MIAMI — Palm Beach County real estate total active listings rose for the fifth straight month, according to November 2022 statistics from the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“Palm Beach County inventory is moving off all-time lows as sales remain close to pre-pandemic totals despite high mortgage rates,” JTHS-MIAMI President Brad Westover said.
The 30-year fixed mortgage rate, which hit north of 7% earlier this fall, has declined for five consecutive weeks and is now roughly 1% lower than the recent peak in rates. But it is important to note that November 2022 statistics don’t reflect these lower rates as November 2022 purchases were agreed to in September and October when rates were higher.
“The decline in mortgage rates means a more robust market for home sales in 2023,” MIAMI REALTORS® Chief Economist Gay Cororaton said. “I expect home sales to post some uptick in 2023 compared to 2022 as mortgage rates continue to head downwards to 6% in 2023 amid decelerating inflation.”
Two other forward-looking national data points have turned positive in recent weeks, a strong sign as we head into 2023. National mortgage purchase applications have hit seven straight weeks of positive trend data and the HMI Builders confidence index went positive on Dec. 19.
Palm Beach November 2022 Sales Are Near Pre-Pandemic Totals
In comparison to a record November 2021, Palm Beach November 2022 sales decreased 41.1% year-over-year, from 2,793 to 1,646, because of high mortgage rates and low inventory.
Single-family home sales decreased 38.8% year-over-year, from 1,491 in record-breaking November 2021 to 920 in November 2022, due to lack of inventory and rising mortgage rates. Palm Beach existing condo sales decreased 44.2% year-over-year, from 1,302 record-breaking November 2021 to 726 in November 2022, due to lack of inventory and rising mortgage rates.
November 2021 sales surged so high because of historic-low mortgage rates and pandemic-fueled homebuying. Mortgage rates averaged 3.07% in November 2021.
Mortgage rates are more than doubled today, but November 2022 Palm Beach sales remain near pre-pandemic sale totals despite today’s higher prices and rates.
The Fed, which has made multiple hikes to the fed funds rate, is intent on slowing 40-year high inflation. While the Fed doesn’t set mortgage rates, it affects them through its conduct of monetary policy.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage averaged 6.31% as of December 15. That’s down from 6.33% last week, but up from 3.12% one year ago.
South Florida’s Estate’s Strong In-Migration & Other Market Fundamentals
- South Florida out-of-state driver license exchanges remain up double digits for relocating New Yorkers, Californians, New Jerseyans and more, according to Q3 2022 data from Florida Department of Highway Safety and Motor Vehicles (FLHSMV).
- Global companies continue relocating to South Florida, such as Citadel, a multinational hedge fund that manages $57 billion in assets and is developing a $1 billion Miami office tower with plans to have 1,500 employees in 10 years.
- One of the strongest job markets in the country. As of October 2022, the unemployment rate in the Miami-Fort Lauderdale-West Palm Beach metro area was 2.3% compared to 3.7% nationally.
- South Florida prices keep rising and homes keep selling fast
- Global buyers are returning in mass to America’s top international market. Foreign homebuyers purchased $6.8 billion of South Florida residential properties in 2022, up 34% from $5.1 billion in 2021, according to our 2022 MIAMI REALTORS® Global Study.
- Palm Beach’s percentage of cash buyers (52.6%) is significantly higher than the national average (26%).
- Distressed sales are statistically insignificant, reflecting a healthy market.
- Demographic shifts (Millennials reaching prime home-buying age and surging senior/retiree population growth)
- High percentage of workforce working remotely favors the South Florida market, where many have relocated to live, work and play because of our lifestyle, weather and more.
South Florida Home Prices Are Lower Than Many Other U.S. Metros
Miami-Fort Lauderdale-West Palm Beach’s median home price ($570,000) is significantly lower than many other major markets such as San Francisco-Oakland-Hayward, CA ($1.3 million), San Diego-Carlsbad, CA ($900,000), Los Angeles-Long Beach-Glendale, CA ($893,200), Seattle-Tacoma-Bellevue, WA ($741,300), Boston-Cambridge-Newton, MA-NH ($698,900), Denver-Aurora-Lakewood, CO ($666,000), New York-Jersey City-White Plains, NY-NJ ($616,300), and Washington-Arlington-Alexandria, DC-VA-MD-WV ($581,300), according to NAR’s Q3 2022 Metropolitan Media Area Prices report.
Palm Beach County single-family home median prices increased 10.8% year-over-year in November 2022, increasing from $510,000 to $565,000. Existing condo median prices increased 10.8% year-over-year, from $262,750 to $291,000.
While median prices have increased nationally so has house-buying power because of a long-run decline in rates before March 2022 and the slow, but steady growth of household income. West Palm Beach (No. 5) and Miami (No. 6) ranked among the Top-10 U.S. metros where homebuyer income grew the most during the pandemic via Redfin report.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Inventory for Palm Beach single-family homes (3.3 months) and condos (2.8 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
Locally, the greater share of South Florida luxury sales is also part of the reason for the large year-over-year increase in median prices.
