MIAMI — Palm Beach County single-family luxury home sales and total inventory increased for the second consecutive month in August 2022, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“More opportunities for Palm Beach real estate and Palm Beach County market buyers are hitting the market as inventory is on the rise,” JTHS-MIAMI President Brad Westover said.
Palm Beach County Single-Family Luxury Home Sales Increase
Palm Beach County single-family luxury homes, priced at $1-million-and-above, increased 1.8% year-over-year to 228 transactions. The jump corresponds to a 47.9% jump in new listings by initial listing price at that price rage.
Local demand remains fueled by major companies such as hedge fund and securities firm Citadel moving to South Florida, the return of global buyers, demographic shifts with rising millennial homebuyer and senior populations, high percentage of workforce working remotely, surging rental prices and more.
As for total sales compared to a record August 2021, August 2022 total home sales decreased 24.8% year-over-year, from 3,072 to 2,310.
Palm Beach single-family home sales decreased 20.4% year-over-year, from 1,624 in record-breaking August 2021 to 1,292 in August 2022, due to lack of inventory and rising mortgage rates. Palm Beach existing condo sales decreased 29.7% year-over-year, from 1,448 record-breaking August 2021 to 1,018 in August 2022, due to lack of inventory and rising mortgage rates.
In August 2021, Palm Beach sales surged to a record-high because of 3% mortgage rates, higher supply (particularly in condos) and pandemic-driven demand.
In August 2022, Palm Beach sales were impacted by higher rates of 5-6% when contracts were established in May and June and lower inventory.
The Fed, which voted for another increase to the Fed Funds rate today, is intent on slowing 40-year high inflation. While the Fed doesn’t set mortgage rates, it affects them through its conduct of monetary policy. As a result, the 30-year fixed mortgage rate has fluctuated from 2.93% to 6.28% in the last 52 weeks, an unprecedented range of volatility.
September 2022 marks the sixth consecutive month of 5% or higher mortgage rates. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.22% in August, down from 5.41% in July. The average commitment rate across all of 2021 was 2.96%.
South Florida: A Bargain in Comparison to Other Global Cities & U.S. Metros
Palm Beach County single-family home median prices increased 17.7% year-over-year in August 2022, increasing from $480,000 to $565,000. Existing condo median prices increased 25.4% year-over-year, from $232,000 to $291,000.
Miami-Fort Lauderdale-West Palm Beach’s price per square meter is $3,170, far below at least 30 global cities and 13+ U.S. Metros including markets such as Hong Kong ($28,570), New York City ($17,191), San Francisco-Oakland-Hayward, CA ($8,250), Madrid, Spain ($6,173), Los Angeles-Long Beach-Glendale, CA ($4,740) and Seattle-Tacoma-Bellevue, WA ($4,460), according to National Association of REALTORS Profile of International Transactions in U.S. Residential Real Estate 2022.
While median prices have increased nationally so has house-buying power because of a long-run decline in rates before March 2022 and the slow, but steady growth of household income. West Palm Beach (No. 5) and Miami (No. 6) ranked among the Top-10 U.S. metros where homebuyer income grew the most during the pandemic via Aug. 2022 Redfin report.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Inventory for Palm Beach single-family homes (2.7 months) and condos (2.1 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
Locally, the greater share of Palm Beach luxury sales is also part of the reason for the large year-over-year increase in median prices.
Palm Beach County Total Inventory Rises for Second Consecutive Month
Inventory of single-family homes increased 63.1% year-over-year in August 2022 from 2,369 active listings last year to 3,865 last month. Condominium inventory increased 28.3% year-over-year to 2,768 from 2,157 listings during the same period in 2021.
New listings of Palm Beach single-family homes increased 0.2% to 1,709 from 1,706. New listings of condominiums decreased 9.1%, from 1,514 to 1,376.
Months’ supply of inventory for single-family homes increased 92.9% to 2.7 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums increased 40% to 2.1 months, which also 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 August 2022 increased 46.6% year-over-year, from 4,526 to 6,633.
