Continuing a trend of rising property values, Palm Beach County home prices hit a new post-crash high in May.
The median price of a single-family house sold last month was $354,000, the Realtors of the Palm Beaches and Greater Fort Lauderdale said Wednesday. That's up slightly from April's median of $350,000, and a 5.7 percent increase from May 2017.
The continued rise in prices has renewed concerns about the affordability of housing in Palm Beach County.
“It’s kind of scary seeing prices go up like this again,” said Randy Bianchi, broker-owner of Paradise Properties in West Palm Beach. “Where do working people start out?”
Reflecting a tight market, sales volumes fell: 1,721 houses were sold by Realtors last month, down 2.7 percent from May 2017.
One headwind comes in the form of rising mortgage rates. Another challenge: The inventory of homes for sale in Palm Beach County remains low, with a 4.9-month supply of houses on the market, Realtors said.
There were 7,078 houses for sale in May, a 2 percent decline from a year ago.
Meanwhile, mortgage rates have begun their long-anticipated rise, reaching 4.62 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.
Houses priced at $150,000 to $200,000 occupied the hottest spot in Palm Beach County's housing market in May. Properties in that price range found a buyer in a median of just 29 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.
“It’s an extreme challenge if somebody says they’re limited to $200,000 or $250,000,” Bianchi said.
By contrast, mansions priced at $1 million or more needed 177 days to go to contract -- a 30 percent increase from a year ago.
The trends were a bit different in the condo and townhouse market. The typical Palm Beach County condo that sold in May fetched $175,900, off 2 percent from a year ago. The number of sales rose 3.9 percent from May 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.
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 $536,662 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 fell to 3.3 percent in April and May, a 12-year low, job growth has been tepid. The number of jobs grew just 0.1 percent from May 2017 to May 2018, according to state economists.