Record-low mortgage rates, increased demand for living space, Florida’s low taxes, low inventory, purchases from home buyers in tax-burdened states, and increased interest from international buyers are boosting Palm Beach real estate
MIAMI (PRWEB) January 22, 2021
Palm Beach County total home sales surged in December 2020 as robust pent-up demand and record-low mortgage rates fueled transactions, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Palm Beach County total home sales jumped 16.5% year-over-year, from 2,642 to 3,079. Palm Beach single-family home sales jumped 25.6% year-over-year, from 1,420 to 1,784. Palm Beach existing condo transactions increased 6% year-over-year, from 1,22 to 1,295. Palm Beach single-family home sales have now posted year-over-year increases for six consecutive months and Palm Beach existing condos have posted transaction gains for six straight months.
“Record-low mortgage rates, increased demand for living space, Florida’s low taxes, low inventory, purchases from home buyers in tax-burdened states, and increased interest from international buyers are boosting Palm Beach real estate,” JTHS-MIAMI President Bill Mate said.
Japan, Mexico, Argentina, Colombia, Brazil, Canada and Italy are the top foreign countries who purchased in South Florida in December 2020, according to MLS data.
Palm Beach County year-to-date December home sales have already exceeded last year’s total despite the four-month interruption caused by the pandemic. Year-to-date dollar volume has also already exceeded the 2019 total.
Months supply of inventory for single-family homes is at 2.3 months. The lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply.
Palm Beach Luxury Home Sales Surge 167% in December 2020
Palm Beach County single-family luxury ($1-million-and-up) transactions jumped 167% year-over-year to 235 sales in December 2020. Palm Beach existing condo luxury ($1-million-and-up) sales increased 64.6% year-over-year to 79 transactions.
Palm Beach single-family homes priced between $400K to $600K surged 54.9% year-over-year to 505 transactions in December 2020. Palm Beach existing condo sales priced between $400K to $600K increased 56.3% to 136 transactions.
Record-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.
Strong Price Appreciation in Palm Beach
Strong demand coupled with limited supply continue to drive price appreciation in Palm Beach.
Palm Beach County single-family home prices increased 16.8% year-over-year in December 2020, increasing from $364,000 to $425,000. Existing condo prices increased 21.1% year-over-year, from $189,900 to $230,000.
Single-Family Home and Condo Dollar Volume Increases
Single-family home dollar volume increased 117.4% year-over-year, from $702.5 million to $1.5 billion. Condo dollar volume increased 13.9% year-over-year, from $438.2 million to $499.2 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.68% in December, down from 2.77% in November. The average commitment rate across all of 2020 was 3.11%.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, are expected to generate increased homeownership opportunities.
Palm Beach Distressed Sales Stay Low, Reflecting Healthy Market
Only 1.1% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 3.3% in December 2019.
Total Palm Beach distressed sales decreased 61.4%, from 88 to 34.
Short sales and REOs accounted for 0.2% and 0.9% year-over-year, respectively, of total Palm Beach sales in December 2020. Short sale transactions decreased 30% year-over-year while REOs decreased 64%.
Nationally, distressed sales represented less than 1% of sales in December, down from 2% in December 2019.
Palm Beach Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 96.8% in December, up 1.6% from 95.3% last year. The median percent of original list price received for existing condominiums was 94.7%, up 0.4% from 94.3% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 28 days, a 34.9% decrease from 43 days last year. The median number of days between the listing date and closing date for condos was 43 days, down 4.4% from 45 days.
The median time to sale for single-family homes was 71 days, a 12.3% decrease from 81 days last year. The median number of days to sale for condos was 81 days, a 4.7% decrease from 85 days.
National and State Statistics
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.7% from November to a seasonally-adjusted annual rate of 6.76 million in December. Sales in total rose year-over-year, up 22.2% from a year ago (5.53 million in December 2019).
In December, closed sales of single-family homes statewide totaled 30,478, up 21% year-over-year, while existing condo-townhouse sales totaled 12,752, up 27.7% over December 2019. 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 December was $309,800, up 12.9% from December 2019 ($274,500), as prices increased in every region. December’s national price increase marks 106 straight months of year-over-year gains.
The statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year in December for 108 consecutive months. The statewide median sales price for single-family existing homes was $309,000, up 14.4% 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 $230,000, up 13.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Palm Beach’s Cash Buyers Top National Figure
Palm Beach cash transactions comprised 42.2% of December 2020 total closed sales, compared to 42.6% last year. The national figure for cash buyers is 19%.
Palm Beach’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Palm Beach’s cash purchases as 53.1% of condo closings were made in cash in December 2020 compared to 34.4% of single-family home sales.
Seller’s Market for Single-Family Homes, Buyer’s Market for Condos
Inventory of single-family homes decreased 42.4% in December from 6,162 active listings last year to 3,551 last month. Condominium inventory decreased 12.8% to 5,140 from 5,892 listings during the same period in 2019.
Months supply of inventory for single-family homes decreased 45.2% to 2.3 months, which indicates a seller’s market. Inventory for existing condominiums decreased 13.2% to 4.6 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 December decreased 27.9% year-over-year, from 12,054 to 8,691. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Palm Beach single-family homes increased 6.9% to 1,491 from 1,395. New listings of condominiums increased 6.4%, from 1,382 to 1,471.
Nationally, total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.
To access December 2020 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 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 http://www.MiamiRealtors.com