Hobe Sound Absorption Rate Falls to Multi Year Low
The real estate market here in South Florida continues to defy gravity. Sales throughout the north county area were super strong in March with solid double digit gains over February numbers. We will be looking forward to the final numbers from April a few weeks down the road but can tell you at this point they too look rather amazing. Each month at this time we delve into the absorption rate in each of our local communities to see what this metric might tell us about the future direction of the market.
While over the past week or two we are seeing some additional inventory hit the market it seems much of this is from seasonal owners deciding to test the waters since they are heading back home for the summer. Some of these homes are priced well but many are priced on the upper side or reality and so far today’s buyers remain price conscious. Investor activity remains rampant and with a huge percentage of the overall market I can tell you that prices in many investor grade communities have jumped significantly seemingly overnight.
This month it is great to report that all of our reporting municipalities have seen a decrease in the absorption rate over the last month. This means that sales are up, inventory is down and the time required for the market to absorb all of the current inventory is shrinking; all signs pointing to the potential of upward pricing pressure. Here are how things shake out for our April report;
Hobe Sound – 8.78 months down from 10.42
Palm Beach Gardens – 10.8 months down from 12.51
Tequesta – 10.84 months down from 12.11
Jupiter – 10.99 months down from 11.32
Juno Beach – 12 months down from 36.25
Hobe Sound weighs in this month as our 1st place finisher with it’s third straight monthly decrease and a brand new 12 month low. A strong increase in sales coupled with a signifiant decrease in inventory brought the Hobe Sound absorption rate to 8.78 months a strong improvement from the 10.42 reported one month ago. We also fell way below our 12-month average which currently sits at 13,26 months but also slightly better than our year ago numbers when we reported 9.76 months. With our lowest reading of the year there is no doubt the metrics of this market continue to improve. The chart is pointing to a reversal of the trend which is very good news indeed. Interest rates remain very, very low and once again we are at all time, historic record levels.
Overall another strong month of recovery with a nice average decrease in absorption rates throughout the area. With prices and interest rates still at unbelievable levels first time homebuyers are scouring the new listings daily in hopes of landing a great deal. No doubt that purchasing is now a cheaper alternative to renting for most of these buyers.
The question remains will they find their dream home before prices and higher interest rates make it a much more expensive proposition?