Absorption Rate in Jupiter Stays Near 7 Year Lows

Absorption rate in Jupiter sits at 6.64 months

Memorial Day is in the rear view and that means summer has arrived in South Florida. Buyers are hoping that inventory levels of homes available for sale increase as many are frustrated at the lack of choice available in today’s markets. What was a fever will heat up even more if interest rates do not back off from the increases we have seen over the past couple months. As of this morning the average overnight rate on a 30 year fixed mortgage sits at 3.75% which is up almost 10% from where we stood just 3 short weeks ago. After three straight weeks to the upside most are looking for those rates to back off a bit this week and time will tell.

Each month at this time we take a look at the absorption rate in Jupiter and the surrounding communities as the trend of these numbers shows buyers what they can expect in choices when they are heading out to look for a home. We base this number on how long it will take the market to absorb all of the homes on the market if sales levels over the prior 30 days remain constant and no other listings are added to the market. We look at the absorption rate which includes pending and contingent listings as it gives us a truer picture than the inventory level which eliminates those listings. The absorption rate will always be higher than the inventory level.

The amazing recovery we have been experiencing continues with fantastic sales again in April even with inventory levels that continue to fall. How long the housing market can carry the entire economic rebound on it’s shoulders without pulling back remains to be seen. While home prices are still well below the levels we hit at the height of the market that spread is narrowing and there is some debate as to if we are heading straight for another bubble. As long as the overall labor market numbers stay weak and with still elevated levels of foreclosures hiding in the shadows those concerns remain real. Just last week the Fed showed signs that there aggressive program of quantitative easing may be pulled back at some point and that is one of the main reasons we have seen a spike in interest rates. But for now the local real estate market continues to race along at full steam.

All along the Fed has stated that they will continue to but government bonds to artificially keep rates at the historic low levels we have become accustomed to. That is until Bernanke’s remarks of last week. Any change in that policy, which has the Fed buying $85 billion in treasury and mortgage bonds, can have sweeping effects on the real estate market, here and throughout the rest of the country. Most signs point to September meeting of the Fed as the earliest any reduction in these purchases come to fruition and they would probably start with a small reduction to see just how the markets do react. But keep a close eye on interest rates which have spoiled buyers over the past few years.

So without further adieu let’s check in on the absorption rate in Jupiter and the surrounding communities to see what has changed since the last numbers we published.

Jupiter

Absorption rate in Palm Beach Gardens –
Absorption rate in Jupiter – 6.64 months up from 6.07
Absorption rate in Hobe Sound – 7.55 months up from 6.39
Absorption Rate in Tequesta – 9.11 months up from 7.47

Last month we once again had all four of our reporting municipalities show lower absorption rates with the average absorption rate sitting at 6.5 months which was the lowest level we have seen in over 7 years. This month we saw a reversal in this trend as 75% of reporting cities showed an increase in the absorption rate with the average jumping 13% to 7.35 months. We move next in this months report to the absorption rate in Jupiter where we saw a 9% move to the upside. A 12% decrease in final sales numbers coupled with a 3% decrease in inventory brought the absorption rate in Jupiter to 6.64 months up from the 6.07 we reported last month. With this increase we stayed well below the 12 month average which sits at 7.98 months and also well below our year ago numbers when we reported 7.99 months.

Keep a close eye on interest rates and our May sales numbers which will be published in the coming days.

Fins up until June ………….

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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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