According to the Miami Association of Realtors, Palm Beach County total home sales rose again year-over-year in July 2021 as pent-up demand, more U.S. individuals and companies moving to South Florida, and record-low mortgage rates continue fueling transactions.
Palm Beach County total home sales increased 1.8% year-over-year in July 2021, from 3,256 sales to 3,315. Palm Beach single-family home transactions decreased 8.6%, from 1,940 to 1,774. Palm Beach existing condo sales increased 17.1%, from 1,316 to 1,541.
"Palm Beach County luxury sales continue to remain one of the strongest markets in the nation," JTHS-MIAMI President Bill Mate said. "Sales were rising before the pandemic. The pandemic and the increase in remote work availability has only accelerated the demand for our low-tax, pro-government and waterfront lifestyle."
Palm Beach home sales are also higher overall vs. July 2019. Palm Beach total home sales are up 10.2% in July 2021 vs. July 2019, from 3,007 to 3,315. Palm Beach single-family home sales (0.6% decrease) and condo transactions (25.1% jump) are higher than July 2019.
Demand for Palm Beach Condos Surges; Condo Sales Jump 17.1% Year-over-Year in July 2021
With so many U.S. companies and individuals relocating to our region over the last year, many of those relocating homebuyers are acting on the condo inventory. International homebuyers, who have long preferred condos, have pent-up demand for South Florida real estate and are also returning to the No. 1 market for foreign homebuyers.
Palm Beach existing condo sales are up in all price ranges in July 2021, with major transaction increases in properties selling at $300K and above.
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. More inventory is expected to come to the market later this year 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.
Palm Beach Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Palm Beach single-family luxury ($1-million-and-up) transactions increased 13.3% year-over-year to 264 sales in July 2021. Palm Beach existing condo luxury ($1-million-and-up) sales increased 59.6% year-over-year to 83 transactions.
There are 3.5 months of supply in luxury single-family homes; 3.3 months of supply in luxury condos. Luxury months of supply continued 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 also coming here for the vaccine and purchasing property. Global buyers purchase in South Florida because the mega region is a world-class global region 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 increased 8.8% year-over-year to 534 transactions in July 2021. Palm Beach existing condo sales priced between $400K to $600K increased 64.5% to 181 transactions.
Single-Family Home Inventory Rises Month-over-Month as More Listings Arrive to the Market
Palm Beach County single-family homes inventory rose in July 2021 compared to June 2021, an indicator that more inventory is heading to the low-supply/high demand market.
The number of Palm Beach single-family home active listings increased 10.3% in July 2021 compared to June 2021, from 2,260 to 2,493.
Inventory of single-family homes decreased 46.3% year-over-year in July 2021 from 4,642 active listings last year to 2,493 last month. Condominium inventory decreased 60.8% year-over-year to 2,256 from 5,751 listings during the same period in 2020.
Months supply of inventory for single-family homes decreased 55.9% to 1.5 months, which indicates a seller's market. Inventory for existing condominiums decreased 73.2% to 1.5 months, which indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Monthly supply of inventory is down since July 2019 for single-family, reflecting strong demand. Total active listings at the end of July 2021 decreased 54.3% year-over-year, from 10,393 to 4,749.
New listings of Palm Beach single-family homes decreased 0.5% to 1,940 from 1,949. New listings of condominiums decreased 6.2%, from 1,704 to 1,598.
Nationally, total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June's supply and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.
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 County single-family median prices increased 25.3% year-over-year in July 2021, increasing from $399,000 to $500,000. Existing condo median prices increased 13.7% year-over-year, from $205,000 to $233,000.
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 2.87% in July, marginally down from 2.98% in June. The average commitment rate across all of 2020 was 3.11%. NAR Chief Economist Lawrence Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Palm Beach Dollar Volume Totals $2 Billion, Showcasing Power 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.
Single-family home dollar volume increased 2.5% year-over-year, from $1.4 billion to $1.5 billion. Condo dollar volume increased 40.5% year-over-year, from $400.7 million to $563.1 million.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Only 19 of the 1,929 condominium buildings in Miami-Dade, Broward and Palm Beach counties are approved for Federal Housing Administration loans as of Aug. 17, 2021, according to the U.S. Department of Housing and Urban Development.
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 have championed, are expected to generate increased homeownership opportunities.
Palm Beach County 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 2.5% in July 2020.
Total Palm Beach distressed sales decreased 72.5% year-over-year in July 2021, from 80 to 22.
Short sales and REOs accounted for 0.2% and 0.4% year-over-year, respectively, of total Palm Beach sales in July 2021. Short sale transactions decreased 11.1% year-over-year while REOs decreased 80.3%.
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 100% in July 2021, up 4.3% from 95.9% last year. The median percent of original list price received for existing condominiums was 97.7%, up 3.6% from 94.3% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 10 days, an 81.1% decrease from 53 days last year. The median time to sale for single-family homes was 57 days, a 41.8% decrease from 98 days last year.
The median number of days between the listing date and contract date for condos was 15 days, down 76.6% from 64 days. The median number of days to sell for condos was 61 days, a 42.5% decrease from 106 days.
Palm Beach Cash Sales More than Double National Figure in July 2021
Cash sales represented 48.3% of Palm Beach County closed sales in July 2021, compared to 37.1% in July 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 58.0% of all Palm Beach County existing condo sales and 39.8% of single-family transactions.