Not sure there is a better adjective to describe the real estate market in the Northern Palm Beaches than uncertain. Less than two weeks before a new President takes charge and no doubt some uncertainty in Washington as well. We have been told it is almost a certainty that interest rates will rise and they did. Until the last two weeks when the average overnight rate on a fixed 30 year mortgage has fallen 18 basis points and is now back below 4%. Uncertainty.
Donald Trump has promised to pay down our national debt that at this moment stands at $19,953,571,238,872. I do not know how certain you are about this number actually declining in a meaningful way for the first time since the 1970’s. I am hopeful, but very much uncertain about the reality vs the promise. One thing I know is if that debt doesn’t start to get paid down interest rates cannot rise much without some pretty serious problems. And the real estate market is only a part of that uncertainty. Of that I am certain.
Even though our season has officially kicked off, here in the Jupiter area, home buyers are uncertain. Affordability is a real issue and with higher interest rates it becomes a bigger problem. The Northern Palm Beaches enjoyed by far the highest median single family home prices in Palm Beach County during 2016. Jupiter led the pack of the 11 largest markets at $450,000, Tequesta was in second place at $440,000 with Palm Beach Gardens in 3rd at $430,000. No other city in our study came in above $400,000.
As of January 1st the median single family home value in the Northern Palm Beaches was at $436,000. There has been little movement in this value over the past nine months. On September 1st the median value was $435,000. On April 1st of last year they were at $432,500. There are signs of buyers pushing prices up slightly over the past week but not enough data to say with any level of certainty. During December we had more single family home closings than we had seen since August. Those numbers will be down significantly over the next two months. Median single family home prices in the Jupiter area are currently up 6.6% from year ago numbers but without stronger sales ahead that is going to change.
January is historically a month when we see a strong increase in pending home sales. Last year they were up 12.6%. In 2015 they were up 15%. We begin 2017 with the worst pending home sales levels we have seen in many years. So far after the first week of January they are down further. We certainly expect more contracts to be written in the weeks ahead but there is much uncertainty.
Some market segments doing much better than others. Inventory low in one neighborhood and very high in others. Homes in the best locations, homes in the best condition still doing well. If you are doing anything real estate get informed and know the numbers surrounding any property you may be putting together a transaction on. If Paradise Sharks can be of help in any way please feel free to contact us anytime at firstname.lastname@example.org or 561.308.0175.
Stay tuned as it is going to be a very interesting year…..