MIAMI — Palm Beach County real estate recorded its 7th-best condo sales year ever in 2022 and annual total sales finished No. 9 all-time in county history, according to 2022 year-end and December 2022 statistics released today by the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“Palm Beach County real estate is more resilient versus rising mortgage rates than other markets because our region has a high percentage of cash buyers, high migration, strong employment and more,” JTHS-MIAMI President Martha Gillespie-Beeman said.
The 30-year fixed mortgage rate, which started 2022 at 3% and peaked at 7.375% on Oct. 20, 2022, sits at 6.11% today. Sales data is sensitive to mortgage rates movements, but it is important to note that December 2022 statistics don’t reflect these lower rates as December 2022 purchases were agreed to in October and November when rates were higher.
“Inflation is tapering and that will push mortgage rates to 5% – 5.5% by year-end,” MIAMI REALTORS® Chief Economist Gay Cororaton said. “Homebuyers who decide to buy in 2023 will find relatively more supply in the market and face less buyer competition. Expect a more active housing market in the second half as those properties start to get snapped up.”
Palm Beach’s 7th-Best Condo Sales Year Ever
Palm Beach County real estate sold 13,720 condos in 2022, 7th-most in history. Palm Beach sold 15,118 single-family homes in 2022, 9th-most in history.
For total annual sales, Palm Beach County sold 28,838 total homes (or 79 transactions per day) in 2022. That’s ninth all-time in Palm Beach County history. 2021 is first with 37,447 sales.
When looking at monthly sales, Palm Beach County December 2022 sales decreased 40.2% year-over-year, from 3,062 to 1,830. Transactions decreased because it is in comparison to a historic December 2021, today’s mortgage rates have doubled vs. 12 months ago and the market has low inventory in specific price points.
While overall inventory is on the rise, most of the growth in listings is at the top end or luxury segment of the market. Palm Beach single-family inventory in the $400K to $600K price range, for example, is at 2.4 months of supply, well below a balanced market (6 months).
In fact, Palm Beach County active listings are still down 37% versus pre-pandemic numbers (year-end 2022 vs year-end 2019).
Single-family home sales decreased 37.6% year-over-year, from 1,601 in record-breaking December 2021 to 999 in December 2022, due to lack of inventory and rising mortgage rates. Palm Beach existing condo sales decreased 43.1% year-over-year, from 1,461 record-breaking December 2021 to 831 in December 2022, due to lack of inventory and rising mortgage rates.
December 2021 sales surged so high because of historic-low mortgage rates and pandemic-fueled homebuying. Mortgage rates averaged near 3% in December 2021.
The Fed, which has made multiple hikes to the fed funds rate, 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.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage 6.15% as of January 19. That’s down from 6.33% last week, but up from 3.56% one year ago.
South Florida’s Real Estate’s Strong In-Migration & Other Market Fundamentals
- Homebuyers from high-tax, high-density states continue moving to South Florida. South Florida out-of-state driver license exchanges remain up double digits for relocating New Yorkers, Californians, New Jerseyans and more, according to Q3 2022 data from Florida Department of Highway Safety and Motor Vehicles (FLHSMV).
- Florida: fastest-growing state for the first time since 1957 (1,142 net new residents per day in 2022 per U.S. Census)
- Global companies continue relocating to South Florida, such as Citadel, a multinational hedge fund that manages $57 billion in assets and is developing a $1 billion Miami office tower with plans to have 1,500 employees in 10 years.
- South Florida has one of the strongest job markets in the country, with 2% unemployment– lower than the national figure.
- South Florida prices keep rising unlike many other major markets and homes keep selling fast (36 days on average).
- Global buyers are returning in mass to America’s top international market. Foreign homebuyers purchased $6.8 billion of South Florida residential properties in 2022, up 34% from $5.1 billion in 2021, according to our 2022 MIAMI REALTORS® Global Study.
- Palm Beach’s percentage of cash buyers (51.3%) is significantly higher than the national average (28%).
- Distressed sales are statistically insignificant, reflecting a healthy market.
- Demographic shifts (Millennials reaching prime home-buying age and surging senior/retiree population growth)
- Expansion of remote work benefits South Florida because if you can work wherever why wouldn’t you want to live in sunny South Florida with the region’s unique lifestyle?
