June home sales break another price record as Palm Beach County housing inventory is choked

The median cost to buy an existing single-family home in Palm Beach County last month reached another blockbuster high, topping rates seen during the peak of the pandemic-triggered housing surge of 2021 and early 2022.

At $625,000, June’s median sale price was 1% higher than the same month in 2022, and $3,000 more than the previous record set in May.

The new high was outlined in a report by the Broward, Palm Beaches and St. Lucie Realtors Group released Thursday. Last month’s average sales price, which is more vulnerable to fluctuations based on very high sales, was $1.06 million, down 10% from the previous year.

A chronic lack of existing homes available for sale is a main contributor to driving up prices, as home sellers shy from trading ultra-low mortgage interest rates for the 6.78% noted Thursday by Freddie Mac, Realtors said.

About a three-months’ supply of existing homes were up for sale in June. That’s a small increase from 2.3 months in June of last year, but short of the 5.5 to six months’ supply that is considered a balanced market where neither the seller or the buyer is considered to have an advantage.

“The market is kind of stuck because people don’t want to move with interest rates so high,” said Jeff Lichtenstein, president of the Palm Beach Gardens-based Echo Fine Properties. “But the population growth here is an unstoppable train. We still have an influx of people coming in.”

A July 11 population report from the state’s Demographic Estimating Conference said Florida’s growth was “slightly stronger than expected” between April 1, 2022, and April 1 of this year because of a higher net migration of people coming into the state.

While deaths in Florida continue to outpace births, an average increase of 298,191 net new residents are expected each year through mid-2028. That’s 817 people per day.

“The increases are analogous to adding a city slightly smaller than Orlando, but larger than St. Petersburg every year,” the report noted.

Douglas Elliman Executive Director of Luxury Sales Bonnie Heatzig in Boca Raton said she continues to see a steady stream of people relocating from California. Prior to the pandemic, California clients were few and far between, she said.

“It’s unlike anything I have seen in my two decades of sales,” Heatzig said. “I ask them what is drawing them from California, and the No. 1 reason they tell me is crime.”

The lure of no state income tax is also hard to resist, even with rising insurance costs and high inflation, Lichtenstein said.

Statewide, the median sale price for a single-family home last month was $420,000, which is about equal to June of 2022. The number of homes available for sale was at a 2.8 months’ supply, up from 1.9 months during the same time last year.

A total of 26,071 existing homes sold statewide last month, which was down about 8% from June 2022. In Palm Beach County, the volume of existing homes sold last month dipped just 3% compared to the same time last year.

The high prices in Palm Beach County concern Realtor Rebel Cook, who worries first-time homebuyers and middle-income earners are being pushed out of the market.

“To me, we’ve almost become the new California when it exploded with growth and money,” she said. “People are complaining about paying 7% interest, but over the scheme of history, that isn’t that high.”

Just 43 single-family homes sold for under $250,000 last month in Palm Beach County. There were 329 homes that sold for $1 million or more.

June’s high price news comes as leading real estate data and analytics company CoreLogic identified four Florida markets where the likelihood of a price decline over the next 12 months was “very high.”

Those included Sarasota, Lakeland, Cape Coral and Port St. Lucie.

CoreLogic Chief Economist Selma Hepp said Palm Beach County has a lower likelihood of a price decline because it benefits from a “relatively higher in-migration of households with higher income (from the Northeast and other areas).”

Palm Beach County’s condominium and townhome sales saw a 3.8% decline last month from June 2022 with 1,204 deals closing. The median price for a townhome or condominium was $325,000, which was a 4% increase from last year. The average price was $550,437, a 13% increase.