MIAMI — Palm Beach County total home sales and median prices increased year-over-year in July 2020 as new pending sales surged double digits, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Fueled by a robust increase in luxury $1-million-and-up home sales, Palm Beach total home sales surged 8.4% year-over-year in July, from 3,007 to 3,260. Pending sales, a future indicator of closings, continued rising last month with single-family pending sales rising 20.3% to 2,069 and condo pending contracts jumping 20.1% to 1,507.
“Palm Beach County real estate has completed a robust recovery from the global COVID-19 situation as total home sales, single-family home transactions and condo sales increased in July 2020,” JTHS-MIAMI President David Abernathy said. “The increases highlight the robust fundamentals of the South Florida housing market going into the COVID-19 situation.”
Pending sales began surging in mid-April and are stronger than they were before the COVID-19 stay home orders.
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 on Aug. 19 that the purchase index increased slightly by 1% on an adjusted basis. The purchase index remained 27% higher than the same week in 2019.
The COVID-19 situation has accelerated the trend of homebuyers from New York and cold weather and tax-burdened Northeastern states searching and purchasing homes in South Florida.
Before the COVID-19 situation, the Palm Beach market was exceptionally strong. 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 Total Home Sales, Luxury Transactions Surge in July
Palm Beach total home sales surged 8.4% year-over-year in July, from 3,007 to 3,260.
Palm Beach single-family home sales increased 9.4% year-over-year in July 2020, from 1,775 to 1,941. Palm Beach existing condo transactions increased 7.1% year-over-year in July 2020, from 1,232 to 1,319.
Palm Beach luxury transactions fueled the home sale increases. Luxury ($1-million-and-up) single-family home transactions increased 105.3% year-over-year in July to 234 sales. Luxury condo transactions increased 51.4% year-over-year in July to 53 sales.
Strong Price Appreciation in Palm Beach County
Strong demand coupled with limited supply continue to drive price appreciation in Palm Beach County.
Palm Beach County single-family home prices increased 12.5% year-over-year in July 2020, increasing from $355,013 to $399,320. Existing condo prices increased 10.8% year-over-year, from $185,000 to $205,000.
Total Dollar Volume Surges in July 2020
Single-family home dollar volume increased 39.5% year-over-year, from $1 billion to $1.4 billion. Condo dollar volume increased 11.9% year-over-year, from $361.2 million to $404.2 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.02% in July, down from 3.16% in June. The average commitment rate across all of 2019 was 3.94%.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
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 Distressed Sales Stay Low, Reflecting Healthy Market
Only 2.5% of all closed residential sales in Broward were distressed last month, including REO (bank-owned properties) and short sales, compared to 3.3% in July 2020.
Total Palm Beach distressed sales decreased 18.4%, from 98 to 80.
Short sales and REOs accounted for 0.3% and 2.2% year-over-year, respectively, of total Palm Beach sales in July 2020. Short sale transactions decreased 65.4% year-over-year while REOs decreased 1.4%.
Nationally, distressed sales represented less than 1% of sales in July, down from 3% in June up from 2% in June 2019.
Palm Beach Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 95.9% in July up 0.9% from 95% last year. The median percent of original list price received for existing condominiums was 94.3%, up 0.3% from 94% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 42 days, a 14.3% decrease from 49 days last year. The median number of days between the listing date and closing date for condos was 54 days, down 1.9% from 53 days last year.
The median time to sale for single-family homes was 85 days, a 9.6% decrease from 94 days last year. The median number of days to sale for condos was 91 days, a 4.2% decrease from 95 days.
National and State Statistics
Nationally, total existing-home sales transactions jumped 24.7% from June to a seasonally-adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year. Sales rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).
Statewide, last month’s closed sales of single-family homes statewide rose 11.7% year-over-year, totaling 31,436, while existing condo-townhouse sales totaled 11,147, up 6.5% – the first year-over-year increase in this category since March. 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 July was $304,100, up 8.5% from July 2019 ($280,400), as prices rose in every region. July’s national price increase marks 101 straight months of year-over-year gains. For the first time ever, national median home prices breached the $300,000 level.
In July, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for the 103rd consecutive month. The statewide median sales price for single-family existing homes was $295,000, up 10.1% 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 11.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Palm Beach Cash Buyers Top National Figure
Palm Beach cash transactions comprised 37.1% of July 2020 total closed sales, compared to 38.7% last year. The national figure for cash buyers is 16%.
Palm Beach’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 49.9% of condo closings were made in cash in July 2020 compared to 28.5% of single-family home sales.
Seller’s Market for Single-Family Homes, Condos
Inventory of single-family homes decreased 28.1% in July from 6,494 active listings last year to 4,666 last month. Condominium inventory increased 5.8% to 5,781 from 5,462 listings during the same period in 2019.
Months supply of inventory for single-family homes decreased 24.4% to 3.4 months, which indicates a seller’s market. Inventory for existing condominiums increased 16.3% to 5.7 months, which indicates a buyer’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of July decreased 12.6% year-over-year, from 11,956 to 10,447. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Palm Beach single-family homes increased 6.7% to 1,998 from 1,873. New listings of condominiums increased 28.5%, from 1,379 to 1,772.
Nationally, total housing inventory at the end of July totaled 1.50 million units, down from both 2.6% in June and 21.1% from one year ago (1.90 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, down from 3.9 months in June and down from the 4.2-month figure recorded in July 2019.
To access July 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