Even more befuddling is the fact pending home sales have picked up over the past 30 days. Pending home sales in the Northern Palm Beaches are up 5.6% over the first half of October. Over the past 30 days they are up 7%. It is the first increase we have seen in 6 months.
People are putting homes under contract even with interest rates that rose again this week to the highest levels we have seen in 26 weeks. The average overnight rate on a 30 year fixed mortgage is up over 11% since the first of the year.
Sure, pending home sales are up recently, but all of that increase has been at the very top end of the market. That market segment where homes cost more than a million dollars. That market segment that has been driving this market and dragging prices for the entire market along with them.
You see, pending home sales above a million dollars had dropped 53% since April. A huge drop and then about a month ago something changed. People buying homes that cost over a million dollars all of a sudden started buying. Pending home sales at the top of the market have jumped an astounding 27% over the past month. Crazy numbers considering we are in the dog days of summer.
Pending home sales typically take 30 to 45 days to turn into actual sales. With the vast majority of the recent increase in pending sales above the million dollar price point, at some pointy they will once again start pressing median home prices in the Jupiter real estate market even higher. Perhaps to new highs. Not what the average home buyer wants to hear.
But more recently, actual sales, where pending home sales are finalized at the closing table have been slow. Actual sales of single family homes in the Northern Palm Beaches over the past month dropped to the lowest levels we have seen in 16 months. Median single family home prices in the area have dropped to the lowest we have seen in 8 months and today sit at $676,500. That’s another 2% drop so far in October.
One could say this pandemic is to blame, but it’s far more complicated than that. The governments policy of flooding the market with easy money, manipulated interest rates that were down as much as 30% since Covid came to town, and additional housing demand created by the pandemic have created runaway home prices that are not justifiable by any means, by anyone thinking clearly.
The middle of the market buyer has been priced out of Jupiter real estate. Over the past couple months they have been questioning if it really makes sense to pay today’s prices. More and more sales are running into appraisal issues. There has been a long standing issue in the Northern Palm Beaches of a shortage of new construction. While builders, over the past couple years, have found land, it’s way out west in most cases and make today’s prices look even more out of whack with reality.
Now we have inflation and rising interest rates. Now we have the million dollar buyer jumping back into the Jupiter real estate market with both feet. Inventory levels are so low its truly way past a serious matter. What happens from here is anyones guess. There are too many balls in the air and things can turn on a dime. If the economics of buying a home can upset your financial stability you should tread lightly and be very careful.
Make sure you are making informed decisions and understand all the numbers. Stay tuned, stay informed and if planning on doing anything real estate, interview brokers and ask a lot of questions. Paradise Sharks Real Estate loves to interview and loves to answer questions. We are not trying to sell you, we are trying to educate you so you can make informed decisions. We aren’t the biggest broker in town and frankly don’t ever want to be. We want to shower you with fantastic customer service at prices our competition can only dream about. If you would like to learn more, contact us anytime at email@example.com or 561.308.0175.