The message this month from the association is:
Supply Up, Demand Down ...
So in taking a closer look at the numbers….In a nutshsell – What we’re seeing is the following:
1. FIRST – The SUPPLY of NEW Listings continue to increase and are Up 9% and Active Inventory is Up 7% with approximately 2 out of 10 homes on the market selling each month and 1 out of 10 either expiring off the market or being cancelled….
2. SECOND – We are approaching 5 months supply of Inventory for SFH’s and 5.3 months for Townhouses & Condos
3. THIRD… Closed sales were down sharply in October with SFH sales down 9% and Townhouses/Condos down a whopping 16% versus the corresponding period last year. Once again the number of closed sales continues to decline
4. FOURTH – The numbers here in Palm Beach County continue to indicate a market in transition….Sellers are getting a median of 94.8% of their list price … with homes going under contract in 48-52 days …..if priced correctly of course…..
5. FINALLY – Lower priced homes with limited choices for buyers is still keeping that end of the market strong for sellers – at the same time, the Higher Priced end of the market has softened significantly with more supply and lower prices.
So….what we can clearly see from the October data is that 2 significant factors are taking place here:
At the same time…the continuing decline in home sales has not had a meaningful impact on prices just yet …. Likely due to the general shortage of home listings … however pushback on overpricing is evident
So….while home sellers are still in a somewhat favorable position, the marketplace is clearly changing….and a softening of prices is eventually going to occur if these trends continue…….. And of course….as we have been mentioning for several months now….. Prices do represent a lagging indicator. Higher priced homes are already experiencing this.
Now some commentators have been arguing that the sales slowdown is due to Hurricane Matthew that flirted with South Florida….. We disagree with that contention as sales have clearly been slowing for several months based on the data that we monitor.
Indeed as we indicated for the past couple of months - even The Standard & Poor's/Case-Shiller home price index - recognized as one of the best measures of home values because it tracks the price of the same house over time – also indicates that things are indeed slowing down in South Florida with the real estate market less frenzied than it was last year and the year before.
Anticipate a continuing transition ahead to a buyers market
Going forward we will definitely be keeping a continued close watch on prices, inventory levels and the number of closed sales.
If you’ve been considering taking advantage of the strength in the marketplace – now is a great time to sell ? … and for buyers…. The average interest rate for a 30-year fixed rate mortgage remains at near historical lows with an increasing amount of supply now available from which to choose.
Please give us a call for a confidential consultation at 561.395.8418 or email us at [email protected] - we’re here to help!