Only 10 days left until we ring in the New Year and this is Paradise Sharks last update for 2016 of the local real estate market here in the Northern Palm Beaches. Sales volume declined this year when compared to 2015 but once again median prices of both single family homes and condominiums will be higher. As we head into 2017 there are many questions about where we go from here.
As of December 15th, the median condo price in the Jupiter area has fallen once again for the 6th straight month. Prices remain higher than last year but the 12 month gain at this point is hovering right about 5%. Compare that to the median single family home price in the area that is up about 8.6% over the same period.
Affordability remains a big problem for many in south Florida. Almost 40% of young Americans are living with their parents, or other relatives, and that is the highest percentage in over 75 years. The cost of living on their own is one key reason and in Jupiter the median single family home listed for sale as of this minute is priced at $669,999. That’s enough to scare anyone into living with mom and dad. The fact that the median price of a single family home sold so far in Jupiter in 2016 is $450,000 shows a major disconnect between what is available and what is selling.
So far the median price on a single family home has continued climbing but recent moves in the cost of borrowing money are having their affect on the market. Pending home sales in the Jupiter area are at the lowest levels we have seen in years. Interest rates continue to climb and are up again this week by 13 basis points on a 30 year fixed mortgage.
But the season is coming, the stock market has been soaring and we have a new President moving into the White House next month who says he is going to make America great again. With home prices rising now for 5 straight years in the Jupiter area it seems like 2017 may be setting up to be a year of consolidation. If I was a betting man I would be leaning towards lower prices in the single family market in the year ahead. If Donald Trump can make us great again and pay down that $20 trillion dollar debt in a big league way as he promised I’ll be eating those words.
The bond market continues to sell off and finding investors willing to buy government bonds at low interest rates when our balance sheet is so heavy with debt is getting to be a big problem. Rates under 5% should not kill real estate but if we see them moving much higher the upcoming year will be full of surprises.
Stay tuned as the real estate waters of 2017 are looking very choppy…..