Palm Beach County’s housing market was hot for pricey homes in July. For the first time, sales of homes costing $600,000 and above jumped double digits percentage points compared to the same month last year.
Sales of homes priced at $1 million or more rose an astonishing 30.6 percent in July, compared to July 2017, according to the Realtors of the Palm Beaches and Greater Fort Lauderdale.
In the next lower price category, home sales in the $600,000 to $999,999 range also rose double-digits, clocking in a 26.6 percent year-over-year increase.
“It’s the first time we’re seeing a spike in this price range,” said Jeffrey Levine, president-elect of the Realtors organization.
Levine said it’s difficult to determine the reason for the higher sales based on only one month’s results. He said it’s likely the sales volume increases in these high-priced home categories could be linked to the delivery of new homes in the county, particularly in southern Palm Beach County, where GL Homes is building a number of new housing communities.
GL Homes is selling homes in its Berkeley, Seven Bridges, Dakotah, Valencia Cove and Valencia Bay communities, said Marcie DePlaza, GL Homes chief operating officer.
In July, about 45 percent of the company’s 57 closings consisted of homes priced $600,000 or higher, DePlaza said.
July also was a good month for sales that will close in the future. Last month, some 19 homes costing $600,000 or more went under contract.
DePlaza said that some of the sales have come from changes to the tax law. “We’ve seen a lot of interest from the Northeast from buyers coming down to the area, and we feel we’re going to have a strong season,” she said.
The sales results continue to drive up median home sales prices, said Levine, of Keller Williams Realty in Boca Raton.
Overall, the median price of a single-family home was $350,000, down a notch from June’s $355,000 record high but still 4.2 percent higher than July of 2017, when the median price of a home was $336,000
The number of closed home sales rose last month to 1,534, from 1,509 the same month in 2017.
But inventory continued to shrink.
New single-family homes listings totaled 1,913, down 4.9 percent from 2,012 in July 2017. There were 6,723 active listings in July, down 5.1 percent from 7,086 in July 2017.
Levine said inventory “still is historically low, the lowest since Hurricane Irma, in all price ranges with no increase in any category.”
Palm Beach County has only a 4.7 percent month supply of homes, down a bit from 4.8 percent in July 2017.
Low inventory shuts out buyers who can’t afford to pay high prices, giving sellers an upper hand, to a degree, Levine said. But he noted: “People aren’t going to overpay for a property.”
A house that needs a new roof or has an outdated kitchen and is listed at a high price will sit. “People don’t want to pay top dollar and then have to put in another $40,000 to $50,000,” Levine said.
And if an existing home is priced near the cost of a newly built house, buyers will tend to favor the new construction, Levine said.
Meanwhile, cash still continues to be king. Some 517 homes were paid in cash, up 8.8 percent from July 2017, when 475 homes were cash deals.
Sellers still are selling properties near their asking price, with homes selling for 94.7 percent of the original list price, barely down from 95.1 percent in July 2017.
Sales are taking longer to close, however. The median time to contract was 47 days last month, up from 37 days in July 2017. And closing periods have stretched to 91 days from 84 days.
Condos and townhomes also reported strong sales in July. There were 1,180 closed sales in July, up 9.8 percent compared to the same month last year. The median sales price was $177,000, the same as June.
The hottest sales activity was in the $250,000 to $299,999 range, which reported a 27 percent increase in sales compared to last year.
Levine said townhomes now are considered the affordable housing price range because so many buyers are shut out of owning more expensive single-family homes.