The Palm Beach County real estate market hit a mile stone in April 2017, with Median Sales Price hitting a 10-year high at $327,000. That’s 6.5% higher than the median sales price from the April 2016 Real Estate Market Report.
While there are other interesting points in this month’s Market Report, let’s touch on the median sales price for a minute. Palm Beach County home prices have gained at a solid clip over the last three years, averaging a pace of 5% per year. That means property values are increasing, and city and county tax rolls are growing.
A lot of this growth is due to population surges in Florida. Our state offers relatively good wages and job opportunities, lead heavily by the service sector. As wages and opportunities continue to expand, so too will demand from new and first-time homebuyers.
In fact, while single-family homes in the $200,000 – $300,000 price range account for only about a quarter of total closed transactions for the month, demand for this price range far exceeds supply. New Listings in this price range, for example, account for only about 18% of total new listings.
That trend has strengthened, and continues to pose a challenge for new and young home buyers who can qualify for mortgages, but are limited by low down payments and a “ceiling” on what they can borrow. The typical first-time home buyer qualifies for a mortgage of about $250,000.
Other Factors Driving Higher Home Prices in 2017
Another indicator of how active buyers are in the market is the Median Time to Contract. This metric measures how quickly sellers are binding into purchase contracts. For April 2017, the time it took to get to a contract was 10% quicker than this time last year, at 46 days. Median time to sale, which includes the closing process, came in at about 90 days, or 6% quicker than April 2016.
That indicator is a leading indicator – meaning, it tells us how buyers and sellers are behaving right now. And right now, they are coming to the table together to close deals, driving that median number lower and lower.
What can buyer and sellers expect as we head into the summer months?
Dollar Volume measures the total market value of the homes that exchanged hands as a calculation of all sales, and that number generally begins to drop off around this time. Closed transactions dwindle, and so does total volume. Summer months can be slow. But for April 2017, that hasn’t happened yet – dollar volume was up about 4% from 2016 to $833 million.
What can keep a market moving during the summer lag is that the coming months offer the best opportunity of the calendar year for families to make the kinds of big moves they’ve been wanting to make, but didn’t want to disrupt their children’s school year. That might include moving for a new job, changing school districts, or maybe “moving back home” to somewhere else they used to live.
If that describes you, heed this advice – get started on it early. Don’t hesitate, because in this market, it can cost you your contract. There is a short window to do a lot of work – find a home, negotiate a contract, and get to the closing table. And, if you’re buying and selling a home simultaneously, the pressure is amped up by 2x.
Make sure you are 100% comfortable and confident in the Realtor you’ve chosen to assist you. Ask them if they’ve handled a simultaneous transaction before. It’s OK to ask, and it’s OK to find another Realtor if they say no! Buying and selling real estate is a complicated transaction, and doing it simultaneously is ever more delicate. Don’t trust this important decision to just anyone. Give us a call for a FREE consultation any time by calling 561-500-LIST.
April 2017 Single-Family Real Estate Market Stats
|SINGLE-FAMILY HOME||APRIL 2017||APRIL 2016||PERCENT CHANGE|
|Median Sales Price||$327,000||$307,125||6.5%|
|New Pending Sales||1,865||2,010||7.2%|