Cash sales represented 52.3% of all Palm Beach closed transactions in 2Q
The Miami Association of Realtors is reporting that Palm Beach County continued its trend of surging total home sales in 2Q 2021 as pent-up demand, more U.S. individuals and companies moving to South Florida, and record-low mortgage rates fueled transactions.
Palm Beach County total home sales surged 95.1% year-over-year, from 6,055 to 11,813. Palm Beach single-family home transactions rose 63.8%, from 3,660 to 5,996. Palm Beach existing condo sales increased 142.9%, from 2,395 to 5,817.
"Palm Beach County home sales are up even if you compare them to two years ago," JTHS-MIAMI President Bill Mate said. "Luxury home sales continue to spearhead the rise in total transactions and dollar volume as more U.S. individuals and companies move to South Florida."
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 Sales Jump 213.3% as Northeast and West Coast Buyers Relocate
Palm Beach County single-family home luxury ($1-million-and-up) transactions surged 213.3% year-over-year to 1,034 transactions in 2Q 2021. Palm Beach County condo luxury sales increased 336% to 484 transactions in 2Q 2021.
Record-low interest rates; a record-high S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern and West Coast 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.
Palm Beach Homeowners' Home Equity Surges 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 single-family home median prices rose 29.7% year-over-year, from $370,000 to $479,900. Palm Beach existing condo median prices rose 20% year-over-year, from $200,000 to $240,000.
Rising median prices is a trend nationwide as record-low mortgages 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.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. Also, as more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Palm Beach Dollar Volume Totals $8.7 Billion, Showcasing Powerful Impact of Housing
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. Miami dollar volume showcases the impact housing plays in the local economy.
Palm Beach single-family home dollar volume rose 161.2%, from $2.3 billion to $6.1 billion. Palm Beach existing condo dollar volume increased 223.4% to $2.6 billion. The sales do not include Palm Beach's new construction condo market.
Non-distressed sales comprised about 99.2% of all closed residential sales in 2Q 2021 vs. 97.1% in 2Q 2020. Only 0.8% of all closed residential sales in Palm Beach were distressed in 2Q 2021, including REO (bank-owned properties) and short sales, compared to 2.9% in 2Q 2020.
Short sales and REOs accounted for 0.2% and 0.6%, respectively, of total Palm Beach sales in 2Q 2021. Short sale transactions decreased 36.7% year-over-year while REOs fell 51%.
Lower mortgage rates made home purchases more affordable in 2021. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.0% for 2Q 2021, down from the 3.23% average recorded during the same quarter a year earlier.
Robust Demand for Housing Statewide, Nationally Fueling Double-Digit Increase in Sales
Statewide, 2Q closed sales of existing single-family homes increased by 43.3% year-over-year (totaling 98,414), and were up nearly 16% compared to the 2Q 2019. Sales growth in the condo and townhouse resale market was even stronger, rising 117% (a total of 48,976 sales) compared to last year and up by almost 44% compared to two years ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.
The statewide median sales price for single-family existing homes in 2Q 2020 was $345,000, up 24.3% 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 $250,000, up 20.8% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, median sales price of single-family existing homes rose 22.9% to $357,900, an increase of $66,800 from one year ago. All regions saw double-digit year-over-year price growth, which was led by the Northeast (21.8%), followed by the South (21.0%), West (20.9%), and Midwest (17.1%).
New Listings Rise: More Sellers Listing Properties Should Help Alleviate Lack of Supply
New listings for Palm Beach County single-family homes rose 26.2% year-over-year in 2Q 2021, from 5,041 to 6,360. New listings for Palm Beach County condos rose 19.1% year-over-year in 2Q 2021, from 4,312 to 5,135. This is a sign that more sellers are coming to the market.
At the current sales pace, the number of active listings represents 1.3 months of inventory for single-family homes (seller's market) and 1.5 for condominiums (seller's market). A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Palm Beach real estate had 4,484 active listings in 2Q 2021, a 58.6% drop from the 10,821 listings at the same time last year. The inventory for single-family homes dropped 54.7%, from 4,989 to 2,260. Palm Beach existing condo inventory decreased 61.9%, from 5,832 to 2,224.
Palm Beach Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
With low inventory, particularly for single-family homes, Palm Beach properties are attracting multiple bids and buyers going over-list price. The median percent of original list price received was 99.4% for single-family homes and 96.8% for condos in 2Q 2021.
The median time to contract for single-family home listings was 12 days, a 73.3% drop from 45 days in 2Q 2020. The median time to contract for existing condos was 23 days, a 61.7% drop from 60 days in 2Q 2020.
The median time to sale for single-family homes decreased 34.8%, from 92 days to 60. The median time to sale for existing condos decreased 31.7%, from 101 to 69.
Palm Beach Cash Sales More than Double the National Figure in 2Q 2021
Cash sales represented 52.3% of Palm Beach closed sales in 2Q 2021, compared to 37.9% in 2Q 2020. About 23 percent of U.S. home sales 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 as well as some moving from more expensive U.S. markets who are able to buy more with their profits from real estate sales.
Cash sales accounted for 61.5% of all Palm Beach existing condo sales and 43.3% of single-family transactions.