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How much do lower inventory numbers play in reduced sales?
I am the luckiest guy in the world. Not only do I have an incredible family and wonderful friends but I live in Paradise running around in shorts and flip flops working in the best industry in the world. And I get to do it during the craziest real estate market ever encountered and it is always interesting and challenging. I am honored to serve on the Agent Leadership Council of Keller Williams Realty (the BEST real estate firm in the world) and next week we head off to our family reunion where thousands of the best agents meet to learn more about the current status of our industry.
And the timing couldn’t be better as we are seeing metrics that I have never witnessed before. January sales figures in the northern Palm Beach County region point to a turning point that will continue to play itself out through the year. Every month at this time we report where sales came in the previous month and this month in our 6 reporting categories we have one that reported a 58% decrease in sales and one that reported a 350% increase. How interesting is that? Very interesting. So without further adieu we bring you the North County Sales Power Rankings;
#1 Juno Beach
#2 Tequesta
#3 Hobe Sound
#4 Jupiter
#5 North Palm Beach - down 38%
#6 Palm Beach Gardens - down 58%
Yes, I did say that sales numbers ranged from a decrease of 58% to an increase of 350% and now I am going to tell you this is great news for the continued recovery that seems to be gathering strength. How can a decrease of 58% be great news? Inventory is the answer and the main reason sales have stalled is a lack of inventory with a price and condition that buyers will react to. Believe me the buyers are out there ready to act on interest rates that can only be described at phenomenal. But the homes they are seeking aren’t out there. Sellers are asking higher prices for quality homes and either inventory with prices to match buyers expectations increases which is unlikely, or sellers will lower prices which is more likely or we continue this stalemate between the two parties to a transaction. Appraisals will be key as even if a buyer wants to pay a higher price and are borrowing money will the appraisal justify the price for the lender? Didn’t I tell you I was lucky?
This month’s 5th place finisher in our sales power rankings are single family home sales in North Palm Beach that decreased 38% from December sales numbers. In January we had 8 closed sales compared with 13 during the month of December. With these numbers we fell below the 12 month average which stands at 9.66 but did stay ahead of the 7 homes sold in January of last year.
While sales were slow in North Palm Beach last month they also remained heavily weighted in the lower price ranges with 75% of all sales below $300,000. No other properties with sales prices below $1,000,000 sold but we did have 2 sales in the ultra luxury home market above that number which represented 25% of the market. If there was any great news to report from the January numbers this would be it. The chart below shows the percentage of sales by price category for the month of January.
With three quarters of all sales below $300,000 we would expect to see a decrease in the median price realized and that is what we got. In fact we dropped to $217,500 from $320,000 and the 3rd lowest monthly total of the past year. This positioned us below the 12-month average which sits at $262,500 and well behind the median price sale of $500,000 we saw in January of last year. Are higher prices coming your way? Could be so keep tuned in and as always we will bring you the most accurate market information as it is available. The chart below shows median prices on a monthly basis over the previous 12 month period.
This crazy world of real estate is what I thrive on and nothing gives me more satisfaction than assisting others in finding that perfect home and negotiating the best pricing and terms or listing and marketing their current home to achieve the best results. Your free consultation is but a phone call away so if we can be of service in any way to you, your friends, family or colleagues please do not hesitate to give me a call. Easily reached at 561 308-1075 or via e-mail at tom@tompriester.com we are here to assist in any way that we can.
Always at Your Service,
Tom Priester e-PRO
"Results Driven Real Estate"
Keller Williams Realty
561 308-0175
tom@tompriester.com
