The sales of single-family houses in Palm Beach County dropped in January. Over the first month of the current year, 33% fewer deals were closed than over the same time last year. However, the supply continues to increase, so buyers have more choice and more leverage in negotiations.
A report published by Broward, Palm Beach and St. Lucie Realtors Group shows that only 794 existing homes were sold in January at a median price of $582,500, which is 10.6% more than in January 2022 but lower than the July peak of $620,000.
The average value of sold properties was $1.08 million, which is 32% more than last year. The average value of single-family houses sold in Palm Beach County surpassed $1 million four times during 2022: in February, April, May, and June.
The dropping sales volume increased the inventory to 3.4 months in January, which is 209% more than in the same period in 2022. A balanced housing market where neither buyers nor sellers have a distinct advantage is supposed to have 5.5 months’ worth of inventory.
Despite these numbers, real estate agents are divided on who has the advantage in the current post-pandemic market.
Steve Simpson, a real estate sales agent, believes that Palm Beach County has become a buyer’s market. “No doubt about it,” Mr. Simpson, Realtor at William Raveis Realty, says. There are many buyers but they are not doing anything and are waiting for better terms. Over the past few months, Mr. Simpson has seen asking prices of upscale properties drop regularly, even in his own deals. For instance, he eventually sold a house near North Palm Beach for $945,000, while the initial price was $1.5 million and the subsequently reduced price, $1.2 million.
Brian Gleeson, a broker from Corcoran, however, is confident that the waterfront Palm Beach County is still a seller’s market, as wealthy buyers come here from the northeast, and locals tend to rent existing homes. Mr. Gleeson, who mostly deals with real estate in Lake Worth Beach to the east of Dixie Highway, says that he has recently sold a home in a historic district of College Park for $16,000 above the asking price. Mr. Gleeson explains that he has had 27 viewings over three days and received seven offers over the first week, which is a great result for a cash transaction.
According to Redfin, 10.5% of single-family houses in West Palm Beach were sold at a price higher than the asking rate last December. This is less than last April’s 41%. In December, about 8% of houses in Jupiter were sold above the asking price, compared to 49% in April. In Boca Raton, 5.3% of single-family houses were sold for more than the asking price in December and 44% last April.
House sales in Florida dropped by 32.5% in January compared to the same period of 2022. The median value of property sold in the state grew by 4% in January compared to last year, reaching $389,990. The average value was $558,253, which is 5% more than in the same period of 2022.
Sales of apartments and townhouses in Palm Beach County reduced by 38% in January compared to the same period of 2022. The median value of such residences was $299,000, i.e., 13% more than last year. The average value reached $467,129, which is 10% more than last January.
Although almost 50% of single-family houses sales in January were cash transactions, as people wanted to avoid higher interest rates on mortgage loans, Mr. Simpson is certain that no one is completely free from the effect of the high rates on the economy. Potential sellers may decide against listing their home for sale if they have to get a new mortgage at a higher rate to purchase a different property.
According to the government-sponsored Freddie Mac, the fixed interest rate on a 30-year mortgage was 6.32% in mid-February. This is lower than 7% in November but two times higher than in February 2021.
Douglas Elliman, a firm specializing in luxury properties, observes that some sellers now make bigger concessions than in recent past. The market seems to change but the pendulum has not swung to the ultimate point yet.
It generally takes more time to sell a property nowadays. In January, homes spent an average of 41 days in the market before a buyer ready to close the deal would arrive. This is 173% longer than the 15 days it took to sell a home in January 2022.
The market has cooled down and sellers can no longer set sky-high prices and expect a buyer ready to close the deal to arrive in a few hours, Mr. Gleeson believes. Nevertheless, some sellers are still trying to play rough.