1 of every 2 home purchases in Palm Beach County are all cash transactions in October
According to the Miami Association of Realtors, Palm Beach County real estate broke its record for the most annual condo sales in only 10 months as October 2021 sales totals pushed the market over the old standard.
Palm Beach County total home sales decreased 13.1% year-over-year in October 2021, from 3,233 sales to 2,809 because of lack of inventory and Covid19 comps (stats are in comparison to major rebound demand last year). Palm Beach single-family home transactions decreased 19.1%, from 1,818 to 1,471. Palm Beach existing condo sales decreased 5.4%, from 1,415 to 1,338.
Year-to-date, Palm Beach County has registered 15,189 existing condo sales in 10 months, which surpasses the previous annual record of 14,435 transactions in the entire year of 2013.
"Homebuyers in high-density, high-tax markets continue purchasing homes in Palm Beach County," JTHS-MIAMI President Bill Mate said. "The South Florida lifestyle, the low taxes, the pro-government structure, the new jobs and industries that are migrating here are all contributing to a high-demand, low-supply market."
Palm Beach Luxury Market in Demand as Northeast and West Coast Buyers Move to Mega Region
Palm Beach County single-family luxury ($1-million-and-up) transactions decreased 5.1% year-over-year to 204 sales in October 2021. Palm Beach existing condo luxury ($1-million-and-up) sales stayed even year-over-year at 54 transactions.
There are 3.2 months of supply in luxury single-family homes; 3.1 months of supply in luxury condos. Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
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.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are coming here for the vaccine and purchasing property.
Vaccinated foreigners were allowed to resume travel to the U.S. starting on Nov. 8 and that will lead to more international investment in South Florida - the No. 1 destination for foreign buyers. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures.
Palm Beach single-family homes priced between $400K to $600K decreased 7.6% year-over-year to 477 transactions in October 2021. Palm Beach existing condo sales priced between $400K to $600K increased 19.8% to 151 transactions.
Low-Supply/High-Demand Market for Palm Beach Real Estate
There is always a seasonal fade in inventory in the fall and winter. More inventory is expected to come to the market in 2022 as potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
New listings of Palm Beach single-family homes decreased 17.3% to 1,694 from 2,049. New listings of condominiums decreased 16.6%, from 1,810 to 1,509.
Inventory of single-family homes decreased 46.5% year-over-year in October 2021 from 4,131 active listings last year to 2,212 last month. Condominium inventory decreased 64.4% year-over-year to 1,917 from 5,388 listings during the same period in 2020.
Months' supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months' supply of inventory for single-family homes decreased 53.6% to 1.3 months, which indicates a seller's market. Inventory for existing condominiums decreased 74% to 1.3 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 October 2021 decreased 56.6% year-over-year, from 9,519 to 4,129
Nationally, total housing inventory at the end of October amounted to 1.25 million units, down 0.8% from September and down 12.0% from one year ago (1.42 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, equal to September's supply, and down from 2.5 months in October 2020.
Palm Beach Homeowners' Home Equity Continues Surging as Many Pay Lower Mortgage Payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So not only are many homeowners paying lower mortgage payments today; they are doing so while their wealth (home equity) has significantly increased. Home equity can be tapped for renovations, college loans and more.
Palm Beach County single-family median prices increased 19% year-over-year in October 2021, increasing from $420,000 to $500,000. Existing condo median prices increased 12.3% year-over-year, from $211,000 to $237,000.
The greater share of Palm Beach luxury sales in 2021 compared to a year ago is part of the reason for the large year-over-year increase in median prices.
Rising median prices is a trend nationwide as record-low mortgage rates and the increased availability of remote work and education has accelerated the demand for housing. Low inventory relative to high demand leads to prices rising.
Lower mortgage rates are making home purchases more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07 in October, up from 2.90% in September. The average commitment rate across all of 2020 was 3.11%.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021 and 2022, the increased inventory should ease the growth of median prices.
South Florida remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to Knight Frank's 2021 The Wealth Report. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer significantly less prime land for $1 million.
Palm Beach Dollar Volume Totals $1.7 Billion, Showcasing Impact Housing Plays in Local Economy
While other industries struggled over the past year, housing lifted the economy nationally and locally. For every two homes sold in the U.S., one job is created. Palm Beach dollar volume showcases the impact housing plays in the local economy.
Palm Beach total dollar volume totaled $1.7 billion in October 2021. Single-family home dollar volume decreased 7.2% year-over-year, from $1.3 billion to $1.2 billion. Condo dollar volume increased 6.9% year-over-year, from $440.7 million to $471.2 million.
Palm Beach Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 0.9% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 1.8% in October 2020.
Total Palm Beach distressed sales decreased 55.2% year-over-year in October 2021, from 58 to 26. Short sales and REOs accounted for 0.2% and 0.7% year-over-year, respectively, of total Palm Beach sales in October 2021. Short sale transactions decreased 50% year-over-year while REOs decreased 56.8%.
Nationally, distressed sales represented less than 1% of sales in October, equal to the percentage seen a month prior and equal to October 2020.
National, State Housing Demand Robust as More Inventory Expected to Arrive
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.8% from September to a seasonally adjusted annual rate of 6.34 million in October. Sales fell 5.8% from a year ago (6.73 million in October 2020).
Statewide, closed sales of single-family homes in October totaled 27,628, down 6.8% year-over-year, while existing condo-townhouse sales totaled 11,433, down 5.6% from October 2020. 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 October was $353,900, up 13.1% from October 2020 ($313,000), as prices climbed in each region. This marks 116 straight months of year-over-year increases, the longest-running streak on record.
The statewide median sales price for single-family existing homes in October was $358,950, up 17.7% 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 $260,000, up 17.6% over October 2020. The median is the midpoint; half the homes sold for more, half for less.
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 98.7% in October 2021, up 2.3% from 96.5% last year. The median percent of original list price received for existing condominiums was 98.2%, up 3.6% from 94.8% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 14 days, a 33.8% decrease from 21 days last year. The median time to sale for single-family homes was 59 days, a 13.2% decrease from 68 days last year.
The median number of days between the listing date and contract date for condos was 15 days, down 58.3% from 36 days. The median number of days to sale for condos was 56 days, a 30% decrease from 80 days.
Palm Beach Cash Sales More than Double National Figure in October 2021
Cash sales represented 48.2% of Palm Beach closed sales in October 2021, compared to 40.3% in October 2020. About 24% of U.S. home sales are made in cash, according to the latest NAR statistics.
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 56.9% of all Palm Beach existing condo sales and 40.4% of single-family transactions.