Palm Beach Gardens Real Estate Market Slows a Bit

Absorption rate in Palm Beach Gardens increases 25%

The south Florida real estate market has been so hot it defies logic. Much of the national and international news does not paint a rosy picture; interest rates continue to drop and that is because the economic recovery is hardy robust. Investors are looking towards the Fed to see what tools they might have left in the box to pull this economy out of the mud.

But none of that seems to be having a negative effect on the local real estate market. For the last 5 months it has been good news and blue skies. 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. As interest rates entice buyers demand remains very high as inventory levels continue to drop month after month. The interaction of buyers and inventory determine the absorption rate which gives us the number of months it will take to absorb all of the current inventory at the current rate of closings in each local market. So do we continue our reports of good news across the board?

The short answer is no. Real estate sales dropped throughout the region; perhaps because buyers have fewer choices as inventory levels continue to drop but they dropped and it was noticeable. Is it time to say the remarkable recovery we have been experiencing is cooling? Perhaps but this months report certainly shows us that markets change and those changes can be swift. So let’s take a closer look what happened to these absorption rates for the period ending on June 15th.

Jupiter –
Palm Beach Gardens – 8.99 months up from 7.22
Hobe Sound – 11.00 up from 7.13
Tequesta – 11.29 months up from 8.08

Things can change and the “average” absorption rate for our four reporting municipalities jumped to 10.07 months from 7.45 months just 30 days earlier. That is a rather defining 35% increase in 30 days and certainly we need to start watching closely. Palm Beach Gardens weighs in this month as our 2nd place finisher with the highest absorption rate we have seen here in three months. A large drop in sales coupled with another decrease in inventory brought the Palm Beach Gardens absorption rate to 8.99 months a 25% increase from the 7.22 reported the previous month. While we jumped to a three month high we did stay well below our 12-month average which currently sits at 11.0 months. One positive sign from a “seasonal” perspective is we are also better off than our year ago numbers when we reported 9.8 months.

There still seem to be plenty of buyers out seeking the right opportunities while inventory levels, higher prices and financing difficulties are finally showing a significant impact on the market. We still have another 2 to 3 months before our winter visitors return and the market can change dramatically during that time. Consumer spending is down three months months in a row, manufacturing contracted in June for the 1st time in almost three years so we need a spark. How much longer can the south Florida real estate market can shrug off the overall economic picture?

Never saw the sun shining so bright……..

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Tom Priester

After spending years among the top individual performers at one of Palm Beach County’s largest and most successful real estate brokerages, Tom Priester knew there was another way to do real estate. A better way. Real estate services focused on the customer. Like the old days when the customer truly was #1. He tired of listening to why he should be going out to have his customers sign one sided buyers’ brokerage agreements. He tired of hearing how he should be selling customers why paying higher commissions, like 7% and 8%, was to their benefit. He tired of hearing how he should sell his clients on why they should be paying hundreds of dollars in additional “transaction fees”. The business had slid way too far from being focused on the customer. His customer. So he decided the time was right to be different…..by design. To start his own unique boutique real estate firm truly focused on his customers. They will now have access to a process focused on them. Only the best marketing techniques to sell their homes. No cutting corners. Commission structures based on his clients needs not his. Paradise Sharks was born out of Tom’s passion to return this business to the customer. Where it belongs. If you want a real estate experience that benefits you, just give Tom a call at 561 308-0175 or send him an e-mail at tom@paradisesharks.com. You can always pay more and receive less but that just would not make any sense. Would it?

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