Palm Beach County home prices level off in October but sellers still have the advantage

Article first appeared: https://www.palmbeachpost.com/story/news/local/2024/11/22/palm-beach-county-home-sales-for-october-see-prices-level-off/76474896007/

Buyers paid a median price of $621,500 for a single-family home in Palm Beach County last month, about equal to the same period in 2023 but down from record summertime highs.

According to a report released Nov. 21 by the Broward, Palm Beaches, and St. Lucie Realtors Group, the stalled sales price came as inventories increased and properties sat on the market for 45 days before a contract was inked — twice as long as in October 2023.

October’s supply of homes stood at five months, which is nearly 40% higher than the same time last year but still gives the seller a slight upper hand. A balanced market, where neither the seller or buyer has an advantage, is considered when there is a 5 1/2 to six months’ supply of homes.

Broker Dan Begley with West Palm Beach-based Begley and Associates said even with the stagnated prices, which are down from June’s record $659,999, people are still struggling to afford to buy unless they are willing to take fixer-uppers or settle for less savory neighborhoods.

“You can find affordable housing, but it will need work. It will require some sweat equity,” Begley said. “Most of my clients are people looking for a second home and who are wealthy.”

Of the 1,052 homes that sold in October, a little more than half cost $600,000 or more. Just 23 homes sold for $199,999 or lower.

“Prices are just too high for working people,” Begley said.

The average sale price of a Palm Beach County single-family home in October was $1.04 million. That’s an 11% increase from last year and at least the 18th time since early 2021 that monthly reports noted average prices topping $1 million.

Realtors prefer to use the median price as a measuring stick because it isn’t as easily skewed by jumbo sales as the average price. The median is the midpoint where half of the properties sell for less and half for more.

Buyers were excited by recent Federal Reserve cuts to interest rates, including a quarter point drop this month to a range between 4.5% to 4.75%, but the reductions haven’t translated to significantly lower mortgage rates.

According to Freddie Mac, the interest rate on a 30-year fixed-rate mortgage on Nov. 14 was 6.78%. That’s down from last year’s 7.44% but up from 2.99% in October 2021.

“The Fed lowered rates, but when they did that a lot of people took that as a positive sign going forward and entered the market so the demand for loans increases and that puts upward pressure on mortgage rates,” said Shelton Weeks, the Lucas Professor of Real Estate at Florida Gulf Coast University.

Weeks said today’s interest rates are “very modest” compared to the double-digit mortgage interest rates of the 1980s. In October 1984, a 30-year fixed mortgage came with a 14% interest rate.

“I continue to tell anyone who will listen that we have been spoiled with artificially low interest rates,” Weeks said.

While single-family home sellers in Palm Beach County continue to have a small edge over buyers when it comes to months’ supply of inventory, the condominium and townhome market has swung fully to the buyers’ advantage.

There was about an eight months’ supply of condos and townhomes available in October. That’s a 90% increase from the same time in 2023. The median sale price was $305,000, which is down 3% from last year. And the number of condominiums and townhomes that sold last month was 742, a 19% drop from 2023.

Jeff Lichtenstein, president of Echo Fine Properties, said the supply of condominiums may be much higher than what is reflected in October’s report.

Although grouped together in the analysis, townhomes aren’t struggling with the same expensive assessments linked to new safety requirements that followed the 2021 Surfside condominium collapse.

Because there are more condos on the market, the prices sellers can get are lower than what many want, Lichtenstein said.

“In some of these buildings, they are going through the different stage of grief,” he said. “Sellers are having a tough time understanding where the real market is today.”