US government census bureau has just reported that May 2012 new single family homes sales increased 7.6% over Aprils, which is a healthy 19.8% above May 2011 sales. New home sales price in May 2012 was an average $273,900 with the estimated number of new homes for sale at 145,000 which represents a 4.7 months of supply.
In Palm Beach County May home sales were up 10 percent from last year
and 7 percent statewide as home buyers continue to find fewer choices
and stiffer competition. Our supply of single-family homes for sale in Palm Beach County
dropped to just over five months, nearly 60 percent below where it was
last year. The national supply of properties stands at about 6.6 months, last year at this time it was 9.1 months.
The National Association of Home Builders/Wells Fargo builder sentiment
index rose in June to 29, the highest reading since May 2007. Builder confidence was at a five year high and has risen in seven of the past nine months which goes hand in hand with the referenced census bureau findings. These facts all points to the housing market is in fact slowly improving.
Along with new sales volume sales of previously occupied homes rose near two-year
highs in April.What once was a buyers market has slowly turned into a more balanced market and in some locations even a sellers market. The day of low balling resale homes to try and steal them is not the rule any longer in fact it could be called the exception. Those owners who had to sell at any price did so already, lenders who were dumping foreclosure at below market prices are now pricing them much closer to fair market value. While these still represent a good deal they are by no means a great deal. In many locals homes priced in the $150,00 range and below are in short supply with multiple offers made by multiple buyers which can result in the price ending up higher then the ask. This is what is happening in the Palm Beach County market place, where the supply of these mid priced resale homes cant meet the demand, in fact their is currently a shortage.
However this is not to say the market is back because its not, homes for sale above this sweet spot in price are not enjoying the same success. The lower end is being bought up by first time home buyers, families that are downsizing and investors who pay cash. Once you get above $150,000 for a single family home is gets harder to find qualified first time home buyers and investors dont see as much opportunity to rent and reap double digit returns as they do from the lower end. So in Palm Beach County the higher end properties are not experiencing the same rebound as the lower end has. That being said it is getting better, just more slowly.
When looking at the Palm Beach real estate market your looking at something quite different than most markets because of the higher average income of Palm Beach residents, however the most recent stats provided by the Palm Beach board doesn't show across the board improvements. In the past year 5/1/11 through 6/1/12 the sales numbers show pockets of strength as well as weakness. Year over Year active listings declined by 5%, new listings grew by 12%, there was no change in properties under contract, the number of sales increased by an impressive 21% but the average sales price fell by 12%.
So in Palm Beach while sales were up, sales prices on average were down with an average Selling Price to Listing Price ratio of 85%, which means prices dropped on average 15% from the original listing price. This is in stark contrast to Palm Beach county averages where the low hanging fruit has been picked and so homes prices in many areas are being bid up rather then down, it all relates to supply and demand. Which brings me back to the Palm Beach where you have more supply then you have buyers and sellers who feel their homes are worth more then fair market value and so there is a stalemate. There are still sellers who want more for there properties then buyers are willing to pay and as a result these properties sit on the market waiting. In the mean time they are losing value every month by virtue of the monthly carry that the owners pay (condo fees, taxes and utilities) as well as losing the attention of the local market.
One of the problems Palm Beach County Realtors face is sellers of all stripes believing that there home is worth more then it is. Owners read about homes sale and extrapolate the positive news as being positive for them and justification to ask higher prices. What they forget is rebounds are area specific as well as price specific, this market does not treat all home vales equally and sellers need to understand this.
