MIAMI — Palm Beach County real estate posted another robust month of total home sales in May 2021 as pent-up demand and record-low mortgage rates continue fueling transactions, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Palm Beach County total home sales surged 137.8% year-over-year, from 1,588 to 3,777. Palm Beach County single-family home transactions rose 90.7%, from 991 to 1,890. Palm Beach existing condo sales increased 216.1%, from 597 to 1,887.
“Palm Beach County recorded a robust May sales month in history and the sales could have been even larger had there been more inventory,” JTHS-MIAMI President Bill Mate said. “More U.S. companies and individuals are relocating to South Florida, which is home to pro-business and low-taxes policies.”
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. More inventory is expected to come to the market later this year as potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
Palm Beach County Luxury Sales Jump as Tax-Burdened High-Net-Worth Buyers Relocate
Palm Beach County single-family luxury ($1-million-and-up) transactions jumped 236.2% year-over-year to 316 sales in May 2021. Palm Beach County existing condo luxury ($1-million-and-up) sales increased 522.6% year-over-year to 193 transactions.
Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Low interest rates; a robust 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.
Palm Beach single-family homes priced between $400K to $600K surged 147% year-over-year to 541 transactions in May 2021. Palm Beach existing condo sales priced between $400K to $600K increased 352.4% to 190 transactions.
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 median home prices increased 30.1% year-over-year in May 2021, increasing from $365,000 to $475,000. Existing condo median prices increased 25% year-over-year, from $200,000 to $250,000.
The greater share of luxury sales in the current market is part of the reason for the large year-over-year increase in median prices.
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.
Lower mortgage rates are making home purchases more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.96% in May, down from 3.06% in April. The average commitment rate across all of 2020 was 3.11%. Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021.
Palm Beach Dollar Volume Totals $2 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. Dollar volume showcases the impact housing plays in the local economy.
Single-family home dollar volume increased 186.1% year-over-year, from $649.9 million to $1.9 billion. Condo dollar volume increased 342.8% year-over-year, from $205.3 million to $909.1 million.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Only nine of the 1,909 condominium buildings in Miami-Dade, Broward and Palm Beach counties are approved for Federal Housing Administration loans as of June 21, 2021, according to the U.S. Department of Housing and Urban Development.
Palm Beach Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 0.8% of all closed residential sales in Palm Beach County were distressed last month, including REO (bank-owned properties) and short sales, compared to 3.5% in May 2020.
Total Palm Beach distressed sales decreased 44.6%, from 56 to 31.
Short sales and REOs accounted for 0.2% and 0.7% year-over-year, respectively, of total Palm Beach sales in May 2021. Short sale transactions decreased 30% year-over-year while REOs decreased 43.5%.
Nationally, distressed sales represented less than 1% of sales in May 2021, down from 3% in May 2020.
National, State Housing Demand Robust as More Inventory Expected to Arrive
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 0.9% from April to a seasonally-adjusted annual rate of 5.80 million in May. Sales in total climbed year-over-year, up 44.6% from a year ago (4.01 million in May 2020).
Statewide, closed sales of single-family homes in May totaled 30,985, up 57.9% year-over-year, while existing condo-townhouse sales totaled 15,491, up 155.2% over May 2020. 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 May was $350,300, up 23.6% from May 2020 ($283,500), as every region registered price increases. This is a record high and marks 111 straight months of year-over-year gains since March 2012.
The statewide median sales price for single-family existing homes was $344,900, up 27.7% 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 $250,000, up 24.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Seller’s Market for Palm Beach Real Estate
Inventory of single-family homes decreased 47.4% in May 2021 from 5,850 active listings last year to 3,075 last month. Condominium inventory decreased 46.8% to 3,251 from 6,109 listings during the same period in 2020.
Months supply of inventory for single-family homes decreased 58.1% to 1.8 months, which indicates a seller’s market. Inventory for existing condominiums decreased 59.3% to 2.4 months, which indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months supply of inventory is down since July 2019 for single-family, reflecting strong demand.
Total active listings at the end of May 2021 decreased 47.1% year-over-year, from 11,959 to 6,326.
New listings of Palm Beach single-family homes increased 7.1% to 2,069 from 1,931. New listings of condominiums increased 4.4%, from 1,716 to 1,791.
Nationally, total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.
Palm Beach Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 99.5% in May 2021, up 4.7% from 95% last year. The median percent of original list price received for existing condominiums was 96.8%, up 4.6% from 92.5% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 11 days, a 70.3% decrease from 37 days last year.
The median number of days between the listing date and closing date for condos was 22 days, down 57.7% from 52 days. The median number of days to sale for condos was 67 days, a 28.7% decrease from 94 days.
The median time to sale for single-family homes was 58 days, a 31% decrease from 84 days last year. The median time to sale for single-family homes was 58 days, a 31% decrease from 84 days last year.
Palm Beach Cash Sales More than Double National Figure
Cash sales represented 53.2% of Palm Beach closed sales in May 2021, compared to 38.9% in April 2020. About 23 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 can buy more with their profits from real estate sales.
Cash sales accounted for 62.3% of all Palm Beach existing condo sales and 44.2% of single-family transactions.
To access May 2021 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 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