Twenty three days ago America voted and in January Donald Trump will be moving into the White House. Change is in the air. Lots of change and much will have profound effects on the real estate market here in the Northern Palm Beaches. After the election, sales of government bonds plummeted driving interest rates a half a point higher in a two week span. This week they have pulled back but only slightly.
Paradise Sharks has said for many years that interest rates cannot go much higher as we have this national debt problem that is just about ready to hit the $20 trillion dollar mark. Interest on this debt at higher rates drive us closer to the edge of the old fiscal cliff that unfortunately was just a can being kicked down the road during this years election. Donald Trump promised he is going to pay down this debt in a “big league” way. I hope and pray he does but am watching closely. Very closely and you should be too.
Over the past month in Jupiter and the surrounding municipalities, pending home sales have moved sharply higher. In fact, they are up over 11% from where we sat 30 days ago. It was the first monthly increase we have seen in 7 long months. Last year during the same period pending home sales dropped so this is a very good sign. Higher interest rates may have some buying quickly in anticipation of significantly higher interest rates coming our way. Again, the policies of the Trump administration means big changes and we just do not know what the effects will be.
Paradise Sharks is about a week away from our next update on sales and prices of single family homes in the Jupiter area. Watch for November sales to be the slowest month we have seen in a very long time and one reason we really needed to see last months spike in pending home sales. Median prices on single family homes look like they will be moving higher to a new 10 year high. Affordability remains a significant problem in the area and if rates keep rising there are signs that are pointing to prices pulling back in the new year. It actually would be a healthy sign for the long term market.
In line with expectations, we also saw the number of homes available to buyers increase during the month on November, but the jump was smaller than anticipated. It marks the 3rd straight month buyers have had more options with inventory levels moving higher by just over 1% over the past 30 days. Compare than to November inventory levels that last year were up 5.8%. Even more telling is that during the last half of November the number of homes available for sale actually declined so pay close attention.
As rates increase, we will see more home owners who have a mortgage very happy to stay put. If rates continue to climb this will remain a much stronger trend. If demand in South Florida remains fairly strong this will add pricing pressure to the upside.
So much change in the air and no clear answers so buyers and sellers need to seek out education and make informed decisions. Always interview at least three brokers and ask lots of questions. Get informed and find the broker who you trust. The one that can answer your questions. If you are doing anything real estate in Palm Beach or Martin County Paradise Sharks would be honored to be included on your interview list. If you are anywhere else and have a question we can help with we are most happy to do so. You will find us very easy to reach at 561.308.0175 or firstname.lastname@example.org.