Boca Raton and Palm Beach County Real Estate Market Update - September 2018
Palm Beach County Housing Market is Seeing A Sales Slowdown As Interest Rates Rise
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 $345,000 ….. Down slightly from the higher prices of earlier this year.
- The number of housing units sold was down significantly from August monthly sales, albeit higher than the same month last year. Seasonal factors are included in this calculation.
- The inventory of homes for sale in Palm Beach County remains low, with a 4.6-month supply of houses on the market. There were 6,726 houses for sale in September, almost the same as one year ago.
- Homes are sitting on the market longer and sellers are having to make price improvements in order to get a contract.
- However, trends were a little different in the condo and townhouse market. The typical Palm Beach County condo that sold in September fetched $175,000, nearly the same as 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 the first time home buyer segment of the market as well as move-up buyers. Another increase to interest rates 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:
- The ongoing shortage of single family home inventory continues to create headwinds for our housing market.
- Our market is still behind on new construction, which is not keeping up with demand and adding further pressure. New construction is facing 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.
- The increasing Interest Rate environment with 30-year mortgage rates reached 4.85% last week (up from 3.88% a year ago) with predictions taking us above 5% in 2019, representing the highest levels in 10 years. This denotes another headwind for the market to absorb.
Here is a quick video going into more depth of current economic indicators:
Review the Palm Beach County Market Statistics for September 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.