Palm Beach Gardens Inventory Level Declines 5% in May
The real estate market in south Florida remains extremely strong with buyers scrambling to find the right opportunities and take advantage of interest rates that keep setting new historical lows. Inventory remains a significant issue with a shortage of well priced homes in many price categories putting measurable upside pressure on the market for the first time in over 7 years.
Some experts are reporting they feel banks are “hoarding” foreclosures and the upswing in housing prices is temporary in nature and will reverse course once much of the “shadow inventory” is released. We keep a very close eye on new bank inventory hitting the market and to date in the northern Palm Beach County area the REO inventory that does hit the market are lower priced properties, typically in poor condition. They continue to be snapped up in short order by the apparently insatiable hunger of the investor market. Few opportunities arise in the single family market priced between $250,0000 and $400,000 where current demand is the highest.
On many fronts “hoarding” of foreclosed properties makes little sense as the cost of holding these properties is substantial and we would need to see significant price increases to have such a strategy work in the banks favor. Adding up property taxes, insurance, association fees, utilities and additional holding costs would easily wipe out any increases that did not far exceed the 4.5% average annual real estate pricing increase which is what we have experienced on average for the past 70 years in the United States. So let’s take a look at where our inventory levels moved as of June 1st.
This report shows our home inventory “power rankings” for the month ending May 31st. These rankings are set up so the top rated municipality will be the one who shows the highest reduction in inventory levels. Since it is these reductions, when coupled with stronger sales, which will move prices higher we want to rank those accordingly. So here are the inventory power rankings are the rankings for the month of April;
#1 Jupiter –
#2 Tequesta –
#2 Hobe Sound –
#4 Palm Beach Gardens – Down 5%
#4 Juno Beach – Down 5%
This current report is in fact again very bullish with each of our reporting municipalities showing a decrease in home inventory levels for the 3rd straight month. Buyers again are faced with fewer choices and much of what is out there is either in poor condition or over-priced. During May in northern Palm Beach County the average inventory level dropped just about 5% adding more upside pricing pressure. This month, in a tie for our 4th place finish, our second report is out of Palm Beach Gardens who weighs in with a 5% decrease in inventory over the last thirty days. As of June 1st total inventory sits at 893 units down 50 from the 943 available on May 1st. With these levels we also find ourselves down 11% from the 12 month average that sits at 1,002 and a very strong reduction of 20% from the 1,116 level we stood at one year ago.
It truly is going to be a very interesting summer…………