Boca Raton and Palm Beach County Real Estate Market Update - November 2018
The Federal Reserve is the Christmas Grinch! It Raises Interest Rates Again With Two More Hikes Announced For Next Year.
In taking a closer look at the internal numbers, here are the local market indicators we are seeing:
- The median sales price of a single family home in Palm Beach County was $348,000, down slightly from the higher prices of earlier this year.
- The number of housing units sold was down sharply from October monthly sales, and also down from the same month last year, further indicating a market slowdown.
- The inventory of homes for sale in Palm Beach County , increased to a 5.1-month supply of houses on the market. So you know, 6 months is considered to be a balanced market. There were 7,405 houses for sale in November, an increase over the same period one year ago.
- Trends were a little different in the condo and townhouse market. The typical Palm Beach County condo that sold in November fetched $176,750, down significantly from October.
- Luxury homes are continuing to take notably longer to sell.
- Rising interest rates (we have had 4 rate increases already this year, with the most recent occurring this week, just as the holidays begin!) are beginning to bite into the first time home buyer segment of the market as well as move-up buyers. Another 2 rate increases were announced on Wednesday by the Federal Reserve for 2019.
On A National Level:
- Recent data this past week showed existing home sales down 7% - the largest drop since 2011.
- Homebuilder stocks have taken a beating since equity markets peaked in early October, further indicating the weakness in that sector.
- The yield curve is flat with the distinct possibility of an inverted yield curve on the horizon which has traditionally been a warning of a recession ahead.
- Equity markets are all in correction territory with many companies now announcing slowing growth worldwide.
As we continue to look for clear trends and market changes our summary takeaways remain the same:
- An ongoing shortage of affordable single family home inventory continues to create headwinds for the housing markets.
- The market is still behind on new construction which is not keeping up with demand and adding further pressure. This is coupled with significantly higher costs to build (specifically, land, wages, materials and interest costs). Homebuilders are therefore constructing higher priced units in order to respond to both increased demand and building cost concerns.
- Another headwind for the market to absorb is the increasing Interest Rate environment with 30-year mortgage rates reaching 5% recently (up from 3.88% a year ago) with predictions taking us above 5% in 2019, representing the highest levels in 10 years!
Here is a quick video going into more depth of current economic indicators:
Review the Palm Beach County Market Statistics for October in Detail Here:
The Palm Beach County market statistics are courtesy of your REALTOR®, a proud member of the Realtors® Association of the Palm Beaches (RAPB). RAPB represents over 14,000 members involved in all aspects of residential and commercial real estate.