Proof Why This Real Estate Market Will Stay STRONG For 2021

Dated: November 3 2020

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Today I'm talking about the Palm Beach County general real estate market and oh my what a difference a year makes…

The numbers are staggering. Note: If you’re a numbers person, this essay is for you. But if you’re someone who likes to feel how things are going… feel this: Right now, the real estate market is on FIRE!

So, whether you're a realtor like me, and you're looking at historical information and seeing where we are today and going to the future… or you're a buyer or a seller, pay attention, the market is dynamic. 

 

At the end of October, market information came out for all of Palm Beach County. It looked at this September over September 2019.

 

Active Listings are way down. As you can see in the chart, we have right now about 4100 properties available, which is down 33% from last year. Now look back to 2018 properties and see active listings are down almost 50%. So, consumers are gobbling up inventory.

Active Inventory

 

And the Monthly Supply of homes dropped to about 2.9 months, which is almost a 33% drop from 2019. In 2019, there was about 4.3 months… and in 2018, almost six months. So, think about that for a second, in the last 24 months that the monthly supply of homes has dropped over 60%. Have a look:

This means it’s clearly a seller's market. 

 

If there was not one new listing taken today, we'd have almost three months left of inventory before there's nothing to sell.

 

Next are Closed Sales. They are UP about 28% this September versus a year ago. That's a lot of transactions happening.

 

Then we have Dollar Volume, which is the total dollar amount of properties sold during that period. It’s up 48%. Same period in 2019 saw $700 million in sales throughout Palm Beach County… to now over a billion dollars.

 

Then we have Median Time To Contract.  This is the time that from taking a listing to the time that a home goes under contract. It’s down 50%. What that's telling us is properties that are priced right, are selling faster than ever.

 

And here's the important thing about this data: we're talking apples to apples. We're talking September to September. We're talking right after summer's over when school starts. Typically, that's a slower time of the year. But this year, these numbers are staggering.

 

One of the reasons why is interest rates. As you can see, a year ago interest rates were right around 3.75%. Today rates are hovering at about 3%. That's a major difference for potential buyers. Folks that a year ago could buy a house for about $350,000 with let's say 20% down. Today, they can increase their purchasing power to about a $425,000 or $450,000. So, buyers are getting a lot more bang for their buck.

 

I could go on and on with more data points. But the thing is, this is very exciting.

 

The real estate market is in a “once-in-a-lifetime” mode. It’s a rare situation. For buyers the cost of money is cheap! And for sellers, prices are at their highest ever. History shows these situations won’t last long.

So, let me talk to you buyers first. If you went out and bought a home today at 3% for the next 30 years, you're going to lock in your monthly expense for 30 years. It doesn't get better than that. Money is cheap.

 

And if you're a seller, prices don't stay high forever. Rarely do markets like this last forever. They will soften or come back down. When that happens, I don't know.

 

But we're going into high season here in Florida. We're going to the fourth quarter, when we begin seeing an influx of people coming down – the snowbirds. That's when numbers skyrocket further.

 

That's the third quarter market update for all Palm Beach County. I'll be back at the end of January for a look at what transpired in the fourth quarter.

 

So, if you've been on the fence about selling your house in 2020, please call me free consultation. I'll come to your house, we'll talk about the value of your property and put a strategy together so that you can get your property sold quickly.

Take advantage of today.

 

Buyers are struggling to find good inventory to buy. And they are eager due to low rates. But we can’t transact with such low inventory. We need more homes to sell.

Blog author image

John Wieland

My real estate passion began almost 30 years ago. It was Orange County, California 1989, when my friend and I began a property management business. We focused on apartment buildings in lower social-....

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