Buyers Once Again Have More Options
The number of homes available for sale in any market is really a double edged sword. For a buyer a higher level certainly gives them more opportunities to find a home that most perfectly matches their needs. They should also have a bit more leverage when it comes to negotiations as sellers are facing more competition. However, for everyone else not in the market for a home, and especially those who are actively trying to sell their home it means continued pricing pressure to the downside.
That of course is what we would expect in a normal market. But the northern Palm Beach County region is not your average place and the local real estate market has been anything but normal for many years. We are currently seeing some properties, typically those in the most highly prized locations, selling at prices that are higher than we experienced back at the height of the bubble in 2005/2006. We then see neighborhoods where very little is selling as buyers reject the opportunities as priced too high or see no value in the condition or location.
As of February 1st we once again have seen inventory levels increase in the region. And it was not a small move but almost 8% higher which is a significant increase in a one month period. We have to go back to August 1st of last year to find a month where the inventory level decreased. We have to go back to March 1st of last year to find a time when there were more homes on the market for sale.
There is no doubt the “great recovery” has been sputtering since late spring/early summer of last year. Inventories have been rising, sales have been falling and pricing pressure has been to the downside. But lately we are seeing some signs of good news. Median prices of single family homes have risen two straight months after hitting the lowest levels we had seen since March of last year. Pending home sales moved higher for the first time in 9 months. Too early to say we are seeing a shift in the market but at least we are seeing some signs that appear to be positive. No doubt this months increase in inventory is a concern.
On the front lines we are seeing homes in great condition, in good areas that are taking longer to sell. We showed a single family home in Jupiter a couple weeks ago that was one of the nicest we had ever seen in the neighborhood. Amazing and complete remodeling at a price that certainly would have seen a very quick sale back 7 or 8 months ago. And it sat, and sat, and sat for almost 4 months before somebody finally snapped it up. In other instances, we are seeing properly priced and marketed properties in top rated locations sell lightning fast with multiple offers in the first day or two of hitting the market.
We are also seeing properties priced well above what the most recent sales have been and sellers who decide to not even counter offers that are above those historical prices. We have been told our client has read that prices are up 18% since last year and their neighbor “Joe” sold his house for $360,000 last April so theirs must be worth $424,800. In reality the median price last April in the region was $360,000 and as of February 1st it was $359,389. Sellers have the right to ask whatever they choose for their property but it is also easy to see why inventory levels have grown.
What we do know is the best priced new opportunities, in the best location are still attracting attention and buyers still must have a well devised game plan to meet their goals. Always interesting, always fun.