Friday, May 21, 2021 / by Carl Gentile
Quality of Life? Income Taxes? Work From Home?
The Northern Palm Beaches continues to set record after record in the local real estate market - but, a 34% increase in the median home price in Jupiter is unheard of! Just a year ago the median home price was $540,000. Today, the median home price sits at $722,000!
This is what we do all day, everyday and even for us getting use to seeing some of the asking and contract prices has taken a lot to get use to. But, this is the reality of where the Northern Palm Beaches real estate market is and is moving forward.
History repeats itself? Only twice before have we ever seen increases over 20% and that was 2004 (24%) and 2005 (30%), just before a serious market correction that impacted many. I have heard from many clients and potential clients that they are waiting for the crash and this was two years ago... but the story is deeper than just this years rise in prices. Last year we saw a 13% rise in prices which was the 9th straight year in a row that we saw prices rise above the national average.
There is fear in some knowing what took place in 2006 as we say a 38% drop in home prices during those next five years. Which is understandable. What we have to remind ourselves though, are the factors driving this market are not the factors that drove the market in 2004 and 2005. Historically low interest rates have helped soften the blow of home prices rising. Could home prices be reaching the peak? Yes, but maybe no? Comparatively speaking home prices in the Palm Beaches are a steal compared to the California market.
In five years will we be calling today's pricing a steal?
As I have said many times, the million dollar plus market continues to be the leading force in driving this market. As more and more businesses are relocating, remote working continues to remain mainstream, quality of life in the warm weather and crystal blue waters will drive wealthy families to the area. Million-dollar plus homes sales were up 351% in April with pending home sales up 291% compared to a year ago. The overall pending home sales are up 205% compared to a year ago. Home inventory is down for the 12th month in a row and down 71% from last year. There is little to choose from and quality homes are moving fast and often well over asking price.
While I did not live there and sell there, several clients from the area have mentioned this feels very similar to the home rise in California in 2011. This might not be a tech boom, but could this be a "remote working boom?" Quality of life and income taxes remain at the forefront of our weekly client conversations. Those two factors I do not see going away anytime soon. It's a lot to digest as a Buyer, but it's important to stay educated and stay informed as to where the market is and moving to when making offers in the Northern Palm Beaches.
As always if you ever want to chat the market or share your thoughts we encourage you to email the team at firstname.lastname@example.org with your questions, comments and concerns!
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Happy Home Hunting!