MIAMI — Palm Beach County total home sales surged in November 2020 as strong pent-up demand and record-low mortgage rates fueled transactions, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Palm Beach County total home sales jumped 32.3% year-over-year, from 2,124 to 2,810. Palm Beach single-family home sales jumped 28.4% year-over-year, from 1,194 to 1,533. Palm Beach existing condo transactions increased 37.3% year-over-year, from 930 to 1,277. Palm Beach single-family home sales have now posted year-over-year increases for five consecutive months and Palm Beach existing condos have posted transaction gains for five straight months.
“Remote work, home schooling, record-low mortgage rates, low inventory and purchases from tax-burdened Northeastern home buyers are some of the factors boosting Palm Beach real estate,” JTHS-MIAMI President David Abernathy said.
Palm Beach year-to-date November home sales have already exceeded last year total despite the four-month interruption caused by the pandemic. Year-to-date dollar volume has also already exceeded the 2019 total.
Months supply of inventory for single-family homes is at 2.7 months. The lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply.
Palm Beach Luxury Home Sales Surge 167.6% in November 2020
Palm Beach County single-family homes priced between $400K to $600K surged 45.7% year-over-year to 421 transactions in November 2020. Palm Beach existing condo sales priced between $400K to $600K increased 72.9% to 102 transactions.
Palm Beach single-family luxury ($1-million-and-up) transactions jumped 167.6% year-over-year to 198 sales in November 2020. Palm Beach existing condo luxury ($1-million-and-up) sales increased 91.9% year-over-year to 71 transactions.
Record-low interest rates; a record-high S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
Robust Price Appreciation in Palm Beach County
Strong demand coupled with limited supply continue to drive price appreciation in Palm Beach.
Palm Beach County single-family home prices increased 19.4% year-over-year in November 2020, increasing from $350,000 to $418,000. Existing condo prices increased 16.9% year-over-year, from $188,250 to $220,000.
Single-Family Home and Condo Dollar Volume Increases
Single-family home dollar volume increased 97.5% year-over-year, from $584.5 million to $1.2 billion. Condo dollar volume increased 60.1% year-over-year, from $305.1 million to $488.6 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.77% in November, down from 2.83% in October. 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 better condo approval process is expected to increase sales. The 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 1.6% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 2.8% in November 2020.
Total Palm Beach County distressed sales decreased 25.4%, from 59 to 44.
Short sales and REOs accounted for 0.4% and 1.2% year-over-year, respectively, of total Palm Beach County sales in November 2020. Short sale transactions decreased 23.1% year-over-year while REOs decreased 26.1%.
Nationally, distressed sales represented less than 1% of sales in November, equal to October’s percentage but down from 2% in November 2019.
Palm Beach Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 96.7% in November, up 1.6% from 95.2% last year. The median percent of original list price received for existing condominiums was 95.2%, up 0.8% from 94.4% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 24 days, a 45.5% decrease from 44 days last year. The median number of days between the listing date and closing date for condos was 42 days, down 8.7% from 46 days.
The median time to sale for single-family homes was 68 days, a 22.7% decrease from 88 days last year. The median number of days to sale for condos was 85 days, a 1.2% decrease from 86 days.
National and State Statistics
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 2.5% from October to a seasonally-adjusted annual rate of 6.69 million in November. However, sales in total rose year-over-year, up 25.8% from a year ago (5.32 million in November 2019).
In November, closed sales of single-family homes statewide totaled 26,406, up 22.9% year-over-year, while existing condo-townhouse sales totaled 11,003, up 30.2% over November 2019. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, the median existing-home price for all housing types in November was $310,800, up 14.6% from November 2019 ($271,300), as prices increased in every region. November’s national price increase marks 105 straight months of year-over-year gains.
The statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year in November for 107 consecutive months. The statewide median sales price for single-family existing homes was $305,000, up 14.1% 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 $228,000, up 16.9% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Palm Beach’s Cash Buyers are Double National Figure
Palm Beach cash transactions comprised 40.8% of November 2020 total closed sales, compared to 43.7% last year. The national figure for cash buyers is 20%.
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 Broward’s cash purchases as 52.1% of condo closings were made in cash in November 2020 compared to 31.4% of single-family home sales.
Seller’s Market for Single-Family Homes and Condos
Inventory of single-family homes decreased 38.3% in November from 6,389 active listings last year to 3,940 last month. Condominium inventory decreased 7.6% to 5,403 from 8,004 listings during the same period in 2019.
Months supply of inventory for single-family homes decreased 38.6% to 2.7 months, which indicates a seller’s market. Inventory for existing condominiums decreased 7.5% to 4.9 months, which indicates a balanced market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of November decreased 23.6% year-over-year, from 12,234 to 9,343. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Broward single-family homes increased 3.8% to 1,725 from 1,662. New listings of condominiums decreased 0.1%, from 1,570 to 1,568.
Nationally, total housing inventory at the end of November totaled 1.28 million units, down 9.9% from October and down 22% from one year ago (1.64 million). Unsold inventory sits at an all-time low 2.3-month supply at the current sales pace, down from 2.5 months in October and down from the 3.7-month figure recorded in November 2019.
To access November 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