Palm Beach Gardens Absorption Rate Increases by 14%
October has arrived and with it more changes in the local real estate market which been extremely strong but seems to have been stopping to catch its breath over the past few weeks. Sales have slowed and it is hard to pinpoint if the reason is only related to the lack of quality inventory for buyers to choose from. Perhaps the recent spike in interest rates played a role. While they have dropped 42 basis points over the past three weeks we are still 83 basis points above where we stood on May 5th.
Inventory levels have stabilized over the past 60 days and while the pressure is still downward we have experience very minimal overall decreases since August. Signs still point to inventory being the main culprit behind the drop in sales. Much of the inventory that is available tends to be priced significantly higher than the most recent comparable sales and buyers are left either paying more or waiting for the new listings that hit the market as those that are well priced are still selling very quickly.
With the local nature of the markets it is quite normal to see a certain town have a rate that is somewhat volatile but this month we have seen each of our reporting municipalities shown declines for the first time in 14 month. That is a long time; 426 days long and bears watching especially as some of these increases were rather dramatic.
One of the most important numbers to watch in any market is the absorption rate and each month at this time we take a look at those numbers in Palm Beach Gardens and the surrounding communities. The trend of these numbers shows buyers what they can expect in choices when they start shopping for the perfect Florida 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. 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 on September 3rd.
Absorption rate in Hobe Sound –
Absorption rate in Palm Beach Gardens – 7.15 months up from 6.29
Absorption rate in Jupiter – 8.3 months up from 5.18
Absorption Rate in Tequesta – 9.5 months up from 5.87
Last month at this time we reported that 75% of our reporting municipalities showed declining absorption rates with the average absorption rate sitting at 5.98 months which was a new 7 year low. While an increase off of record lows is not unusual the bounce we experienced over the past 30 days was a big one. During that span we have 100% of our towns and villages show increases, mostly significant, with the average jumping 33% to 7.94 months and the highest level we have seen in some time. We next move in this months report to the absorption rate in Palm Beach Gardens where we saw a 13% move to the upside. An 11% decrease in final sales numbers combined with a 1% increase in inventory levels brought the absorption rate in Palm Beach Gardens to 7.15 months up from the 6.29 months we reported last month. With this increase we remained just below the 12 month average which sits at 7.92 months and also well below our year ago numbers when we reported 9.00 months. While he increase was not as dramatic and some of the neighboring communities this is a new 5 month high in Palm Beach Gardens and again bears watching.
Not saying the great real estate recovery is over but no doubt it is changing and the next 30 days will once again be very, very interesting. Fins up ………….