Home Sales in North Palm Beach Bring Higher Median Prices in September
A big welcome back to our northern visitors who seem to return earlier and earlier each year. Already you can see the increase in activity; on the roads, at the beach, in the restaurants….everywhere. They return to a real estate market that just keeps getting more and more interesting and confusing. Across the Palm Beach County area we continue to see inventory levels at very low levels in many market segments but our last report showed levels starting to creep up, just slightly.
But the market is changing and the strength we had seen for most of 2012 is starting to sputter. Absorption rates are moving north as sales slow throughout the region. For the first time that I can remember we have seen a monthly decrease in sales in each municipality that we follow and the decline we are reporting here in September is rather significant.
Sellers have raised their prices, especially in the single family home market, and this coupled with declining inventories not only means that buyers have fewer choices but many of the choices they do have are more expensive than the most recent sales in their respective communities. No doubt sales are down and it certainly appears at this point to be a combination of weakening demand and homes that are priced higher than what the market will bear.
With interest rates still hovering at all time lows the cost of money is not an issue but qualifying for loans has never been more difficult. We are also seeing more and more transactions fall through due to appraisal issues. Even banks are listing their foreclosed properties at prices higher that the most recent comparable sales and no doubt frustration has set in with many buyers. Without question the next few months are going to be very critical in seeing just how strong this recovery is or if the overall economy is finally going to derail this train that has been chugging right along.
So let’s take a look at home sales in North Palm Beach and the surrounding communities for the month of September and see what has happened since our last report.
Palm Beach Gardens –
North Palm Beach – down 27%
Hobe Sound – down 76%
For the first time since February we are seeing the volume of home sales in North Palm Beach and the surrounding communities all fall during the month and the percentage declines are not what one hopes for in a market that is still obviously in the recovery mode. In September the median number of sales have decline 20% in our reporting area with the average decline and even more shocking 31%. We next move in this months report with home sales in North Palm Beach where sales volume dropped a significant 27% from August levels. During the month of September a total of 11 North Palm Beach single family homes sold compared with 15 during the previous month. We have to go back four months to find a lower monthly total of home sales in North Palm Beach which is a bearish sign indeed. With this mediocre showing we stay even with the 12 month average sales volume which currently stands at 11. Comparing September to year ago numbers sales were up slightly when home sales in North Palm Beach stood at 10 for the month in 2011.
As we saw sales volume drop in North Palm Beach we saw the heaviest sales activity in sales between $150,001 and $300,000 with 4 sales and 37% of the entire market. If there is one silver lining to this cloud it is solid sales in the luxury home market with 54% of all home sales in North Palm Beach above $500,000. These sales pushed the median sales price to a 6 month high and the second highest total we have seen in 29 months. With a new multi-month high the median sales price came in at $565,000 in September which is well ahead of the 12 month average which sits at $344,833. It also well ahead of the median sales price in September of last year which stood at $181,000. Below are the charts showing the percentage of single family home sales in each category for the month of September as well as median prices over the past 12 months in North Palm Beach.
There is no doubt significant reason for concern about the strength of this recovery moving forward and we hope our northern visitors will enjoy themselves so much during the winter months that a significant impact will be felt in home sales throughout the area. No doubt we do not need too many more months like September.
Until next month…………