.

Subject This Month: Closed Sales Down As Inventory Surges.

So here’s a quick take on the numbers that came out from the Realtors Association of the Palm Beaches

The message from your team here at Palm Beach Premier Real Estate this month is: Closed Sales Down as Inventory Surges.

So let’s take a closer look at the local internal real estate market numbers…. What we’re seeing is the following:

  1. The median sales price of a single family home in Palm Beach Countywas $350,000 …..about the same levels as a year ago.
  2. The number of housing units soldwas down sharply (8.9%) from the same month last year further indicating a market slowdown.
  3. The inventory of homes for sale in Palm Beach County , increased to a 5.7-month supply of houses on the market. So you know, 6 months is considered to be a balanced market. There were 7,959 houses for sale in March, a significant increase of 12% over the same periodone year ago.
  4. Trends were a little different in the condo and townhouse market. The typical Palm Beach County condo that sold in March fetched $175,000
  5. Luxury homes are continuing to take significantly longer to sell.
  6. The amount of time it took to get a contract jumped over 10% versus last year.

So clearly (and as we mentioned last month) the housing market is facing some headwinds and some significant downward pressure in the marketplace:

Once again we want you to consider these 3 important factors:

  1. We have definitely Reached the Top of Real Estate Cycle - 2008-2018; - NOTE: Each RE Cycle is 7-10 years … so it makes sense that we are starting our downward leg
  2. We’ve reached the Top of Debt Cycle - 4 interest rate increases in 2018 (9 in all by the FEDERAL RESERVE) have now created headwinds with consumers highly leveraged; NOTE: Every 1% increase to the mortgage rate impacts buying power by 10% - less qualified people equals less buyers
  3. Buyers have Price Fatigue .... Property Values have increased more than 40%+ since 2008 and yet Wages have simply not kept pace, perhaps 10% - so something has to give [NOT SUSTAINABLE] .... Either people get paid more or prices have to come down....which do you think is more likely?

Looking ahead for the rest of 2019 as it relates to housing:

We can certainly extrapolate some themes here:

First - The average household’s cost to service debt has reached a point at which it will become more difficult and challenging to find buyers who can qualify for a conventional mortgage (FNM, FRE, FHA) –

Second - Housing affordability issues will continue to be a theme going forward

Third – Inventory will continue to Increase, prices will soften and properties will likely sit on the market for extended periods of time

Finally–The effects of the worldwide economic slowdown will be felt here in the USA throughout 2019 and into 2020 and will have a knock-on impact for the housing market

Going forward we will definitely be keeping a continued close watch on prices, interest rates, inventory levels and the number of closed sales.

If you’ve been considering buying or selling - Please give us a call for a confidential consultation at 561.395.8418 or email us at Info@PBPrealestate.com - we’re here to help!

As always we look forward to speaking with you. Thank you again for watching. We’ll see you next time…. J