Home Inventory in Palm Beach Gardens Down Another 6% in May
The amazing turnaround in the local real estate markets continues unabated with no end in sight. New home communities are jammed with anxious buyers who have been unable to find suitable properties in the resale market and prices continue to rise. The broad based recovery continues to pick up steam and last months sales were amazing considering the lack of choices many buyers face. We are seeing a bit more confidence in the job market as last months government reports showed a sharp turnaround driving more and more buyers to the market to take advantage of interest rates that were testing record lows last week before spiking 11 basis points so far this week.
Nationwide we are seeing similar statistics with CoreLogic reporting this week that home prices in March were 10.5% higher than a year ago with prices increasing in all but 4 of our 50 states. This was the largest year over year gains we have seen since March 2006. Besides historically low interest rates buyers still are seeing prices a full 25% below the peak in April 2006 and a combination of the two make homes very affordable.
Buyers with credit scores lower than 620 are still struggling to meet underwriting standards that continue to become more and more stringent. Scores below that level are difficult to fund even with conventional loan products with 20% down payments. Mortgage originations with borrowers who have scores between 620 and 680 have fallen over 90% over the past 5 years.
Foreclosures remain a significant force on the market here in Florida where scheduled auctions are up an amazing 55%. While five Florida cities are in the top 10 for the highest foreclosure rates in the country no city in Palm Beach County is tagged with this dubious distinction. Miami ranked #3 with 1 in every 269 properties in foreclosure. The risk of these foreclosures and other factors creating another housing bubble is real with “experts” evenly split on the matter. In the recent Home Price Expectations Survey recently completed by Zillow 52% see little or no risk of a housing bubble while 48 percent saw a moderate to high risk. With this much diversity in opinions it is hard to say that the housing market we are seeing is built on a solid foundation.
Every month at this time we take a closer look at changes in home inventory in Palm Beach Gardens and the surrounding areas. As you may recall last month at this time we reported decrease in inventory in 80% of our reporting municipalities for the second straight month. So how did the market react and just what did happen to inventory over the last 4 weeks?
This report shows our home inventory “power rankings” for the month starting on May1st. These rankings are set up so the top rated municipality will be the one who shows the highest overall reduction in inventory levels. Since it is these reductions, when coupled with stronger sales, that will continue to move prices higher we want to rank those accordingly. So here are the inventory power rankings are the rankings for the month of May.
#1 Tequesta –
#2 Palm Beach Gardens – down 6%
#3 Jupiter – down 4%
#4 Hobe Sound – down 3%
#5 Juno Beach – down 1%
During April in the northern Palm Beach County region all of the reporting municipalities showed further inventory declines with the average falling by 4.8% and the median decrease weighing in at 4%. These are significant declines in a market that was already “inventory challenged” and keeping pricing pressure strongly to the upside. We next move in this months reports to home inventory in Palm Beach Gardens where inventory levels decreased by 6% over the past four week period. As of May 1st, total home inventory in Palm Beach Gardens sits at 781 which is down 50 units from the 831 available on April 1st. With these levels we find ourselves with home inventory in Palm Beach Gardens down 8% from the 12 month average that now sits at 852. Looking at the “seasonal” factor we are down 17% from the level of home inventory of 943 in Palm Beach Gardens that we reported on May 1st of last year.
Stay tuned as the real estate market locally is much like the south Florida weather; ever changing. Preparation, timing and understanding remain the keys.
Fins up until June………..