The Palm Beach County real estate market has been relatively quiet so far for 2017, especially in February. Historically speaking, the first two months of any year see just about the same level of activity – year-over-year percent changes in closed sales around the 1-3% marks, with no substantial increase in median sale price.
What was unique about February is median time to contract, which bloated over 14% from February 2016 to 64 days. That measures how long it takes to get from contract to closing. This increase is unique to single-family homes, so it could be that lenders are slow to get back into the swing of things following a year end. Anytime a transaction is delayed, it almost always has something to do with lending.
New pending sales are climbing back, as they often do around this time, clocking a 2% increase over February 2016 as 1,836 single-family home transactions are waiting for the closing table. We’ll see that figure sharply increase going into Q2 2017.
New listings have lost some momentum, with 2,168 homes going up for sale in February, a 5% drop from this time last year. Pending some extraordinary stimulation in the marketplace, this trend will continue throughout the year. Generally speaking, new listings are the highest in January of each year, and the lowest in December, demonstrating a humble and even slightly downward slope through the year.
In other notes, months’ supply of inventory remains steady at over 5 months, still technically considered a seller’s market. But with homebuyer’s insatiable demand for single-family homes in the $150,000 – $300,000 price range, thanks to low interest rates and tax credits, there is a solid equilibrium in the market between buyers and sellers.
The Foreclosure and REO Market is Dead
With February’s report, we can also surmise that the days of cheap homes and great deals in the foreclosure and REO markets are over. Since 2014, these markets in Palm Beach County have been squeezed to damn near zero transactions at a half-life pace. Each year, the closed sales in the distressed market gets cut by 50%.
With no housing or financial crisis looming, it’s safe to say it’s not worth the effort for investors in the foreclosure and REO markets. There were only 66 sales in the market for February 2017, compared with 138 in February 2016. Short sales are even tighter. Only 22 short sales closed in last month, compared with 40 this time last year.
We have an agent in the office with a client who was interested in a short sale. When she went to make an offer, she discovered that the seller has 17 other offers! Investors are beating each other bloody over the few properties that remain available in the short sale market. Our advice for investors: don’t bother. Let one of our talented Realtors find you a property you can actually acquire off-market.
February 2017 Single-Family Real Estate Market Stats
|SINGLE-FAMILY HOME||FEBRUARY 2017||FEBRUARY 2016||PERCENT CHANGE|
|Median Sales Price||$315,000||$295,000||6.8%|
|New Pending Sales||1,836||1,804||1.8%|