MIAMI — Palm Beach County existing condo sales increased in September 2021 as pent-up demand, more U.S. individuals and companies moving to South Florida, 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 decreased 5.7% year-over-year in September 2021, from 3,001 sales to 2,830. Palm Beach single-family home transactions decreased 16.9%, from 1,744 to 1,440. Record-low inventory, rather than a decline in demand, slowed down Palm Beach single-family home sales. Palm Beach existing condo sales increased 9.8%, from 1,257 to 1,380.
“As is the case throughout South Florida, existing condo sales continue surging in Palm Beach County,” JTHS-MIAMI President Bill Mate said. “Sales were on the rise before the pandemic. The pandemic and the increase availability of remote work shined a spotlight on South Florida’s incredible pro-business and live-work-play lifestyle.”
Relocating Homebuyers, Companies Surge Demand for Palm Beach County Condos
Nearly every week brings another announcement of a major U.S. company either moving their headquarters to South Florida or opening offices here.
With so many U.S. companies and individuals relocating to our region over the last year, many of those relocating homebuyers are taking advantage of the condo inventory. International homebuyers, who have long preferred condos, have pent-up demand for South Florida real estate and are also returning to the No. 1 market for foreign homebuyers.
Palm Beach existing condo sales are up in all price ranges in September 2021, with major transaction increases in properties selling at $250K and above.
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. More inventory is expected to come to the market in 2022 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 Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Palm Beach County single-family luxury ($1-million-and-up) transactions increased 3.9% year-over-year to 186 sales in September 2021. Palm Beach existing condo luxury ($1-million-and-up) sales increased 18.6% year-over-year to 70 transactions.
There are 3.3 months of supply in luxury single-family homes; 3 months of supply in luxury condos. 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.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are also coming here for the vaccine and purchasing property. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures.
Palm Beach single-family homes priced between $400K to $600K increased 4.6% year-over-year to 478 transactions in September 2021. Palm Beach existing condo sales priced between $400K to $600K increased 66.3% to 148 transactions.
More Inventory Expected to Arrive in 2022 for Low-Supply/High-Demand Market
New listings of Palm Beach single-family homes decreased 12.7% to 1,726 from 1,978. New listings of condominiums decreased 12.5%, from 1,748 to 1,530.
Inventory of single-family homes decreased 42.8% year-over-year in September 2021 from 4,141 active listings last year to 2,370 last month. Condominium inventory decreased 62% year-over-year to 2,032 from 5,348 listings during the same period in 2020.
Months’ supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months’ supply of inventory for single-family homes decreased 51.7% to 1.4 months, which indicates a seller’s market. Inventory for existing condominiums decreased 72.5% to 1.4 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 September 2021 decreased 53.6% year-over-year, from 9,489 to 4,402.
Nationally, total housing inventory at the end of September amounted to 1.27 million units, down 0.8% from August and down 13.0% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the present sales pace, down 7.7% from August and down from 2.7 months in September 2020.
Palm Beach Homeowners’ Home Equity Continues Surging 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 prices increased 17.5% year-over-year in September 2021, increasing from $400,000 to $469,900. Existing condo median prices increased 19.5% year-over-year, from $206,250 to $246,500.
The greater share of Palm Beach luxury sales in 2021 compared to a year ago 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.
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 2.90% in September, up from 2.84% in August. The average commitment rate across all of 2020 was 3.11%.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Miami remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to Knight Frank’s 2021 The Wealth Report. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer significantly less prime land for $1 million.
Palm Beach Dollar Volume Totals $1.6 Billion, Showcasing Impact Housing Plays in Local 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. Broward dollar volume showcases the impact housing plays in the local economy.
Palm Beach total dollar volume totaled $1.6 billion in September 2021. Single-family home dollar volume increased 0.6% year-over-year, from $1.14 billion to $1.15 billion. Condo dollar volume increased 17.1% year-over-year, from $417 million to $488 million.
Palm Beach Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 0.8% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 1.9% in September 2020.
Total Palm Beach distressed sales decreased 59.3% year-over-year in September 2021, from 59 to 24. Short sales and REOs accounted for 0.4% and 0.5% year-over-year, respectively, of total Palm Beach sales in September 2021. Short sale transactions decreased 9.1% year-over-year while REOs decreased 70.8%.
Nationally, distressed sales represented less than 1% of sales in September, equal to the percentage seen a month prior and equal to September 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, rose 7.0% from August to a seasonally adjusted annual rate of 6.29 million in September. However, sales decreased 2.3% from a year ago (6.44 million in September 2020).
Statewide, closed sales of single-family homes in September totaled 28,302, down 1.3% year-over-year, while existing condo-townhouse sales totaled 11,845, up 4.9% over September 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 September was $352,800, up 13.3% from September 2020 ($311,500), as prices rose in each region. This marks 115 straight months of year-over-year increases.
The statewide median sales price for single-family existing homes in September was $355,000, up 18.3% 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 $255,000, up 17.2% over September 2020. The median is the midpoint; half the homes sold for more, half for less.
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 99.3% in September 2021, up 2.9% from 96.5% last year. The median percent of original list price received for existing condominiums was 97.9%, up 3.2% from 94.9% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 14 days, a 48.1% decrease from 27 days last year. The median time to sale for single-family homes was 57 days, a 23% decrease from 74 days last year.
The median number of days between the listing date and contract date for condos was 17 days, down 51.4% from 35 days. The median number of days to sale for condos was 60 days, a 24.1% decrease from 79 days.
Palm Beach Cash Sales More than Double National Figure in September 2021
Cash sales represented 48.2% of Palm Beach closed sales in September 2021, compared to 38.7% in September 2020. About 23% 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 58% of all Palm Beach existing condo sales and 38.8% of single-family transactions.
To access September 2021 Palm Beach 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