September Home Sales in North Palm Beach Up Another 8%
Father Time does keep marching on and it is so hard to believe that Friday we will be into November with Thanksgiving just around the corner. Already we see multitudes of our winter visitors and their cars arriving as the beaches, bars and restaurants are quickly filling up. Welcome back!
The real estate market has gone through changes since our visitors left us in May with limited well priced inventory continuing to be a problem for buyers. Interest rates have pulled back, the unemployment rate is back down to a 5 year low and our leaders in Washington have delayed any substantive talks to deal with our debt issue until after the first of the year. Locally home prices have leveled off as we still see double digit year over year gains but the month over month numbers show very little change.
While more and more transactions are being settled for cash the ability for borrowers to qualify for loans has improved as lenders are accepting lower credit scores and smaller down payments. Right now the average FICO score on a closed home loan is 732 and over 30% of all loans went to those with sub 700 scores. This is down from the 750 average score we saw a year ago. While underwriting is still a frustrating process banks are trying to approve more loans as the re-financing activity has all but dried up so banks are getting creative with loans once again trying to drive business.
Everybody agrees that real estate has been the driving force behind the economic recovery we have seen and historic low rates were a huge factor in the recovery. Everyone was a buyer again with investors adding to the fury purchasing at least 20% of all properties sold in Palm Beach County over the past year. Sellers have raised their prices as inventory levels continue to shrink. But the market is always moving and as overpriced inventory sits stagnant we have seen the overall selection improve with stabilization in the overall inventory for two straight months.
As quickly as they had been buying buyers started hitting the brakes and we have seen sales slow in the northern Palm Beach County region both in July and August and something in the air just feels a bit different. Is demand slowing just because sellers are asking too much and buyers aren’t going to overpay with the last bubble still fresh in their mind?
Once again it is time to take a deeper look in to sales levels of single family homes in the north county region to see if the recent slide in closings will continue. Home sales in North Palm Beach and the neighboring communities started to level off in July so let’s see what transpired during the month ended October 1st.
North Palm Beach – up 8%
Hobe Sound – down 7%
Palm Beach Gardens – down 24%
Jupiter – down 29%
Tequesta – down 32%
Last month in this column we reported that 60% of our reporting communities showed weaker sales with a spread of 72.5% between the best and worst performing municipalities. That was a huge spread but if we throw out the strong numbers reported by North Palm Beach sales were really down across the board with a spread of 10%. This month we have 80% of our communities showing a decline in sales but this month the spread shrank to 40% which still shows volatility. This volatility points to inventory still a major contributor to sales numbers but this months drop when you consider inventory stabilization is significant.
We end this months report with home sales in North Palm Beach that moved higher by 8% on the heels of last month’s huge jump of 62.5%. During the month of September a total of 14 North Palm Beach single family homes sold compared with 13 during the previous month. With this showing we did stay above the 12 month average sales volume which currently stands at 12. On a “seasonal” note home sales in North Palm Beach were also higher than the 11 sales we had in the same month in 2012.
As we saw sales volume increase in North Palm Beach we saw the heaviest activity in homes priced between $150,001 and $300,000 with 8 sales representing 57% of the market. With this showing the median sales price fell to $233,750 down 14% from last months number of $272,000. We also did fall below the 12 month average which now stands at $334,712. From a “seasonal” perspective we also remained much lower than the median sales price from September of last year which came in at $565,000.
It has been a while since we were at such an important crossroad and the next month will help us determine where this market is headed. Fins up until November………..