A revival in Palm Beach County home prices lured more than 2,300 new listings onto the market last month, a 5-year high that should help replenish an emaciated inventory that is nearly half of what it was in 2012.
Median sale prices on single-family homes were up 16 percent in August from last year to $250,000, while closed deals also rallied with a 17 percent jump, according to a report released Thursday by the Realtors Association of the Palm Beaches.
Statewide, August’s median sales price increased nearly 19 percent from the same time in 2012 to $175,000. The number of new listings grew 17 percent from last year to 23,639.
“It’s like a switch went on and all of a sudden everyone is listing as if it’s 2005,” said Sherry Lee, broker-owner of Lee Property Sales in West Palm Beach. “I think sellers are seeing their opportunity to get in.”
The upswing was seen nationwide where August home sales were the highest they’ve been since February 2007 and inventory ticked up 0.4 percent. The National Association of Realtors measured a 1.7 percent increase in sales, bringing the annual rate to 5.48 million.
At least one economist attributes the sales spike to homebuyers rushing to lock in mortgage interest rates that, while rising, are still at historically low levels. The national average for a 30-year fixed-rate mortgage rose to 4.46 percent in August from 4.37 percent in July, and was the highest since July 2011 when it was 4.55 percent, according to federal mortgage backer Freddie Mac.
Lawrence Yun, chief economist for the National Association of Realtors, predicted uneven sales in the months ahead that will be affected by “several market frictions,” including interest rates, loan availability and inventory restrictions.
While new listings increased in Palm Beach County, there is still just a 4.8 months’ supply of homes for sale, down from 8 months during the same time last year. A 6 months’ supply is traditionally considered a good balance between supply and demand.
“It’s becoming more of a sellers’ market,” said Barb Kozlow, president elect of the Realtors Association of the Palm Beaches. “Homeowners have more confidence listing their homes for sale realizing buyers are eager to purchase.”
The lack of inventory was partly responsible for the rapid gain in prices seen since the start of the year in Florida. With more homes on the market, price increases should slow and may already be reflected in August’s numbers.
Palm Beach County prices on single-family homes were nearly even with July but down 5 percent from the year’s high of $265,000 set in April. The median sales price statewide was down 1 percent from July.
That’s good news for such buyers as Atlanta resident Keith West, who is looking for a Palm Beach County home for when he and his wife retire in a two years. He’d also like to buy something for his daughter.
With a price range of $650,000 to $750,000, West said he was able to see 28 homes when he visited in March. But the budget for his daughter is more in the area of $150,000, where inventory is limited.
“If I do a search online I’ll get six pages of results but eight out of ten of the listings will be under contract,” West said. “The market, especially in the Jupiter area, is definitely eaten up.”
In August, 280 new listings were put on the market with asking prices of between $150,000 and $199,999, an increase of 21 percent from last year.
But at that price, buyers are also competing with cash investors. About 47 percent of Palm Beach County’s single-family home sales in August were cash deals.
The median price for a condominium in Palm Beach County last month was $115,000, a 30 percent increase from last year. But the volume of condo sales slipped 19 percent to 991.
Lee said she’s concerned that buyers still think they’re going to find a rock-bottom deal, while sellers overestimate their home’s value.
“That’s been the rub,” Lee said. “There might be more listings, but they are listing at unrealistic prices.”