Boca Raton and Palm Beach County Real Estate Market Update June 2019

Boca Raton and Palm Beach County Real Estate Market Update June 2019


Hi there! This is Gia Freer with Palm Beach Premier Real Estate. Welcome back to our video blog. And I have today the
local market report for Boca Raton and Palm Beach County for June 2019. So let’s
take a close look at the numbers that came out from the Realtors Association
of the Palm Beaches. Now the message this month from us here at Palm Beach Premier
Real Estate is that sales are down as days on market and days to secure a
contract they jump higher. So we’re going to take a close look at those internal
numbers and there’s quite a bit of information that I am going to be
sharing. So what we’re seeing is the following – #1 the median sales price of a single-family home in Palm Beach County
was $357,000. Now that’s down from last month and about the same level
a year ago; #2 the number of housing units sold are down sharply from
last month and significantly from a year ago; #3 the inventory of homes for sale in Palm Beach County
it has leveled off; #4 trends were a little different with the condo
and townhouse market. A typical Palm Beach County condo that sold in June
fetched a $190,000 – it was identical to a year ago. #5 luxury homes – they are continuing to take significantly longer
to sell and #6 so the amount of time that it took to get a contract, from
the point that a property got listed, jumped another 16% versus last year for
single-family homes and so properties are now taking closer to 60 days to go
under contract. So what does that mean for sellers – well that’s a really great
question and here’s what it highlights. It highlights just how important it is
to price the property competitively and by that what I mean is, you know, to
price it close to what sold most recently and what that does, in this
marketplace, because we’re starting to transition to a buyers market, it really
is a beauty contest and a price war! Especially when it comes down to that
pricing. So clearly, you know, as we’ve mentioned for the last several months,
the housing market is facing some headwinds and some significant downward
pressure in the marketplace. Again I want you guys to consider three important
factors. #1 we’ve reached the top of a real estate cycle. Real estate
cycles run every 7 to 10 years. The bottom of our cycle was 2008 the top
was 2018 so it stands to reason that we are going to be shifting. #2
we’ve reached the top of a debt cycle. We’ve had 4 interest rate increases
in 2018 – 9 in all in that 10-year period and that has created headwinds
with consumers that are highly leveraged. Now, for every 1% increase to the
mortgage rate, it actually impacts the buyer, their buying power, by 10%.
Okay, #3 buyers have price fatigue. Property values have increased
more than 40 percent in the last ten years, since 2008 so I guess it would be
11 years now, and wages just have not caught up. The wages are probably at 10%
increase during that same time period so something’s got to give. So what we’re
doing is we’re gonna try and look ahead for the rest of 2019 and this is what
we’re seeing based on the trends. First, the average household’s cost to service
debt, it’s reached a point where it has become more difficult and more
challenging to find buyers who can qualify for a conventional mortgage. Second,
housing affordability issues are going to continue to be a theme moving forward. Third, inventory is going to continue to increase, prices are going to
soften and properties will likely take longer to sell. Fourth, the effects of the
worldwide economic slowdown will be felt here in the United States throughout
2019 and into 2020 and it will have a knock-on impact in housing. Finally, it’s
surprising that the nationwide media and industry experts have not focused on the
economic data that shows that on a national level existing home sales have
fallen for 17 months in a row. Furthermore the Federal Reserve is now
leaning towards a cut to the feds funds rate and we will know specifically what their
proposed medicine is likely going to be in just a few days. So, keep in mind,
interest rate pauses and cuts are a sign of economic weakness not growth. Going
forward, we’re definitely going to keep a close watch on inventory levels, interest
rates, and the number of closed sales. So if you would like a confidential
consultation with us here, if you’re thinking of buying or selling real
estate, we would love to talk to you. Our phone number and email is below and it
is 561.395.8418 and our email is [email protected] and again this is Gia Freer. I want to say thank you for
watching and I hope you have a wonderful week

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