If you have not noticed, these days the Fed has injected trillions of dollars into the world to keep the stock market booming but there seems to be little correlation with what is happening in the economy and what is happening on Wall Street.
There is also little correlation to what is going on with the economy and what is going on in the world of real estate here in the Northern Palm Beaches. You see, in the United States at this moment, there are over 33 million unemployed people. This country’s national debt is closing in on $27 trillion dollars and our unfunded liabilities just crossed over the $153 trillion dollar mark. Almost half the country does not pay income taxes and over the half the country is on some sort of government subsidy. The hate in the streets is at the highest level we have seen in the 277 year history of this country. President Trump is promising another round of stimulus money that has been described by some as “shock and awe”. But Jupiter home sales, well they are off the chart.
As of today, pending home sales in the Northern Palm Beaches just hit multi-year highs. In fact, they have not been higher since May 1, 2018. That was 26 months ago. Don’t they know we are in the middle of a pandemic that many say will last for at least 2 years. Evidently not, as pending Jupiter home sales and those throughout the Northern Palm Beaches, just made their second straight ginormous monthly leap. Up 26.9% in June and 19.9% ahead of year ago levels. And to think the economy may recover in just 4 to 5 years.
You think those numbers are disconnected in an economy where this countries national debt sits at 132% of our Gross Domestic Product. It's the fourth worst debt to GDP ratio in the entire world. If you think the overall market numbers are crazy, then check out the top end of the market. You see, at the top end of the market, Jupiter home sales have never been better. In fact, they have never even been close. Pending home sales of homes with list prices above the $1 million dollar threshold in the Northern Palm Beaches just hit an all time record high. What’s crazy is that have soared beyond the old record by over 23%. Did you hear what I just said. Pending home sales of $1M+ homes in the Jupiter area are 23% higher than we have ever seen before in history. They are up an amazing 40% in one month and currently sit 100% above last year’s numbers. And last year we set an all time record high. I can’t wait for this economy to recover. Thankfully according to the President of the Federal Bank of San Francisco we may only have to wait for 4 to 5 years.
To make things even crazier, interest rates are plummeting and sit at the lowest levels in history. With our national debt exploding, the odds are high they will go even lower. The number of homes on the market is also near an all time record. An all time record low. This afternoon, the inventory of properties for sale in the Northern Palm Beaches is within 7 units of the worst numbers we have seen in well over a decade. We just experienced our third straight monthly drop and over the past 30 days they have dropped over 10%. Compared to a year ago numbers, inventory is down almost 15%.
Distressed sales are almost non-existent. In fact, on our Multiple Listing Service the number of homes that are either short sales, or bank owned foreclosures, are at the lowest levels we have seen since the great real estate bubble of 2005/2006. This afternoon, there is not a single distressed condo on the market. Yes sir, there is a serious disconnect to an economy where many project that 40% of the jobs lost during this pandemic are not coming back. In an America where over 60% of the country has less than $400 in their savings account. Where we are most likely going to see foreclosures and bankruptcies at levels this country has never seen. And the President of Federal Reserve Bank of San Francisco says the best case is an economic recovery 4 to 5 years down the road.
With sales through the roof, with inventory at historic lows, home prices should be soaring. They aren’t. In the Jupiter area, median condo prices dipped below $250,000 as of June 15th for the 1st time in 6 months and have pulled even lower since then. Median single family home prices during June pulled back to the lowest prices we have seen since March.
It’s hard to say exactly what is going on, but my bet is with the huge gain coming our way in $1M+ closings we should see median prices hit new highs. But it’s hard to see any reason for this growth at the very top end of the market to continue over the long term. No doubt people with money are flocking to Florida, in large part to the Trump administrations tax cuts, and especially the inability to any longer deduct state income taxes from their federal tax liability. What might happen if Joe Biden is actually elected in November. Ponder that for a minute, or two.
Right now, things have never been better in the Jupiter area real estate market, especially at the top end but there are lots of questions. There is this virus, there is hatred on our streets and there is a disconnect. Keep informed, pay attention and do not be afraid to ask questions and seek answers. Paradise Sharks has been doing nothing but real estate for many decades. We kicked the middle man out of the real estate transaction, so we can keep our quality high and our prices the lowest in the industry. If we can ever answer any of your questions please feel free to reach out to us at firstname.lastname@example.org or 561.308.0175.
We won’t bite, but we will do our best to provide you a real estate experience that will put a big smile to your face and leave more of your money in your bank account.