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Home sales: Big supply of condos for sale in Palm Beach County as Surfside deadline looms
Article first appeared: https://eu.palmbeachpost.com/story/news/2024/12/26/condominium-sales-face-specter-of-surfside-collapse-as-deadlines-loom/77169918007/
It’s a buyer’s market for Palm Beach County townhomes and condominiums, with November’s inventory nearly double what it was in 2023 and median prices idling at about $310,000.
According to a report released Dec. 19 by the Broward, Palm Beaches, and St. Lucie Realtors Group, the months’ supply of condos and townhomes for sale in November was 8.8 months. That’s an 87% increase from the same time last year and above the 5.5 to 6 months’ supply considered a balanced market, where neither the buyer nor seller has the upper hand.
Statewide, there was an 8.2-month supply of condos and townhomes in November, an increase of 64% from the same time in 2023.
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The hike in inventory, which has been slowly gaining for months, comes ahead of a looming Dec. 31 deadline for some condominiums to complete a milestone safety inspection required in the wake of the 2021 Champlain Towers collapse in Surfside.
The potential for pricey assessments for repairs, and requirements that proper reserves be set aside, is likely forcing some condominium owners to rethink their living arrangements, said Jeff Lichtenstein, president of the Palm Beach Gardens-based Echo Fine Properties.
“Some condo owners have rented their units out at discounted pricing, but they are future shadow inventory that will come back on the market at the end of the seasonal renting season in April or May,” Lichtenstein said. “Until inventory subsides, expect the condo market to fare worse than the single-family home or townhouse market.”
The Realtors group that issues the sales report combines condos and townhomes into one category.
A market flush with condos, especially older units facing substantial fix-it fees, is attracting developers who see an opportunity to replace aging housing stock with new waterfront projects, said Jeff Margolis, a partner in the real estate department of the Berger Singerman Law Firm.
Margolis predicted condo prices will drop in 2025. November’s median price of $310,000 for condos and townhomes was 0.5% higher than last year.
“After the reserve studies are completed and the condos need to start collecting all the funds, you are going to have more and more owners that are willing to take less and less for their units because they just need to get out,” Margolis said.
He noted that climate-change concerns such as sea-level rise and more intense hurricanes aren’t putting a damper on developer zeal for waterfront land.
“They recognize it, but they say that’s an issue for the future. It’s not dissuading them,” Margolis said.
But it’s still a seller’s market for single-family homes
Inventory of Palm Beach County existing single-family homes for sale is getting closer to a balanced market but still slightly favored the seller in November, with 5.3 months’ supply of inventory. That’s up 36% from the same month in 2023.
Median sale prices settled at $600,000, which is equal to what they were in November 2023 after spiking to a record high of $659,999 in June 2024.
The average single-family home sale price was $1.07 million. That’s a 16% year-over-year increase and at least the 19th 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.
Of the 840 homes that sold countywide in November, just 46 sold for $249,999 or less. Nearly 180 homes sold for $1 million or more.
Lichtenstein pointed to the number of new pending sales and new listings, which were up in November by 4% and 5.2%, respectively, as signs that single-family home activity will increase from December through February. Closed deals in November were down 8% compared to the previous year.
But he noted that mortgage interest rates are still a wild card.
As of Dec. 19, the interest rate on a 30-year fixed mortgage was 6.72%. That’s up from the 6.67% from the same time in 2023, and more than double the rates from November 2021, according to Freddie Mac.
“If interest rates are close to 6%, buyers are making purchases. Go past 6.75% and markets slow down,” Lichtenstein said.
Statewide, single-family homes sold for a median of $410,700 in November, down less than 1% from the previous year. The average sale price was up 3.4% to $584,262.
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