September Home Sales in Palm Beach Gardens Down 24%
Father Time does keep marching on and it is so hard to believe that Friday we will be into November with Thanksgiving just around the corner. Already we see multitudes of our winter visitors and their cars arriving as the beaches, bars and restaurants are quickly filling up. Welcome back!
The real estate market has gone through changes since our visitors left us in May with limited well priced inventory continuing to be a problem for buyers. Interest rates have pulled back, the unemployment rate is back down to a 5 year low and our leaders in Washington have delayed any substantive talks to deal with our debt issue until after the first of the year. Locally home prices have leveled off as we still see double digit year over year gains but the month over month numbers show very little change.
While more and more transactions are being settled for cash the ability for borrowers to qualify for loans has improved as lenders are accepting lower credit scores and smaller down payments. Right now the average FICO score on a closed home loan is 732 and over 30% of all loans went to those with sub 700 scores. This is down from the 750 average score we saw a year ago. While underwriting is still a frustrating process banks are trying to approve more loans as the re-financing activity has all but dried up so banks are getting creative with loans once again trying to drive business.
Everybody agrees that real estate has been the driving force behind the economic recovery we have seen and historic low rates were a huge factor in the recovery. Everyone was a buyer again with investors adding to the fury purchasing at least 20% of all properties sold in Palm Beach County over the past year. Sellers have raised their prices as inventory levels continue to shrink. But the market is always moving and as overpriced inventory sits stagnant we have seen the overall selection improve with stabilization in the overall inventory for two straight months.
As quickly as they had been buying buyers started hitting the brakes and we have seen sales slow in the northern Palm Beach County region both in July and August and something in the air just feels a bit different. Is demand slowing just because sellers are asking too much and buyers aren’t going to overpay with the last bubble still fresh in their mind?
Once again it is time to take a deeper look in to sales levels of single family homes in the north county region to see if the recent slide in closings will continue. Home sales in Palm Beach Gardens and the neighboring communities started to level off in July so let’s see what transpired during the month ended October 1st.
North Palm Beach –
Hobe Sound –
Palm Beach Gardens – down 24%
Jupiter – down 29%
Tequesta – down 32%
Last month in this column we reported that 60% of our reporting communities showed weaker sales with a spread of 72.5% between the best and worst performing municipalities. That was a huge spread but if we throw out the strong numbers reported by North Palm Beach sales were really down across the board with a spread of 10%. This month we have 80% of our communities showing a decline in sales but this month the spread shrank to 40% which still shows volatility. This volatility points to inventory still a major contributor to sales numbers but this months drop when you consider inventory stabilization is significant.
We next move in this months report to home sales in Palm Beach Gardens that dropped 24% on the heels of last month’s drop of 1%. During the month of September a total of 72 Palm Beach Gardens single family homes sold compared with 95 during the previous month. With this showing we fell far below the 12 month average sales volume which currently stands at 90.66. On a “seasonal” note home sales in Palm Beach Gardens we also fell just below the 73 sales we had in the same month in 2012.
As we saw sales volume decrease in Palm Beach Gardens we saw the heaviest activity in homes priced between $300,001 and $500,000 with 28 sales representing 39% of the market. With this showing the median sales price moved considerably higher to $405,000 up 21% from last months number of $335,000. We also were well above the 12 month average which now stands at $358,520 From a “seasonal” perspective we also remained significantly higher than the median sales price from September of last year which came in at $350,000. Below are the charts showing the percentage of single family home sales in each category for the month of September as well as median prices over the past 12 months in Palm Beach Gardens.
It has been a while since we were at such an important crossroad and the next month will help us determine where this market is headed. Fins up until November………..