Home Sales in North Palm Beach Fall 75% in December
Where does the time go? This Friday we flip another page on the calendar and it’s officially February. It also marks the halfway point for the “season” here in South Florida. Not only has the weather been warm for our northern visitors but so has the local real estate market.
Our last few articles have been full of good news from significant drops in home inventory to downward pressure in absorption rates. Everything is pointing towards fewer choices for buyers coupled with higher home prices. Jupiter, along with the rest of South Florida, is truly a “hot” market as buyers from all over the world flock to the area looking for their own piece of paradise in the Florida sunshine. Median home pricing nationwide, according to the National Association of Homebuilders was us 10.1% from year ago numbers. Palm Beach County has experienced a 20.9% increase in median home pricing during the same period. Locally many neighborhoods, product types and communities have done better, much better.
Everyone has an opinion on the uber-luxury market of homes with sales prices over the magic million dollar threshold. The strength we experienced in this market is astounding when comparing sales in December to those of a year ago. Some experts point to sellers wanting to protect their gains prior to a widely expected increase in the capital gains tax which will increase the tax due on home profits from 15% to 20%. Also, on their radar screen is the 3.8% Medicare tax that was brought to us through the Affordable Care Act. It is important to note this tax will only affect couples making in excess of $250,000. The number of sales in this category in Jupiter, Palm Beach Gardens and Tequesta during December was truly stupendous. In fact, sales of $1,000,000+ homes jumped 360%, I told you it was stupendous! Back in December 2011 only 5 homes closed above this benchmark and last month that number jumped to 24. I am not sure that tax consequences alone account for this jump as many buyers are jumping in now that they believe the bottom of the market is in the rear view mirror.
Last month at this time we reported a strong month of sales after a period where inventories had increased slightly over the previous 3 months. In December, buyers were faced with lower levels of available homes and it is time to look under the covers and see how the various metrics affected local real estate sales in December. So let’s take a look at home sales in North Palm Beach and the surrounding communities for the month of December and see what has happened since our last report.
Hobe Sound –
Palm Beach Gardens –
North Palm Beach – down 75%
If we were playing a board game the markers would be all over the place and December sales can only be described as wild. The average number of sales from our reporting municipalities fell 6.4% from the previous month while the median sales level dropped 1%. On the surface those numbers look pretty good when compared to November sales that were very, very strong. But the spread was quite dramatic with some areas showing strong increases while others suffered significant declines.
We start this months report with home sales in North Palm Beach where volume dropped precipitously to a new multi-year low. During the month of December a total of 4 North Palm Beach single family homes sold compared with 16 during the previous month. This is a huge 75% decline and we have to go all the way back to February 2010 to find a month with slower home sales in North Palm Beach. With this showing we fell far behind the 12 month average sales volume which currently stands at 10.92. On a “seasonal” note home sales in North Palm Beach also ended up far below the 13 sales we had in the same month in 2011.
As we saw sales volume decrease in North Palm Beach we saw the heaviest sales activity in homes priced between $300,001 and $500,000 with 2 sales representing 50% of the market. With these sales the median sales price still increased from month ago numbers to $310,500. We did however stay just below the 12 month average which stands at $334,458. From a “seasonal” perspective we were also slightly behind the median sales price in December of last year which stood at $320,000. Below are the charts showing the percentage of single family home sales in each category for the month of December as well as median prices over the past 12 months in North Palm Beach.
Our first sales report of the new year certainly shows how important a complete understanding of the numbers are when evaluating the value of your property. All real estate is very local in nature and you really need to dig deeply into all of the metrics surrounding any property. The real estate market operates very efficiently but you have to understand all the variables to make knowledgeable decisions.
Until next month…………