Boca Raton and Palm Beach County Real Estate Market Update - October 2018
Palm Beach County Mirroring National Trends as Markets Wait on Interest Rates
In taking a closer look at the internal numbers, here are some indicators we are seeing:
- The median sales price of a single family home in Palm Beach County was $347,250 in October, which is down slightly from the higher prices of earlier this year.
- The number of housing units sold was up from September monthly sales, and significantly higher than the same month last year. This is due to the effects of Hurricane Irma on South Florida sales one year ago.
- The inventory of homes for sale in Palm Beach County, albeit increasing month over month, remains low with a 4.8-month supply of houses on the market. So you know, 6 months is considered to be a balanced market. There were 7,108 houses for sale in October, a slight increase over the same period one year ago.
- Homes are sitting on the market longer and sellers are having to make price improvements in order to get a contract.
- Trends were a little different in the condo and townhouse market. The typical Palm Beach County condo that sold in October fetched $185,000, up significantly from a year ago.
- Luxury homes are continuing to take significantly longer to sell.
- Rising interest rates (we have had 3 rate increase already this year) are beginning to bite into the first-time home buyer segment of the market as well as move-up buyers. Another increase to rate is anticipated in December with perhaps 3 more in 2019.
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.