Palm Beach Home Sales Contribute to Shrinking Inventory
Palm Beach Home Sales Contribute to Shrinking Inventory
The increase in Palm Beach home sales has contributed to the significant turnaround in toward recovery for the local housing market; however, the recent flurry of transactions has dramatically cut into the inventory of low-to medium-priced properties available in South Florida. In part, low mortgage rates are encouraging first-time buyers to enter the housing market while prices are low, but real estate experts predict that the increase in demand for Palm Beach housing is likely to push prices even higher throughout the next few years.
A report issued by the Realtors Association of the Palm Beaches recently revealed that single-family home sales were up 22% in October year-over-year, and that the median sales price of Palm Beach real estate has increased to $222,500, up 23% from last year.
According to local real estate professionals, Palm Beach home buyers are now opting to save up for a higher down payment instead of trying to find an affordable home on the market. Other potential buyers are turning to home rentals instead of attempting to buy real estate, although the demand for rental properties in the Palm Beach area is also on the rise.
Although the inventory of Palm Beach homes has dropped by 55% from last year, real estate analysts report that there is approximately 5.2 months' supply of homes on the Palm Beach housing market. In general, a 5.5 months' supply is average for a balanced market, which means the Palm Beach housing market is finally working its way toward stability.
A positive effect of increasing home values throughout the Palm Beach area is that it's now easier to build home equity. The chief economist for the National Association of Realtors said that the increase in home values has created a $768 increase in home equity in the last year alone; if the increase in prices continues, it may be possible to see a $1 trillion gain next year.
A sharp decrease in Palm Beach short sales is one of the largest contributing factors to the housing shortage. Banks are now much more likely to offer the option of short sales now that the National Mortgage Settlement legislation has taken effect, but distressed properties are still becoming less common. Investors are quick to pounce on available distressed properties by offering cash, and traditional buyers who are struggling to find housing in Palm Beach at an affordable price point are equally quick to bid on distressed homes on the market. Overall, the lack of short sales and foreclosures on the market signals positive news for the housing market, although buyers feeling the immediate effects are concerned with finding affordable housing. Since the demand for rental properties is also on the rise, Palm Beach city officials are striving to create more affordable housing options for low-income families and local students.
Please don't hesitate to contact us if you're interested in learning more about the most recent Palm Beach real estate trends. We'd be more than happy to keep you informed of the latest market news while showing you some of the best Palm Beach homes on the market today.
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