MIAMI — Palm Beach County continued its trend of double-digit total home sales in 1Q 2021 as 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 increased 9.6% year-over-year, from 7,073 to 7,753. Palm Beach single-family home transactions rose 5.3%, from 3,881 to 4,088. Palm Beach single-family homes have now posted year-over-year sales gains in seven of the last eight quarters, a span of two years. Palm Beach existing condo sales increased 14.8%, from 3,192 to 3,665.
“Tax-burdened homebuyers from the Northeast and West Coast continue to purchase primary homes in Palm Beach County as they seek our incredible lifestyle and pro-business environment,” JTHS-MIAMI President Bill Mate said.
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 Sales Jump 74.6% as Tax-Burdened High-Net-Worth Buyers Relocate
Palm Beach County single-family home luxury ($1-million-and-up) transactions surged 74.6% year-over-year to 604 transactions in 1Q 2021. Palm Beach County condo luxury sales increased 71.6% to 278 transactions in 1Q 2021.
Record-low interest rates; a record-high S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern and West Coast 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.
Palm Beach Homeowners’ Home Equity Surges as Many Pay Lower Mortgage Payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So not only are many homeowners paying lower mortgage payments today; they are doing so while their wealth (home equity) has significantly increased. Home equity can be tapped for renovations, college loans and more.
Palm Beach County single-family home median prices rose 19.2% year-over-year, from $365,000 to $435,000. Palm Beach County existing condo median prices rose 22.1% year-over-year, from $190,750 to $233,000.
Rising median prices is a trend nationwide as record-low mortgages rates and the increased availability of remote work and education has accelerated the demand for housing. Low inventory relative to high demand leads to prices rising.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. Also, as more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Palm Beach Dollar Volume Totals $5.3 Billion, Showcasing Impact Housing Plays in Economy
While other industries struggled over the past year, housing lifted the economy nationally and locally. For every two homes sold in the U.S., one job is created. Palm Beach dollar volume showcases the impact housing plays in the local economy.
Palm Beach single-family home dollar volume rose 60.8%, from $2.4 billion to $3.8 billion. Palm Beach existing condo dollar volume increased 39.7% to $1.5 billion.
Non-distressed sales comprised about 98.7% of all closed residential sales in 1Q 2021 vs. 97.4% in 1Q 2020. Only 1.3% of all closed residential sales in Palm Beach were distressed in 1Q 2021,
including REO (bank-owned properties) and short sales, compared to 2.6% in 1Q 2020.
Short sales and REOs accounted for 0.2% and 0.1%, respectively, of Palm Beach sales in 1Q 2021. Short sale transactions decreased 32.1% year-over-year while REOs fell 50%.
Lower mortgage rates made home purchases more affordable in 2021. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.88% for 1Q 2021, down from the 3.51% average recorded during the same quarter a year earlier.
Palm Beach Hot Markets: Buyers Look to Larger Homes Available in the Suburbs
Months’ supply of inventory is a strong indicator of real estate activity. A look at Palm Beach County neighborhoods with the lowest months of supply of inventory (at least 100 new pending sales) in 1Q 2021:
- Greenacres, a north Palm Beach County city east of Wellington, had 1 months supply
- Jupiter, a north Palm Beach County town south of Tequesta, had 1.3 months supply
- Boynton Beach, a south Palm Beach city north of Delray Beach, had 1.6 months supply
- Lake Worth, a north Palm Beach city west of Palm Beach, had 2.3 months supply
- Boca Raton, a south Palm Beach city along the Broward line, had 2.4 months supply
- Jupiter, a north Palm Beach County town south of Tequesta, had had 1.3 months supply
- Palm Beach Gardens, a north Palm Beach County city south of Jupiter, had 1.7 months supply
- Delray Beach, a south Palm Beach city north of Boca Raton, had 2.6 months supply
- Greenacres, a north Palm Beach County city east of Wellington, had 2.8 months supply
- Boynton Beach, a south Palm Beach city north of Delray Beach, had 3 months supply
Robust Demand for Housing Statewide, Nationally Fueling Double-Digit Increase in Sales
Closed sales of single-family homes statewide totaled 78,353 in 1Q 2021, up 19.4% from the 1Q 2020 level. In Florida’s condo-townhouse market, statewide closed sales totaled 37,505 during 1Q 2021, up 37% compared to 1Q 2020, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.
The statewide median sales price for single-family existing homes in 1Q 2021 was $317,500, up 17.6% from the same time a year ago. The statewide median price for condo-townhouse properties during the quarter was $235,422, up 14.8% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home sales price rose 16.2% on a year-over-year basis to $319,200, a record high since 1989. All regions recorded double-digit year-over-year price growth, with the Northeast seeing a 22.1% increase, followed by the West (18.0%), South (15.0%) and Midwest (14.4%).
Buyers Targeting Palm Beach Existing Condos: Four Times More Inventory than Single-Family
At the current sales pace, the number of active listings represents 1.8 months of inventory for single-family homes (seller’s market) and 3.4 for condominiums (seller’s). A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Palm Beach real estate had 6,639 active listings in 1Q 2021, a 46.7% drop from the 12,466 listings at the same time last year. The inventory for single-family homes decreased 56.6%, from 6,265 to 2,718. Palm Beach existing condo inventory decreased 36.8%, from 6,201 to 3,921.
Palm Beach Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
With low inventory, particularly for single-family homes, Palm Beach properties are attracting multiple bids and buyers going over-list price. The median percent of original list price received was 97% for single-family homes and 95.4% for condos in 1Q 2021.
The median time to contract for single-family home listings was 25 days, a 52.8% drop from 53 days in 1Q 2020. The median time to contract for existing condos was 40 days, a 23.1% drop from 52 days in 1Q 2020.
The median time to sale for single-family homes decreased 26.8%, from 97 days to 71. The median time to sale for existing condos decreased 10.9%, from 92 to 82.
Palm Beach Cash Sales Double National Figure: South Florida Top Market for Global Buyers
Cash sales represented 47.9% of Palm Beach closed sales in 1Q 2021, compared to 45.9% in 1Q 2020. About 20 percent of U.S. home sales are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects South Florida’s top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash as well as some moving from more expensive U.S. markets who are able to buy more with their profits from real estate sales.
Cash sales accounted for 58.2% of all Palm Beach existing condo sales and 38.8% of single-family transactions.
1Q 2021 Palm Beach County Statistical Reports — visit 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 101 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