MIAMI — Palm Beach County single-family luxury home sales rose for the second consecutive month in September 2022 as total inventory increased for the third straight month, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“After two record years for home sales, the Palm Beach real estate market is inching toward equilibrium and adding more inventory,” JTHS-MIAMI President Brad Westover said.
Palm Beach County Single-Family Luxury Home Sales Increase Again
Palm Beach County single-family luxury homes, priced at $1-million-and-above, increased 14% year-over-year to 212 transactions. The jump corresponds to a 30.9% jump in new listings by initial listing price at that price range.
As far total sales compared to a record September 2021, Palm Beach County September 2022 transactions decreased 25.5% year-over-year, from 2,830 to 2,109, because of rising mortgage rates and low inventory.
Palm Beach single-family home sales decreased 19.3%, from 1,450 to 1,170. Palm Beach condo transactions declined 32%, from 1,380 to 939.
Fed, which voted for another Fed Funds rate increase in September, 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 2.99% to 6.92% in the last 52 weeks, an unprecedented range of volatility.
September 2022 marks the seventh 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 6.11% in September, up from 5.22% in August. The average commitment rate across all of 2021 was 2.96%.
South Florida’s Real Estate’s Strong Market Fundamentals Vs. High Rates, Low Inventory
- Global companies, such as the $54 billion-dollar hedge fund Citadel, continue relocating to South Florida, bringing high-paying jobs.
- Demand from homebuyers from high-tax, high-density states remain high as Florida driver license swaps are up double digits for relocating Californians and New Yorkers.
- Global buyers, who because of pandemic protocols haven’t been able to purchase as they are accustomed to in recent years, are returning in mass to the No. 1 destination for global homebuyers. This month, South Florida was ranked as the 1 destination in the world for foreign investment by Financial Times.
- Palm Beach’s percentage of cash buyers (48.5%) is significantly higher than the national average (22%).
- Demographic shifts (Millennials reaching prime home-buying age and surging senior/retiree population growth)
- High percentage of workforce working remotely favors the South Florida market, where many have relocated to live, work and play because of our lifestyle, weather and more.
South Florida: A Bargain in Comparison to Other Global Cities & U.S. Metros
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.
Palm Beach County single-family home median prices increased 23.4% year-over-year in September 2022, increasing from $469,900 to $580,000. Existing condo median prices increased 17.6% year-over-year, from $246,500 to $290,000.
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 (2.9 months) and condos (2.2 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
Locally, the greater share of South Florida 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 Third Consecutive Month
Inventory of single-family homes increased 67.8% year-over-year in September 2022 from 2,370 active listings last year to 3,977 last month. Condominium inventory increased 38.1% year-over-year to 2,806 from 2,032 listings during the same period in 2021.
New listings of Palm Beach single-family homes decreased 9.5% to 1,562 from 1,726. New listings of condominiums decreased 22.6%, from 1,530 to 1,184.
Months’ supply of inventory for single-family homes increased 107.1% to 2.9 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums increased 57.1% to 2.2 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 September 2022 increased 54.1% year-over-year, from 4,402 to 6,783.
Nationally, total housing inventory at the end of September was 1.25 million units, which was down 2.3% from August and 0.8% from the previous year. Unsold inventory sits at a 3.2-month supply at the current sales pace – unchanged from August and up from 2.4 months in September 2021.
Palm Beach Real Estate Posts $237 Million Local Economic Impact in September 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 2,109 homes in September 2022 and had a local economic impact of $237 million.
Palm Beach total dollar volume totaled $1.4 billion in September 2022. Single-family home dollar volume decreased 12.6% year-over-year, from $1.2 billion to $1 billion. Condo dollar volume decreased 24.1% year-over-year, from $488.8 million to $370.9 million.
Palm Beach Distressed Sales Remain Low, Reflecting Healthy Market
Total Palm Beach distressed sales decreased 50% in September 2022, from 24 to 12. Short sales and REOs accounted for 0.1% and 0.4% year-over-year, respectively, of total Palm Beach sales in September 2022. Short sale transactions decreased 70% year-over-year while REOs decreased 35.7%.
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 September 2021.
Palm Beach’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented approximately 2% of sales in September, a marginal increase from 1% in September 2021.
Palm Beach’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 20,099 in September 2022, down 29% year-over-year, while existing condo-townhouse sales totaled 8,406, down 29%. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions retracted 1.5% from August to a seasonally adjusted annual rate of 4.71 million in September. Year-over-year, sales waned by 23.8% (down from 6.18 million in September 2021).
The statewide median sales price for single-family existing homes was $403,880, up 13.8% 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 $307,250, up 20.5% 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 for all housing types in September was $384,800, an 8.4% jump from September 2021 ($355,100), as prices climbed in all regions. This marks 127 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 95.4% in September 2022, down 3.9% from 99.3% last year. The median percent of original list price received for existing condominiums was 96.6%, down 1.3% from 97.9% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 22 days, up from 14 days last year. The median time to sale for single-family homes was 67 days, a 17.5% increase from 57 days last year.
The median number of days between the listing date and contract date for condos was 20 days, up 17.6% from 17 days. The median number of days to sale for condos was 62 days, a 3.3% decrease from 60 days.
Palm Beach Cash Sales More than Double the National Figure in September 2022
Cash sales represented 48.53% of Palm Beach closed sales in September 2022, compared to 48.2% in September 2021. About 22% 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 41.5% of single-family transactions.
To access September 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 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