Palm Beach Total Active Listings Rise for Second Consecutive Month
Total active listings at the end of November 2022 increased 97.7% year-over-year, from 3,873 to 7,656.
Inventory of single-family homes increased 113.2% year-over-year in November 2022 from 2,027 active listings last year to 4,322 last month. Condominium inventory increased 80.6% year-over-year to 3,334 from 1,846 listings during the same period in 2021.
New listings of Palm Beach single-family homes decreased 7.5% to 1,360 from 1,471. New listings of condominiums decreased 14.8%, from 1,504 to 1,281.
Months’ supply of inventory for single-family homes increased 175% to 3.3 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums increased 133.3% to 2.8 months, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Nationally, total housing inventory at the end of November was 1.14 million units, which was down 6.6% from October, but up 2.7% from one year ago (1.11 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, which was identical to October, but up from 2.1 months in November 2021.
Palm Beach Real Estate Posts $185 Million Local Economic Impact in November 2022
Every time a home is sold it impacts the economy: income generated from real estate industries (commissions, fees and moving expenses), expenditures related to home purchase (furniture and remodeling expenses), multiplier of housing related expenditures (income earned as a result of a home sale is re-circulated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $112,500, according to NAR. Palm Beach County sold 1,646 homes in November 2022 and had a local economic impact of $185 million.
Palm Beach total dollar volume totaled $1.1 billion in November 2022. Single-family home dollar volume decreased 41.74% year-over-year, from $1.4 billion to $828 million. Condo dollar volume decreased 45.06% year-over-year, from $569 million to $312 million.
Palm Beach Distressed Sales Remain Low, Reflecting Healthy Market
Only 0.6% of all closed residential sales in Palm Beach were distressed last month, including REO (bank-owned properties) and short sales, compared to 0.7% in November 2021.
Short sales and REOs accounted for 0% and 0.6% year-over-year, respectively, of total Palm Beach sales in November 2022.
Palm Beach’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented approximately 2% of sales in November, identical to November 2021.
National and State Statistics
In Florida, closed sales of single-family homes statewide totaled 17,009 in November 2022, down 38.2% year-over-year, while existing condo-townhouse sales totaled 7,084, down 38.9%. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions waned 7.7% from October to a seasonally adjusted annual rate of 4.09 million in November. Year-over-year, sales dwindled by 35.4% (down from 6.33 million in November 2021).
The statewide median sales price for single-family existing homes was $400,000, up 9.6% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $307,000, up 12.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home price for all housing types in November was $370,700, an increase of 3.5% from November 2021 ($358,200), as prices rose in all regions. This marks 129 consecutive months of year-over-year increases, the longest-running streak on record.
Palm Beach Real Estate Attracting Near List Price
The median percent of original list price received for single-family homes was 94.3% in November 2022, down 4.9% from 99.2% last year. The median percent of original list price received for existing condominiums was 95.1%, down 2.9% from 97.9% last year.
The median number of days between listing and contract dates for Palm Beach single-family home sales was 32 days, up from 13 days last year. The median time to sale for single-family homes was 75 days, a 36.4% increase from 55 days last year.
The median number of days between the listing date and contract date for condos was 29 days, up 93.3% from 15 days. The median number of days to sale for condos was 71 days, a 26.8% increase from 56 days.
Palm Beach Cash Sales Are Double the National Figure in November 2022
Cash sales represented 52.6% of Palm Beach closed sales in November 2022, compared to 49.8% in November 2021. About 26% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates. 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 62.5% of all Palm Beach existing condo sales and 44.8% of single-family transactions.
To access November 2022 Palm Beach Statistical Reports, visit http://www.SFMarketIntel.com
Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.
About the MIAMI Association of Realtors®
The MIAMI Association of Realtors (MIAMI) was chartered by the National Association of Realtors in 1920 and is celebrating 102 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations: MIAMI RESIDENTIAL, MIAMI COMMERCIAL; BROWARD-MIAMI, a division of MIAMI Realtors; JTHS-MIAMI, a division of MIAMI Realtors in the Jupiter-Tequesta-Hobe Sound area; MIAMI YPN, our Young Professionals Network Council; and the award-winning MIAMI Global Council. MIAMI REALTORS represents nearly 60,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 242 international organizations worldwide. MIAMI REALTORS® has launched its new YPN Global and will host the first-ever YPN Global Congress on Feb. 12-15, 2023, in Dubai. MIAMI has been selected to host the prestigious FIABCI World Congress on June 5-9, 2023. MIAMI’s official website is www.miamirealtors.com
Originally published at https://www.miamirealtors.com/2022/12/21/more-inventory-coming-to-high-demand-palm-beach-county-real-estate-market/