South Florida Home Prices Are Lower Than Many Other U.S. Metros
Miami-Fort Lauderdale-West Palm Beach’s median home price ($570,000) is significantly lower than many other major markets such as San Francisco-Oakland-Hayward, CA ($1.3 million), San Diego-Carlsbad, CA ($900,000), Los Angeles-Long Beach-Glendale, CA ($893,200), Seattle-Tacoma-Bellevue, WA ($741,300), Boston-Cambridge-Newton, MA-NH ($698,900), Denver-Aurora-Lakewood, CO ($666,000), New York-Jersey City-White Plains, NY-NJ ($616,300), and Washington-Arlington-Alexandria, DC-VA-MD-WV ($581,300), according to NAR’s Q3 2022 Metropolitan Media Area Prices report.
Palm Beach County single-family home median prices increased 3.8% year-over-year in December 2022, increasing from $525,000 to $545,000. Existing condo median prices increased 14% year-over-year, from $263,125 to $300,000.
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 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 (3.2 months) and condos (3.1 months) are low. Also, one of the supports for home prices is rents and rents are up.
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 Total Active Listings Rise for Sixth Consecutive Month
Total active listings at the end of December 2022 increased 109.8% year-over-year, from 3,597 to 7,545.
Inventory of single-family homes increased 120.6% year-over-year in December 2022 from 1,832 active listings last year to 4,042 last month. Condominium inventory increased 98.5% year-over-year to 3,503 from 1,765 listings during the same period in 2021.
New listings of Palm Beach single-family homes decreased 17.9% to 1,076 from 1,311. New listings of condominiums increased 98.5%, from 1,765 to 3,503.
Months’ supply of inventory for single-family homes increased 190.9% to 3.2 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums increased 158.3% to 3.1 months, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Nationally, total housing inventory at the end of December was 970,000 units, which was down 13.4% from November but up 10.2% from one year ago (880,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, down from 3.3 months in November but up from 1.7 months in December 2021.
Palm Beach Real Estate Posts $205.8 Million Local Economic Impact in December 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 1,830 homes in December 2022 and had a local economic impact of $205.8 million.
Palm Beach total dollar volume totaled $1.2 billion in December 2022. Single-family home dollar volume decreased 48.91% year-over-year, from $1.6 billion to $824 million. Condo dollar volume decreased 36.94% year-over-year, from $633 million to $399 million.
Palm Beach Distressed Sales Remain Low, Reflecting Healthy Market
Only 0.5% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 0.7% in December 2021.
Short sales and REOs accounted for 0% and 0.5% year-over-year, respectively, of total Palm Beach sales in December 2022.
Palm Beach’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented approximately 1% of sales in December, virtually unchanged from one year ago.
Palm Beach’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 19,158 in December 2022, down 36.1% year-over-year, while existing condo-townhouse sales totaled 7,677, down 40%. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions decreased 1.5% from November to a seasonally adjusted annual rate of 4.02 million in December. Year-over-year, sales sagged 34.0% (down from 6.09 million in December 2021).
The statewide median sales price for single-family existing homes was $395,000, up 5.6% 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 $310,000, up 8.8% 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 for all housing types in December was $366,900, an increase of 2.3% from December 2021 ($358,800), as prices rose in all regions. This marks 130 consecutive months of year-over-year increases, the longest-running streak on record.
Palm Beach Real Estate Attracting Near List Price
The median percent of original list price received for single-family homes was 93.3% in December 2022, down 6.1% from 99.4% last year. The median percent of original list price received for existing condominiums was 95.6%, down 3.2% from 98.8% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 36 days, up from 14 days last year. The median time to sale for single-family homes was 77 days, a 30.5% increase from 59 days last year.
The median number of days between the listing date and contract date for condos was 27 days, up 92.9% from 14 days. The median number of days to sale for condos was 67 days, up from 53 days last year.
Palm Beach Cash Sales More than Double the National Figure in December 2022
Cash sales represented 51.3% of Palm Beach closed sales in December 2022, compared to 50.4% in December 2021. About 28% 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 58% of all Palm Beach existing condo sales and 45.7% of single-family transactions.
To access December 2022, Year-end 2022 and 4Q 2022 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 (MIAMI) was chartered by the National Association of Realtors in 1920 and is celebrating 103 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 242 international organizations worldwide. 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