Palm Beach County home prices continued to rebound in June, a month when the median price of a single-family home hit another post-crash high.
The typical house sold by a real estate agent last month cost $355,000, up slightly from $354,000 in May and $345,000 in June 2017, the Realtors of the Palm Beaches and Greater Fort Lauderdale said Monday.
Reflecting a tight market, sales volumes fell: 1,805 houses were sold by Realtors last month, down 2.7 percent from June 2017.
Another challenge: The inventory of homes for sale in Palm Beach County remains low, with a 4.8-month supply of houses on the market, Realtors said. There were 6,858 houses for sale in June, a 2 percent decline from a year ago.
The lack of supply gives sellers an advantage. The typical home sold last month went to contract in just 43 days, down from 46 days in June 2017.
Houses priced at $200,000 to $250,000 occupied the hottest spot in Palm Beach County's housing market in June. Properties in that price range found a buyer in a median of just 27 days.
Buyers of entry-level homes are forced to act fast, and to accept a smaller house or a less-desirable neighborhood than they might have hoped for. And, in many cases, buyers must not only come up with a down payment but also money for renovations.
“The average entry-level buyer cannot touch new construction in Palm Beach County,” said Henry Kaplan, sales manager at Century 21 Tenace Realty in Boynton Beach. “A lot of these older houses need a roof or air conditioning.”
By contrast, mansions priced at $1 million or more needed 129 days to go to contract -- although that was a decrease from a year ago.
The trends were similar in the condo and townhouse market. The typical Palm Beach County condo that sold in June fetched $190,000, up 10 percent from a year ago. The number of sales rose slightly from June 2017
In Palm Beach County and nationally, home prices are being spurred upward by the combination of a strong job market, rising wages, a lack of new construction and an influx of millennials who finally are moving out of apartments and into houses. National home sales keep dwindling among a lack of supply.
“The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market,” Lawrence Yun, chief economist at the National Association of Realtors, said Monday. “What is for sale in most areas is going under contract very fast and in many cases, has multiple offers.”
Palm Beach County home prices remain well below record levels. During the housing bubble, the county's median resale price peaked at $421,500 in November 2005 (a sum that adjusted for inflation equates to $537,517 in today's dollars).
Within a few years, the median price had crashed to less than $200,000. Palm Beach County's job market, which is closely tied to the housing market, went through boom and bust during the housing bubble and the Great Recession.
The county's unemployment rate fell as low as 3.2 percent in the spring of 2006, then soared to a peak of 12 percent in the summer of 2010. Palm Beach County's labor market has shown mixed results in recent years.
While the county's unemployment rate stood at just 3.9 percent in June, job growth has been tepid. The number of jobs grew just 0.5 percent from June 2017 to June 2018, according to state economists.
Meanwhile, mortgage rates have begun their long-anticipated rise, reaching 4.52 percent last week. In separate forecasts, the National Association of Realtors and real estate information firm CoreLogic say the average rate on a 30-year loan will hit 5.1 percent at end of 2019, the highest in 10 years.