Absorption rate in Tequesta Down to 5 Month Low
The northern Palm Beach County real estate market continues to be solid, especially for home sellers with lower priced properties. Under the $400,000 benchmark there remains a significant lack of well priced homes from which today’s buyers must choose. These metrics continue to push home prices higher throughout the region.
The Florida Association of Realtors reported last week that sales in Palm Beach County were up 22% in October when compared to sales figures from the previous year. Median sales prices were up 23% during the same period. In Tequesta we saw a 7% decrease in sales during the period and also bucked the trend in median price with a drop to $252,500 in 2012 compared with $350,000.
Everywhere one looks projections are that the bottom of the market remains well behind us and the chances of prices heading south are slim. However, with a large number of foreclosures still ahead there are some obstacles in the way of a complete recovery from the great real estate bubble. But for now ask anyone looking for a home and they will tell you that it is not an easy task finding a good deal as sellers in this market are quickly getting multiple offers when their homes are priced well.
Keep in mind that buyers are still price conscious and not all segments of the market are doing as well as others. Private club communities continue to struggle as do some subdivisions in the luxury home market. In just one Palm Beach Gardens neighborhood we have 7 homes listed starting at $1,300,000 and no sales in the community for over a year. This is even more dramatic when you consider that 35% of all homes in that neighborhood are currently on the market and I know of at least one other homeowner who would like to list their home but figures why bother. So again, there are significant differences in market strength and each property needs to be looked at on it’s own merits.
Every month around this time we take a deeper look at the absorption rate of local markets as this gives us a glimpse as to where the market is heading. The absorption rate is simply the total number of months it would take to absorb all of the existing inventory if sales remained constant based on the most recent 30 day period. After seeing dramatic drops earlier in the year absorption rates have solidified over the past few months. Let’s now take a look and see if there have been any dramatic changes in absorption rates as of November 15th.
Absorption rate in Jupiter –
Absorption rate in Tequesta – 9.81 months down from 10.27
Absorption rate in Palm Beach Gardens – 9.85 months down from 10.02
Absorption Rate in Hobe Sound – 13.18 months down from 13.66
Last month we had two of our reporting municipalities show higher absorption rates with two showing lower rates again showing how things have stagnated a bit. The strength of a market can change quickly and the “average” absorption rate for our four reporting municipalities, after a slight increase last month, showed movement to the downside. Once again it was a slight decrease to 10.325 months from 10.57 months just 30 days earlier but a signal that the market continues to need an increase in quality inventory. We next move in this months report to the absorption rate in Tequesta where we did see a bit of improvement for the 3rd straight month. A slight increase in sales coupled with a small decrease in inventory brought the absorption rate in Tequesta to 9.81 months down from the 10.27 we reported last month. With this decrease we remained well below the 12 month average which sits at 12.16 months. From a “seasonal” perspective we also stayed far below our year ago numbers when we reported 21.6 months.
The only thing for certain is the market constantly evolves and remains interesting for everyone with a stake in South Florida real estate.
Until next month………