Palm Beach County home prices reached their highest level in nearly a decade in June, when the median price of houses sold by Realtors rose to $345,000.
The typical sale price jumped nearly 8 percent from a year ago, a robust level of appreciation that’s renewing boomtime concerns about housing affordability in Palm Beach County.
READ ALSO: Palm Beach mansion prices bounce back
The county’s median home price last topped $345,000 in late 2007. Back then, prices had been inflated by loose lending standards and a speculative frenzy. Today’s price rise is driven by economic fundamentals.
“It’s a supply-and-demand factor, and there’s still a lack of inventory,” said Jeffrey Levine, first vice president of the Realtors of the Palm Beaches and Greater Fort Lauderdale and a broker at Continental Properties in West Palm Beach.
The inventory of houses for sale fell slightly to just over 7,000 listings, the Realtors Association of the Palm Beaches and Greater Fort Lauderdale said Monday. That’s just a 4.7-month supply of homes.
While declining inventories would seem to reflect a raging seller’s market, there also are signs that buyers are pushing back. Houses are taking longer to sell, as reflected by an increase in the median time to contract of 46 days, up from 43 days in June 2016. And homes sold for just 94.7 percent of their list price, down from 94.9 percent a year ago.
“Buyers are picky,” Levine said. “Buyers will pay for property if it has all the amenities and features.”
However, many buyers avoid properties that need significant renovations, Levine said.
Meanwhile, rising prices have the unexpected side effect of locking many homeowners in their properties.
“People don’t have a lot of motivation to sell and then buy, because what are they going to move up to,” Levine said.
Palm Beach County condos and townhouses also are appreciating quickly. The median price of condos and townhouses sold in June was $172,500, up nearly 7 percent from June 2016.
Nationally, home prices hit a new record in June. The median price of houses and condos sold in June was $263,800, up 6.5 percent from June 2016, the National Association of Realtors said Monday.
In Palm Beach County, however, home prices still remain well below record levels. During the housing bubble, the county’s median resale price peaked at $421,500 in November 2005. Within a few years, the median price had crashed to less than $200,000.
Palm Beach County’s housing market has yet to return to pre-bubble patterns. For instance, construction of entry-level homes has ground to a near-halt over the past decade.
“The land prices are so expensive that builders just cannot build an affordable house,” said Henry L. Kaplan, sales manager at Century 21 Tenace Realty in Boynton Beach.
But Palm Beach County’s housing engine is sputtering back to life. In the largest project, Minto Communities plans 4,500 homes at Westlake, a newly incorporated city on the site of the former Callery Judge citrus grove. The builder has yet to divulge details about prices.
And in Riviera Beach, builder 13th Floor Homes is marketing 250 houses and 250 townhouses in a community known as Arbor Parc. Many of the houses are priced at less than $300,000, a rarity in a market where new houses typically sell for $500,000 or more.