Palm Beach Housing Inventory Drops 34%

Palm Beach Housing Inventory Drops 34%

A recent report issued by the real estate analysis firm Zillow measured home availability in the Palm Beach housing market, which has decreased by 34% in September year-over-year. The inventory of luxury real estate in Palm Beach decreased by the greatest amount, although the diminished supply of single-family homes is affecting first-time home buyers the most.

"First-time homebuyers are being squeezed out of the market by falling inventory and the rapid influx of investors looking to by basic homes to rent out to the growing population of people who have recently been foreclosed upon," said Zillow Chief Economist Stan Humphries in a press release. "Investors are paying in cash and can close sooner, which is more favorable to banks and homeowners looking to sell." An increase in demand for rental properties in South Florida is also attracting investors to the market, and construction of apartment buildings and condominiums in the area has significantly increased.

According to the analysis by Zillow, the supply of Palm Beach luxury homes dropped 34.4% over the course of last year, and the supply of homes in the most affordable price range followed a similar trend, with a 33% drop in inventory. The Realtors Association of the Palm Beaches reported that the overall inventory of single-family homes in Palm Beach dropped by a dramatic 57% from August 2011, which has put the biggest strain on potential first-time buyers in Southern Florida. The decrease in available homes is thought to drive up prices, which is making buyers all the more eager to buy now while hot deals are still on the market. Prices are slowly trending upward, although they haven’t reached the levels they maintained prior to the housing crash.

Yet, the drop in Florida housing inventory isn't the largest nationwide. In California, the metro regions of San Diego and Los Angeles experienced 45% drops in inventory of the most affordable homes, and the amount of available homes for sale in Sacramento decreased by 55%. As the economy continues to recover, the housing market is one of industries taking the longest to regain stability since many home owners now no longer have the necessary credit to take advantage of low interest rates available for new investors.

Florida's foreclosure activity will alleviate some of the strain on the housing market inventory, although real estate experts are concerned that the additional foreclosed properties on the market may cause prices to crash. However, as banks are allowing more short sales, prices may stabilize since short sale properties typically sell for higher amounts than foreclosures.

Our team of Palm Beach real estate experts is excited to show you what Palm Beach real estate has to offer. Please contact us right away if you’d like to learn about Palm Beach homes or see one of the properties listed on our site in person.

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