In May 2022, Palm Beach County showed a record rate of growth in home prices. This price rise is driven by high inflation. Even an increase in new supply does not help with the market cooling.
In May, the median price for private homes was $615,000. It is 2% higher than a month earlier, in April, and 30% higher than in May 2021. At the same time, the average sales price reached $1,000,000. This is the seventh time since March 2021 that the average housing price tag has exceeded the $1,000,000 threshold. Compared to May 2021, May of this year grew by 1.7% in this indicator.
Since last May, new housing supply has grown by 31% on the market, while the number of closed purchase transactions has declined by 19%.
Sales of townhouses and condominiums show a pronounced decreasing trend. In May, the MSI was 1.3 months for these categories (months supply of inventory indicates how many months it will take to sell all the available stock of real estate if the new supply stops hitting the market). A year earlier, the county's MSI for townhouses and condominiums was 25% lower.
In May, the median sales price for townhouses and condominiums in Palm Beach was $307,000. It showed a 23% growth in annual terms. Average selling prices reached $522,000. They showed an annual increase of 8.4%.
For comparison, in May, the median home price reached $420,000 around the state. It rose by 22% in a year. The MSI indicator was 1.4 months. It is an annual rise of 27%.
Generally, it was rather difficult to talk about the possibility of the market correction three months ago. Today, it is becoming more and more possible. This correction doesn't have to be difficult.
Palm Beach County is a housing market that creates the enabling environment for sellers and buyers. In this regard, it is well-balanced and steady. At the moment, the MSI indicator is 5.5 months. Usually, if the indicator is lower, then one can speak of the "seller's market". And if it is higher, we can talk about the "buyer's market". The median time to conclude a real estate purchase agreement is 11 days, as it was a year earlier, in May 2021.
The rising interest rates on mortgage loans remain the key problem. They scare potential buyers away. This also results in changes in the preferences of buyers who remain in the market.
From May 2021 until May 2022, the interest rate on the 30-year fixed-rate loan increased from 2.96 to 5.23 points.