Greater Palm Beach Area Sets Multiple Home Sales, Price Records in 2021

Greater Palm Beach Area Sets Multiple Home Sales, Price Records in 2021

Residential News » Palm Beach Edition | By Michael Gerrity | February 1, 2022 8:43 AM ET

According to the Miami Association of Realtors, South Florida's Palm Beach County established all-time annual records for total home sales, total dollar volume, single-family home sales and condo transactions as December 2021 statistics pushed the year-end 2021 records to new heights. Palm Beach County established all-time annual records for total home sales, total dollar volume, single-family home sales and condo transactions as December 2021 statistics pushed the year-end 2021 records to new heights, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

Palm Beach County finished 2021 with 37,447 total home sales, which is 18.8% higher than last year and is 16.7% higher than Palm Beach's previous annual record of 32,083 transactions in 2015. Palm Beach also set new all-time annual marks for single-family home sales (19,495) and (17,952). Palm Beach total sales volume in 2021 was $25.4 billion, which is 50.3% higher than last year.

"Palm Beach County continues to see high-demand and low inventory," JTHS-MIAMI President Brad Westover said. "If Palm Beach County had more inventory, the historic sales numbers would be even higher."

Palm Beach County Luxury Sales Jump in December 2021

Palm Beach County total home sales decreased 0.6% year-over-year in December 2021, from 3,079 sales to 3,062. Palm Beach single-family home transactions decreased 10.3%, from 1,784 to 1,601 because of lack of inventory and Covid19 comps (stats are in comparison to major rebound demand last year). Palm Beach existing condo sales increased 12.8%, from 1,295 to 1,461.

Palm Beach single-family luxury ($1-million-and-up) transactions rose 19.6% year-over-year to 281 sales in December 2021. Palm Beach existing condo luxury ($1-million-and-up) sales increased 39.2% year-over-year to 110 transactions.

There are 2.8 months of supply in luxury single-family homes; 2.8 months of supply in luxury condos. Luxury months of supply continue 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 6.9% year-over-year to 470 transactions in December 2021. Palm Beach existing condo sales priced between $400K to $600K increased 18.4% to 161 transactions.

New Listings for Single-Family Rise; Low-Supply/High-Demand Market for Broward

There is always a seasonal fade in inventory in the fall and winter. More inventory is expected to come to the market by spring 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. Expectation that interest rates will rise should continue to drive demand in the first quarter of 2022.

New listings of Palm Beach single-family homes decreased 12.1% to 1,311 from 1,491. New listings of condominiums decreased 9.4%, from 1,471 to 1,332.

Inventory of single-family homes decreased 48.4% year-over-year in December 2021 from 3,551 active listings last year to 1,832 last month. Condominium inventory decreased 65.7% year-over-year to 1,765 from 5,140 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 52.2% to 1.1 months, which indicates a seller's market. Inventory for existing condominiums decreased 73.9% to 1.2 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 2021 decreased 58.6% year-over-year, from 8,691 to 3,597.

Nationally, total housing inventory at the end of December amounted to 910,000 units, down 18.0% from November and down 14.2% from one year ago (1.06 million). Unsold inventory sits at a 1.8-month supply at the present sales pace, down from 2.1 months in November and from 1.9 months in December 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 23.5% year-over-year in December 2021, increasing from $425,000 to $525,000. Existing condo median prices increased 14.4% year-over-year, from $230,000 to $263,125.

The greater share of Palm Beach luxury sales in December 2021 compared to December 2020 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 a 30-year, conventional, fixed-rate mortgage was 3.10 in December, up from 3.07 in November. The average commitment rate across all of 2021 was 2.96%.

NAR Chief Economist Lawrence Yun expects the 30-year fixed mortgage rate to increase to 3.7% by the end of 2022. It would be still lower than the pre-pandemic rate of 4%.

Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2022, the increased inventory should ease the growth of median prices.

Miami 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 $2.3 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. Broward dollar volume showcases the impact housing plays in the local economy.

Palm Beach total dollar volume totaled $2.3 billion in December 2021. Single-family home dollar volume increased 5.7% year-over-year, from $1.5 billion to $1.6 billion. Condo dollar volume increased 26.8% year-over-year, from $499 million to $633 million.

Palm Beach Distressed Sales Keep Dropping, Reflecting Healthy Market

Only 0.7% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 1.1% in December 2020.

Total Palm Beach distressed sales decreased 38.2% year-over-year in December 2021, from 34 to 21. Short sales and REOs accounted for 0.1% and 0.6% year-over-year, respectively, of total Palm Beach sales in December 2021. Short sale transactions decreased 42.9% year-over-year while REOs decreased 37%.

Nationally, distressed sales represented less than 1% of sales in December 2021, equal to the percentage in December 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, dropped 4.6% from November to a seasonally adjusted annual rate of 6.18 million in December. From a year-over-year perspective, sales waned 7.1% (6.65 million in December 2020).

Statewide, sales of single-family homes statewide last month totaled 29,988, down 1.6% from December 2020, while existing condo-townhouse sales totaled 12,789, a slight uptick of 0.3% year-over-year, according to Florida Realtors' data.

Nationally, the median existing-home price for all housing types in December was $358,000, up 15.8% from December 2020 ($309,200), as prices rose in each region. The South witnessed the highest pace of appreciation. This marks 118 straight months of year-over-year increases, the longest-running streak on record.

The statewide median sales price for single-family existing homes in December was $373,990, up 21% from the previous year. Meanwhile, the statewide median price for condo-townhouse units was $285,000, up 23.9% over the year-ago figure. 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 99.4% in December 2021, up 2.7% from 96.8% last year. The median percent of original list price received for existing condominiums was 98.8%, up 4.3% from 94.7% last year.

The median number of days between listing and contract dates for Palm Beach single-family home sales was 14 days, a 50% decrease from 28 days last year. The median time to sale for single-family homes was 59 days, a 16.9% decrease from 71 days last year.

The median number of days between the listing date and contract date for condos was 14 days, down 67.4% from 43 days. The median number of days to sale for condos was 53 days, a 34.6% decrease from 81 days.

Palm Beach Cash Sales More than Double National Figure in December 2021

Cash sales represented 50.4% of Palm Beach closed sales in December 2021, compared to 42.2% in December 2020. About 23% 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 61.1% of all Palm Beach existing condo sales and 40.7% of single-family transactions.

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