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Palm Beach County Home Prices Rise in June Due to Strong Demand and Limited Supply; Surging Pending Sales Reflect Market Recovery Following the COVID-19 Impact

Palm Beach shoreline
Palm Beach shoreline

MIAMI — Palm Beach County median prices increased year-over-year in June 2020 as home sales continued trending upward despite the global COVID-19 situation, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

 

New pending home sales in June are up double digits year-over-year. Pending sales are a future indicator of closings one to two months out. New pending sales for Palm Beach single-family homes increased 31% year-over-year, from 1,746 to 2,287. New pending sales for condos increased 14.2% in June, from 1,301 to 1,486.

 

“The Palm Beach County real estate market continues its remarkable recovery as evidenced by surging pending sales and increasing market activity,” JTHS-MIAMI President David Abernathy said. “Palm Beach County continues in a seller’s market for both single-family homes and condos.”

 

Pending sales started to surge in mid-April and are stronger than they were before the COVID-19 stay home orders. Home sales, however, are taking longer to close. Time to contract for Palm Beach single family homes increased 12% year-over-year in June, from 50 days to 56 days. Social distancing and shelter-in-place orders in some cases are delaying the homebuying process closing—including home inspections, appraisals and walk throughs.

 

Mortgage applications, another indicator of future sales, are on the rise in South Florida and nationally, as the Miami mega region continues to see additional homebuying interest from the Northeast. The Mortgage Bankers Association (MBA) reported that mortgage applications rose by 5.1% week over week for the week ending July 10.

 

The COVID-19 situation has accelerated the trend of homebuyers from New York and other tax-burdened Northeastern states searching and purchasing homes in South Florida.

 

Before the COVID-19 situation, Palm Beach real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax burdened states, high consumer confidence and a strong job market.

 

Palm Beach County Median Prices Rise

Strong demand coupled with limited supply continue to drive price appreciation in Palm Beach.

 

Palm Beach County single-family home prices increased 5.3% year-over-year in June 2020, increasing from $356,990 to $376,000. Existing condo prices increased 7.9% year-over-year, from $190,000 to $205,000.

 

Palm Beach County Total Home Sales Decrease

Palm Beach County total home sales decreased 15.5% year-over-year in June 2020, from 2,858 to 2,415. Palm Beach County single-family home sales decreased 12.6% year-over-year in June 2020, from 1,692 to 1,478. Palm Beach County existing condo transactions declined 19.6% year-over-year in June 2020, from 1,166 to 937.

 

Dollar Volume Decreases

Single-family home dollar volume increased 16% year-over-year, from $858.2 million to $995.8 million. Condo dollar volume decreased 13.4% year-over-year, from $329.7 million to $285.5 million.

 

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.16% in June, down from 3.23% in May. The average commitment rate across all of 2019 was 3.94%.

 

A new condo approval process is expected to increase sales. The new guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, are expected to generate increased homeownership opportunities.

 

Palm Beach County Distressed Sales Stay Low, Reflecting Healthy Market

Only 3.1% of all closed residential sales in Palm Beach County were distressed last month, including REO (bank-owned properties) and short sales, compared to 2.1% in June 2020.

 

Total Palm Beach County distressed sales increased 22.9%, from 61 to 75.

 

Short sales and REOs accounted for 0.5% and 2.6% year-over-year, respectively, of total Palm Beach sales in June 2020. Short sale transactions increased 18.2% year-over-year while REOs increased 24%.

 

Nationally, distressed sales represented 3% of sales in June, about even with May but up from 2% in June 2019.

 

Palm Beach County Real Estate Selling Close to List Price

The median percent of original list price received for single-family homes was 95% in June, up 0.3% from 94.7% last year. The median percent of original list price received for existing condominiums was 94.1%, up 0.4% from 93.7% last year.

 

The median number of days between listing and contract dates for Palm Beach single-family home sales was 56 days, a 12% increase from 50 days last year. The median number of days between the listing date and closing date for condos was 67 days, a 21.8% increase from 55 days.

 

The median time to sale for single-family homes was 102 days, a 5.2% increase from 97 days last year. The median number of days to sale for condos was 107 days, a 12.6% increase from 95 days.

 

National and State Statistics

Nationally, total existing-home sales transactions jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June. Sales overall, however, dipped year-over-year, down 11.3% from a year ago (5.32 million in June 2019).

 

Statewide, last month’s closed sales of single-family homes statewide rose 1.3% year-over-year, totaling 27,650, while condo-townhouse sales decreased 10.9%, for a total of 8,996. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

 

The national median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.

 

In June, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 102 consecutive months. The statewide median sales price for single-family existing homes was $282,000, up 4.4% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $210,000, up 7.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

 

Palm Beach County Cash Buyers Still More than Double National Figure

Palm Beach County cash transactions comprised 37.6% of June 2020 total closed sales, compared to 40.3% last year. The national figure for cash buyers is 16%.

 

Palm Beach County’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.

 

Condominiums comprise a large portion of Palm Beach’s cash purchases as 50.5% of condo closings were made in cash in June 2020 compared to 29.5% of single-family home sales.

 

Seller’s Market for Single-Family Homes, Condos

Inventory of single-family homes decreased 26.1% in June from 6,753 active listings last year to 4,989 last month. Condominium inventory increased 2.5% to 5,831 from 5,691 listings during the same period in 2019.

 

Months supply of inventory for single-family homes decreased 22.9% to 3.7 months, which indicates a seller’s market. Inventory for existing condominiums increased 2.5% to 5.8 months, which indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.

 

Total active listings at the end of June decreased 13.1% year-over-year, from 12,444 to 10,820. Active listings remain about 60% below 2008 levels when sales bottomed.

 

New listings of Palm Beach County single-family homes increased 0.9% to 1,846 from 1,829. New listings of condominiums increased 21.7%, from 1,372 to 1,670.

 

Nationally, total housing inventory the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.

 

To access June 2020 Palm Beach County Statistical Reports, visit http://www.SFMarketIntel.com

 

Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.

 

About the MIAMI Association of Realtors

The MIAMI Association of Realtors was chartered by the National Association of Realtors in 1920 and is celebrating 100 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward-MIAMI Association of Realtors, the Jupiter Tequesta Hobe Sound (JTHS-MIAMI) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents 52,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 223 international organizations worldwide. MIAMI’s official website is www.MiamiRealtors.com

 

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