COVID Fleeing New York wealth driving luxury home sales in Palm Beach
According to Miami Realtors, Palm Beach County total home sales surge in 3Q 2020. Palm Beach County total home sales rose 15.2% year-over-year, from 8,046 to 9,271. Palm Beach single-family home transactions surged 17.1%, from 4,697 to 5,498. Palm Beach existing condo sales increased 12.7%, from 3,349 to 3,773.
"Palm Beach County real estate has benefited from the surge in demand for single-family homes as homebuyers seek more space because of remote work and schooling while mortgage rates are at historic lows," JTHS-MIAMI President David Abernathy said.
The COVID-19 situation has accelerated the trend of homebuyers from New York and cold weather and tax-burdened Northeastern states searching and purchasing homes in South Florida.
Before the COVID-19 situation, the Palm Beach market was exceptionally strong. Broward real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax burdened states, high consumer confidence and a strong job market.
Palm Beach County Single-Family Home Luxury Sales Jump 82.9%
Palm Beach County single-family home luxury ($1-million-and-up) transactions surged 82.9% year-over-year to 598 transactions in 3Q 2020. Palm Beach County condo luxury sales jumped 52.5% to 151 transactions in 3Q 2020.
Record-low interest rates; a record-high 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.
Median Home Prices Rise in 3Q 2020
Strong demand coupled with limited supply continue to drive price appreciation in Palm Beach County.
Palm Beach County single-family home median prices rose 12.4% year-over-year, from $355,000 to $399,000. Palm Beach County existing condo median prices rose 10.9% year-over-year, from $185,000 to $205,250.
Dollar Volume Jumps in 3Q 2020
Palm Beach County single-family home dollar volume rose 44.3%, from $2.6 billion to $3.8 billion. Palm Beach condo dollar volume increased 15.2% to $1.2 billion.
Non-distressed sales comprised about 98% of all closed residential sales in 3Q 2020 vs. 96.9% in 3Q 2019. Only 2% of all closed residential sales in Palm Beach were distressed in 3Q 2020, including REO (bank-owned properties) and short sales, compared to 3.1% in 3Q 2019.
Short sales and REOs accounted for 0.3% and 1.8%, respectively, of total Palm Beach sales in 3Q 2020. Short sale transactions decreased 51.9% year-over-year while REOs fell 15.1%.
Lower mortgage rates made home purchases more affordable in 2020. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.95% for 3Q 2020, significantly lower than the 3.67% average reported during the same quarter a year earlier.
Hot Markets Overview Reveals Strong Demand and Limited Supply in Many Local Areas
Months' supply of inventory is a strong indicator of real estate activity. Top Palm Beach County neighborhoods with the lowest months of supply of inventory (at least 100 new pending sales) in 3Q 2020:
Royal Palm Beach Village, a north Palm Beach community north of Wellington, had 1.5 months supply
The Acreage, a north Palm Beach community west of West Palm Beach, had 1.6 months supply
Greenacres, a north Palm Beach community west of Lake Worth, had 1.6 months supply
Jupiter, a north Palm Beach town north of Palm Beach Gardens, had 1.9 months supply
Boynton Beach, a southeastern Palm Beach community north of Delray Beach, had 1.9 months supply
Jupiter, a north Palm Beach town north of Palm Beach Gardens, had 2.7 months supply
Greenacres, a north Palm Beach community west of Lake Worth, had 2.8 months supply
Palm Beach Gardens, a north Palm Beach community north of West Palm Beach, had 3.2 months supply
Boynton Beach, a southeastern Palm Beach community north of Delray Beach, had 3.8 months supply
Delray Beach, a south Palm Beach community north of Boca Raton, had 4.7 months supply
State and National Stats in 3Q 2020
Closed sales of single-family homes statewide totaled 89,562 in 3Q 2020, up 13.7% from the 3Q 2019 level; closed sales of condo-townhouse properties totaled 33,523, up 13.5% compared to 3Q 2019. Closed sales typically occur 30 to 90 days after sales contracts are written.
The statewide median sales price for single-family existing homes in 3Q 2020 was $299,900, up 13.2% from the same time a year ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $215,000, also up 13.2% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
The nation's median existing single-family home price climbed 12.0% on a year-over-year basis, to $313,500. All four major regions saw double-digit year-over-year price gains, led by the West (13.7%), but followed closely by the Northeast (13.3%), the South (11.4%), and the Midwest (11.1%).
Seller's Market for Palm Beach Single-Family Homes, Condos
At the current sales pace, the number of active listings represents 2.9 months of inventory for single-family homes and 5.1 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Palm Beach County real estate had 9,489 active listings in 3Q 2020, a 17.5% decrease from the 11,501 listings at the same time last year. The inventory for single-family homes decreased 32.6%, from 6,144 to 4,141. Palm Beach existing condo inventory decreased 0.2%, from 5,357 to 5,348.
Palm Beach Homes Selling Close to List Price
The median percent of original list price received was 96.2% for single-family homes and 94.6% for condos in 3Q 2020.
The median time to contract for single-family home listings was 36 days, an 28% decrease from 50 days in 3Q 2019. The median time to contract for existing condos was 45 days, a 21.1% decrease from 57 days in 3Q 2019.
The median time to sale for single-family homes decreased 15.8%, from 95 days to 80. The median time to sale for existing condos decreased 10.3%, from 97 to 87.
Palm Beach County Cash Sales Higher than National Figure
Cash sales represented 37.8% of Palm Beach closed sales in 3Q 2020, compared to 38.9% in 3Q 2019.
About 20 percent of U.S. home properties are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash.
Cash sales accounted for 49.5% of all Palm Beach existing condo sales and 29.6% of single-family transactions.