Palm Beach Area Luxury Home Sales Spike 62 percent in February
According to the Miami Association of Realtors, total Palm Beach County home sales rose in February 2021 as pent-up demand and record mortgage rates continue to fuel transactions.
Total Palm Beach County home sales increased 3.1% year-over-year in February 2021, from 2,248 to 2,318. Single-family home sales in Palm Beach were down $ 1. 8% year-on-year, from 1,233 to 1,211. Existing condominium transactions in Palm Beach increased 9.1% year-over-year, from 1,015 to 1,107.
“Record interest rates, homebuyers leaving tax-burdened northeastern states, and work-from-home and distance-learning policies have all combined to boost real estate in Palm Beach,” said JTHS-MIAMI President Bill Mate.
Demand for South Florida real estate is evident in the median time to contact. Single-family homes in Palm Beach County are connected in 30 days, 50.8% faster than a year ago (61 days). Palm Beach condos are under contract 40 days, 32.2% faster than a year ago (59 days).
Lack of inventory at certain price points impacts sales, especially for single-family homes. The increase in housing starts and the increase in the number of sellers listing properties in 2021 should help alleviate the shortage of supply.
Palm Beach County luxury single-family home sales increased 62.3% in February 2021
Palm Beach County’s single-family luxury transactions ($ 1 million and over) jumped 62.3% year-on-year to 172 sales in February 2021. Existing luxury condo sales in Palm Beach ($ 1 million dollars and over) increased 93.8% year-over-year to 93 transactions.
Luxury supply months continue to trend down for all property types, month-to-month and year-to-year.
Palm Beach single-family homes priced between $ 400,000 and $ 600,000 increased 9.4% year-on-year to reach 314 transactions in February 2021. Sales of existing condos in Palm Beach priced at between $ 400,000 and $ 600,000 increased 56.5% to 108 transactions.
Record interest rate; a solid S&P 500; the attractiveness of stable assets in a volatile economy; tax-paying homebuyers who leave the northeastern states to buy in Florida (no state income tax); and work-from-home and distance-learning policies have all combined to create a strong market for luxury single-family properties.
Strong price appreciation in Palm Beach
Strong demand coupled with limited supply continue to drive price appreciation in Palm Beach.
Palm Beach County single-family home prices rose 24% year-on-year in February 2021, from $ 363,000 to $ 450,000. Prices for existing condominiums increased 24.9% year over year, from $ 189,000 to $ 236,000.
Increase in the volume of single-family homes and condominiums
The dollar volume of single-family homes increased 36.4% year-on-year, from $ 750.7 million to $ 1 billion. Condominium dollar volume increased 43% year over year, from $ 337.5 million to $ 482.6 million.
According to Freddie Mac, the average commitment rate for a conventional 30-year fixed-rate mortgage was 2.81 in February, down from 2.74% in January. The average engagement rate for the whole of 2020 was 3.11%.
Lack of access to mortgages continues to hamper the growth of the existing condominium market. Of the 9,307 condominiums in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, up from 29 last year, according to the Florida Department of Business and Professional Regulation and the FHA.
A better condominium approval process should increase sales. The guidelines, which came into effect in October 2019, extend certifications from two to three years, allow approvals for single-unit mortgages, provide more flexibility with homeowner ratios and increase the number of authorized FHA loans in a single project. The changes, many of which have been supported by MIAMI and NAR, are expected to generate increased opportunities for homeownership.
Troubled Palm Beach sales remain weak, reflecting a healthy market
Only 1.4% of all closed residential sales in Palm Beach were in trouble last month, including REO (bank properties) and short sales, up from 2.8% in February 2020.
Palm Beach’s total distressed sales fell 50% from 64 to 32.
Short sales and REOs represented 0.3% and 1.1% year-over-year, respectively, of Palm Beach’s total sales in February 2021. Short sale transactions declined 40% on a year-over-year basis. year over year while REOs fell 51.9%.
Nationally, troubled sales represented less than 1% of sales in February 2021, up from 2% in February 2020.
Palm Beach Real Estate Sale Near List Price
The median percentage of the initial list price received for single-family homes was 96.6% in February 2021, up 1.7% from 95% last year. The median percentage of the original list price received for existing condos was 95.3%, up 1.7% from 93.7% last year.
The median number of days from listing date to contract date for single-family home sales in Palm Beach was 30 days, down 50.8% from 61 days last year. The median number of days between the listing date and the condo closing date was 40 days, down 32.2% from 59 days.
The median time to sell single-family homes was 73 days, down 29.1% from 103 days last year. The median number of days to sell condos was 82 days, down 15.5% from 97 days.
Palm Beach Cash Buyers List
Palm Beach’s cash transactions accounted for 49.2% of total sales closed in February 2021, up from 47.7% last year. The national figure for cash buyers is 22%.
Palm Beach’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international buyers, who tend to buy properties for cash.
Condominiums account for a large portion of Palm Beach’s cash purchases, as 58.3% of condo closings were made in cash in February 2021, compared to 40.9% of single-family home sales.
Vendors’ market for single-family homes, condos
The single-family home inventory declined 52.5% in February 2021, from 6,282 active listings last year to 2,987 last month. The condominium inventory decreased by 25.4%, from 6,170 listings to 4,600 during the same period in 2020.
The month-to-month supply of single-family home inventories fell 52.4% at 2 months, indicating a sellers market. Existing condominium inventories fell 24.1% to 4.1 months, indicating a buyer’s market. A balanced market between buyers and sellers offers between six and nine months of supply.
Month, inventory supply has been declining since July 2019 for single-family homes, reflecting strong demand.
Total active listings at the end of February 2021 declined 39.1% year-on-year, from 12,452 to 7,587. Active listings remain about 60% below 2008 levels when sales hit their trough.
New listings of single-family homes in Palm Beach fell 13.5% to 1,763 from 2,039. New condominium listings fell 2.7% from 1,838 to 1,788.
Nationally, the total housing stock at the end of February stood at 1.03 million units, equal to January’s stock and down 29.5% from a year ago ( 1.46 million). The unsold inventory stands at a 2.0 month supply at current sales pace, slightly up from the 1.9 month supply in January and down from the 3.1 month amount recorded in January. February 2020. NAR began tracking single-family home supply in 1982.