Absorption Rate in Palm Beach Gardens Hits New 10 Month High


Absorption rate in Palm Beach Gardens Up for 1st Time in 4 Months

This week we move into the second half of the “season” down here in South Florida. Historically, each year around November 1st our northern friends flock to the area only to return home when May rolls around. You used to be able to count on it, but every year the beach is crowded earlier and the Food Shack line is longer into May. As we look forward to the next 90 days we “look back” each month at this time to review the absorption rate in the various municipalities in the Northern Palm Beach County region.

The absorption rate is a very important metric when looking at the strength of the market and gives us an idea of what we can expect moving forward. The rate simply tells us how long it will take the market at it’s most recent sales levels to absorb all of the available inventory. The lower the rate the stronger the market.

We have seen a lot of volatility in sales lately; just look at our recent articles where sales in Hobe Sound jumped 69% over the previous month while those in North Palm Beach fell 75%. Granted these are both smaller towns but the swing is dramatic and can mainly be tied to the availability of well priced homes that a buyer has to choose from. Our northern friends, who are considering purchasing a home this year, are finding that prices are higher and the perfect casa in the sun is harder to find. One that hit the streets in Jupiter on January 1st had a total of 794 properties to consider when the previous year they had 1,055.

Those borrowing money to finance their purchase are finding that interest rates have also fallen during that same time period. The rate on a 30 year fixed mortgage at the “average overnight rate” was about 13% lower on January 1st than it was a year ago which represents a total of 50 basis points. But the winds have been changing as of late and while rates hit a low of 3.36% back on December 9th they have risen five of the next eight weeks and have jumped 7% to 3.6% as of last Sunday. They have settled a bit so far this week sitting this morning at 3.59%.

Year end reports continue to roll out and CoreLogic came out yesterday showing that real estate prices had risen during 2012 in 46 of 50 states with an average increase of 8.3%. Historically low interest rates coupled with increasing prices is fueling the demand with buyers who are now seeing some urgency to act. Here in Jupiter we saw median prices in 2012 jump 11% for the year with sales also increasing 11% over those in 2011.

New construction communities are once again not only viable, but thriving. Buyers are seeing banks list foreclosures at higher prices and with the poor condition of many of these homes are choosing other options. So let’s check in on the absorption rate in Palm Beach Gardens and the surrounding communities to see what has changed since the last numbers we published.

Palm Beach Gardens

Absorption rate in Jupiter –
Absorption rate in Hobe Sound –
Absorption rate in Palm Beach Gardens – 10.58 months up from 8.55
Absorption Rate in Tequesta – 11.43 months up from 11.22

Last month we had three of our reporting municipalities show lower absorption rates with the average absorption rate sitting at 9.24 months. This month things switched around with three municipalities showing higher absorption rates with the average jumping to 9.91 months. We move next in this months report with the absorption rate in Palm Beach Gardens which is one of three towns showing an increase over the past 30 days. A significant decrease in sales numbers coupled with a tiny increase in inventory brought the absorption rate in Palm Beach Gardens to 10.58 months up significantly from the 8.55 we reported last month. With this increase we moved above the 12 month average which sits at 9.59 months. From a “seasonal” perspective we were far better off than our year ago numbers when we reported 12.98 months.

Besides our beaches and bars being filled to the brim this month the best news for local real estate is February is when home search activity in the state at it’s highest level.

Sunny skies ahead ………

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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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