Nationally, total housing inventory at the end of August was 1,280,000 units, a decrease of 1.5% from July and unchanged from the previous year. Unsold inventory sits at a 3.2-month supply at the current sales pace – identical to July and up from 2.6 months in August 2021.
Palm Beach Real Estate Posts $259.8 Million Local Economic Impact in August 2022
Every time a home is sold it impacts the economy: income generated from real estate industries (commissions, fees and moving expenses), expenditures related to home purchase (furniture and remodeling expenses), multiplier of housing related expenditures (income earned as a result of a home sale is re-circulated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $112,500, according to NAR. Palm Beach County sold 2,310 homes in August 2022 and had a local economic impact of $259.8 million.
Palm Beach total dollar volume totaled $1.5 billion in August 2022. Single-family home dollar volume decreased 13.1% year-over-year, from $1.3 billion to $1.1 billion. Condo dollar volume decreased 19.59% year-over-year, from $517 million to $416 million.
Palm Beach Distressed Sales Remain Low, Reflecting Healthy Market
Total Palm Beach distressed sales decreased 37.5% year-over-year in August 2022, from 24 to 15. Short sales and REOs accounted for 0% and 0.6% year-over-year, respectively, of total Palm Beach sales in August 2022. Short sale transactions decreased 100% year-over-year while REOs stayed even.
Only 0.6% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 0.8% in August 2021.
Palm Beach’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented approximately 1% of sales in August, essentially unchanged from July 2022 and August 2021.
Palm Beach’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 24,877, down 15.8% year-over-year, while existing condo-townhouse sales totaled 10,000, down 20.3% over 12,550 in August 2021. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, notched a minor contraction of 0.4% from July to a seasonally adjusted annual rate of 4.80 million in August. Year-over-year, sales faded by 19.9% (5.99 million in August 2021).
The statewide median sales price for single-family existing homes was $407,000, up 15% 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 $305,000, up 20.8% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home price all housing types in August was $389,500, a 7.7% jump from August 2021 ($361,500), as prices ascended in all regions. This marks 126 consecutive months of year-over-year increases, the longest-running streak on record.
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 96.8% in August 2022, down 3.2% from 100% last year. The median percent of original list price received for existing condominiums was 97.1%, down 0.6% from 97.7% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 18 days, up from 11 days last year. The median time to sale for single-family homes was 58 days, a 1.8% increase from 57 days last year.
The median number of days between the listing date and contract date for condos was 17 days, up 6.3% from 16 days. The median number of days to sale for condos was 56 days, a 6.7% decrease from 60 days.
Palm Beach Cash Sales Double National Figure in August 2022
Cash sales represented 48.2% of Palm Beach closed sales in August 2022, compared to 48.3% in August 2021. About 24% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates. 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 57.3% of all Palm Beach existing condo sales and 41.1% of single-family transactions.
To access August 2022 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 (MIAMI) was chartered by the National Association of Realtors in 1920 and is celebrating 102 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations: MIAMI RESIDENTIAL, MIAMI COMMERCIAL; BROWARD-MIAMI, a division of MIAMI Realtors; JTHS-MIAMI, a division of MIAMI Realtors in the Jupiter-Tequesta-Hobe Sound area; MIAMI YPN, our Young Professionals Network Council; and the award-winning MIAMI Global Council. MIAMI REALTORS represents nearly 60,000 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 230 international organizations worldwide. The MIAMI Commercial Conference will be held Oct. 7, 2022 at the Biltmore Hotel in Coral Gables and the 26th annual MIAMI Global Real Estate Congress will be held Nov. 6-8, 2022 at the Biltmore Hotel in Coral Gables. MIAMI REALTORS has launched its new YPN Global and will host the first-ever YPN Global Congress on Feb. 12-15, 2023, in Dubai. MIAMI has been selected to host the prestigious FIABCI World Congress on June 5-9, 2023. MIAMI’s official website is www.MiamiRealtors.com