Six month run of higher Jupiter condo prices ends as predicted
We have been telling you to expect a pullback in median Jupiter condo prices and it has finally happened. And the fall is probably going to continue for at least a couple more months but we still are expecting prices to move higher during the 2014-2105 season. There is no doubt that the lack of choices for buyers is affecting sales. After all inventory has been falling like a heavy summer rain. The good news is that appears to have stabilized with a slight increase in buyer options as of October 15th.
As of today, median Jupiter condo prices have slipped to $190,000 from the $196,000 we reported just 30 days ago. Certainly a 3% pullback after a 6 month rise of almost 19% is not a very big deal. In fact, it probably is even healthy as straight up for too long is bad. We do not have to freshen our memories much to remember what happened when the “straight up” bubble burst back in 2005-2006. But the short term trend is clearly pointing lower and it would take very big sales numbers for Jupiter condo prices to do anything but fall for the next couple months. It could happen, but with limited supply our seasonal visitors will need to pull the trigger on what is out there at prices well above the most recent sales.
Keep in mind that median Jupiter condo prices lag what is happening on the front lines today. We only know a final sales price when the transaction closes which is typically 30 to 45 days+/- after a final buying decision was made. So when a condo closes today that buyer and seller agreed to a price over a month ago in most cases. But we do know that 30 to 45 days ago buyers were paying less for the median priced condo in the Northern Palm Beaches and that trend looks to be firmly in place through the end of the year.
There is also the fact that the type of condo that is selling at any particular moment will strongly affect Jupiter condo prices. We have been watching with interest a bank foreclosure in The Point building at Jupiter Yacht Club. It was just a few weeks ago the very same floor plan one floor above hit the market at $1,075,000 and within days was snapped up. While it has not closed we believe the sales price will be $1,040,000. The bank owned unit, which is in similar condition was listed at $960,000 or 11% lower than a unit that flew off the shelf a few weeks ago. It is still siting there. Has demand for $1M condos decreased? Is the fact that this unit is a foreclosure affecting it’s value? Stay tuned but if that unit is still sitting there the next time we update you on condo prices I am going to tell you the culprit is demand. But that is one unit, in one building, in the luxury market.
One thing is for sure, today’s market is very, very interesting. We are torn between normal correction and something bigger happening. Interest rates have dipped below 4% on 30 year fixed notes for the first time is ages and that is because the economy is soft. It is fragile. The question is will the demand for having a home in paradise be stronger even with the overall economy starting to sputter. Watch closely as Jupiter condo prices are telling us something. Always interesting, always fun.
Paradise Sharks Real Estate