Palm Beach Gardens Absorption Rate Improves by 15%
We continue to see positive news from the local real estate markets with an increase in pending sales and higher median prices reported throughout the region in April. Momentum seems to be gathering steam with interest rates continuing to slide and inventory levels continuing to shrink. But there are still dark clouds out on the horizon and anyone saying we are out of the woods is ignoring the high level of mortgages in foreclosure trouble still on the table. Combined with general economic news that hardly paints a robust business climate we continue to watch the various metrics surrounding the local real estate market to give those interested a peak of what might be heading their way.
Each month around this time we bring you updated numbers for the absorption rate in the Northern Palm Beach County area. These numbers, and especially the trend we see in these numbers, are critical when understanding how inventory and demand interact and what role they will have in future price movements. Since the first of the year we have seen significant reductions in the absorption rates and during that time we have seen the highest upside pricing pressure we have seen for over 6 years but will that continue as we head out of the spring buying season into the summer months?
This month we actually saw the absorption rates increase in two municipalities while the other three showed continuing improvement. on the front lines a lot of what we deal with is gut feeling and over the past week I have seen some deals that did not draw the activity I thought they would a few weeks earlier. Time will tell but let’s take a deeper look at the absorption rates for May;
Juno Beach –
Palm Beach Gardens – 8.95 Months down from 10.56
Hobe Sound – 10.2 months up from 8.62
Tequesta – 11.07 months up from 9.88
Palm Beach Gardens weighs in this month with very good news as our 3rd place finisher with it’s fifth straight month without an increase and a brand new annual low. A significant increase in sales coupled with a slight decrease in inventory brought the Palm Beach Gardens absorption rate to 8.95 months a 15% decrease from the 10.56 reported one month ago. We did stay well below our 12-month average which currently sits at 12.39 months and also below our year ago numbers when we reported 11.46 months. This was a very bullish month and another sign that we may finally be turning the corner with real estate pricing in the South Florida market.
We are every lucky to live in an area where vacation homes make up a significant percentage of our real estate transactions. With prices still at very attractive levels, inventory levels that continue to shrink and interest rates that continue to amaze the sense or urgency has returned to the market. Being able to clearly identify properties that meet a buyers needs and then being able to react very quickly is more important than ever.
Will the buzz of a market that is heating up continue to resonate…………