Palm Beach County home sales see higher prices in 2024 but market may be balancing
Palm Beach County’s housing market inched closer to putting buyers and sellers on a more equal footing last month with the number of existing homes for sale nearing pre-pandemic levels, but stubborn interest rates may dampen enthusiasm.
A report released Feb. 22 by the Broward, Palm Beaches and St. Lucie Realtors group found the months supply of inventory of single-family homes in January to be 4.2 months, which is 23.5% higher than in January 2023 and nearly the same as January 2020.
A balanced market where neither the buyer or seller has the advantage is considered a 5.5 to six months' supply.
With the sellers keeping the upper hand, median sale prices in January reached $615,000, an increase of 5.6% compared to the same time in 2023 and not far from the record June (2023) high of $625,000.
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The average sale price on existing single-family homes in January was $1.17 million. That’s an 8% jump from the previous year and at least the 11th time since early 2021 that monthly reports noted average prices topping $1 million.
Realtors prefer to use the median price as a measuring stick because it is the midpoint where half of the properties sell for less and half for more. It isn't as easily skewed as the average price, which can have steep fluctuations based on a bulk of lower-end sales or a mega-sale such as the $32.5 million purchase last month of a Manalapan estate.
Mae Ferguson, senior global real estate advisor at Sotheby’s International Realty in Palm Beach, said some homes in price ranges between about $2.5 million and $7 million aren’t moving unless they have unique qualities or have been completely renovated.
In general, homes sat on the market in January for a median of 82 days, which is down 3.5% from the same time last year. The number of closed deals last month was 811, which is about 2% higher than the previous year.
Still, Ferguson said “people are out looking, finally.”
“They are starting to realize that we were in a bit of a unicorn situation before with those super low interest rates,” Ferguson said. “When my parents bought in the 1980s their interest rate was 20%. So, where we are isn’t great, but it’s not the end of the world. You can always refinance.”
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Mortgage rates increased for the third consecutive week as of Feb. 22 with a 30-year fixed rate mortgage hitting 6.9%, according to Freddie Mac. That’s up from 6.5% a year ago and 2.81% in mid-February 2021.
It’s down from a recent October high of 7.79%, but Freddie Mac Chief Economist Sam Khater said in a statement that a strong economy and dogged inflation of 3.1% has led to higher mortgage rates this year as the Federal Reserve tries to shrink inflation to 2%.
Federal Reserve Gov. Christopher Waller said this past week he wants more evidence of inflation cooling before cutting interest rates.
“When I last spoke on January 16, the data we had received up to that point was very good,” Waller said Feb. 22 in prepared remarks.
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Since then, he said information on gross domestic product (GDP), job growth and inflation “came in hotter than expected.”
For home sellers, higher interest rates may make them hesitant to sell and give up their lower interest rate, which means fewer homes on the market.
Last month, there were 4,900 single-family homes listed for sale in Palm Beach County. That’s up 16% from the previous January, but down 22% from January 2020.
Florida Atlantic University housing economist Ken H. Johnson’s December market report for South Florida, which includes Palm Beach, Broward and Miami-Dade counties, showed home prices were 36% higher than where they should be based on long-term trends.
“Our prices should be leveling off,” Johnson said in a release. “While I do not think we will have a crash like we did 16 years ago, this is not a good sign.”
The epic housing bust of 2008 was caused by sub-prime loans and adjustable-rate mortgages that are largely no longer in use.
Condominium and townhome sales in Palm Beach County did reach a balanced market in January with a 5.8 months’ supply of inventory. The median sale price was $325,000, which was 8.7% higher than the same month last year.
Statewide, the median sales price for an existing single-family home was $405,000, a 3.8% increase from 2023. Median prices for condominiums and townhomes were up 3.2% from last year to $320,000.
Kimberly Miller is a veteran journalist for The Palm Beach Post, part of the USA Today Network of Florida. She covers real estate and how growth affects South Florida's environment. Subscribe to The Dirt for a weekly real estate roundup. If you have news tips, please send them to kmiller@pbpost.com. Help support our local journalism, subscribe today.
This article originally appeared on Palm Beach Post: Home sales in Palm Beach County January report shows higher prices
