Median condo prices in Jupiter, and the neighboring communities, are down as of July 15th. Down for the 4th straight month. Down to the lowest prices we have seen so far this year. The drops however have not been significant. On April 15th, the median priced condo sat at $252,000. Today it sits at $245,000. Not dramatic but still, median condo prices are down.
Interest rates keep dropping. Sales are up, but condo prices are trending lower. Why? After all, median single family home prices in the area have been performing much better. In fact, today median single family prices sit at record all time highs. Median condo price are still down 12.5% from the record highs last hit way back in 2006. Median single family home prices are 14% higher than 2006 prices.
There has been a huge disconnect in where Jupiter condo prices have been going when compared to their more expensive single family home cousins. Why? The answer is actually pretty straight forward. Taxes.
The local real estate market has been carried for the past few years by properties that sell for over a million dollars. The reason is taxes. Well heeled individuals have been moving to Florida in large numbers. They are running to a state with no income tax, from states with significant income taxes that kept rising. When the Trump administration pushed for a a tax cut, part of that reform was not allowing taxes over $10,000 from being deductible on your federal income taxes. It was now a double tax whammy to live in places like New York and New Jersey. To Florida they have been running. To save money and lots of it.
Wealthy people, relocating to Florida, generally are not buying condos. So far this year, 19.4% of single family homes sales in the Northern Palm Beaches have sold for over a million dollars. In the condo market, that percentage is 4.9%. The percentage of single family home sales over the million dollar threshold that have closed in the Jupiter area during the Trump years is up about 54%. Part of it is taxes, part of it is a strong economy. Demand for higher priced single family homes is surging and it is pulling median prices along for the ride. Condos have not enjoyed the same ride. It’s as simple as that.
There remains a real disconnect from what is happening with the overall economy and the strength we are seeing, not only in the real estate market, but the stock market. There is most likely another stimulus bill coming out of Washington very soon. The Democrats version that the House passed weeks ago, contained a trillion dollar bail out of states and local governments who are in deep financial trouble. So far, the Republicans have said no way, but time will tell.
The election coming our way is going to be critical to Florida real estate. If Joe Biden is elected, he has made it clear he will end most of the tax cuts enacted by President Trump. If he opts to once again allow state taxes to be deducted from federal returns it could cause a flow of well heeled residents headed out of the state. It could put a big damper on Florida real estate. Especially at the top end.
There is so much going on right now. The virus, the economy, the election. It’s enough to make your head spin. For now. the real estate market is booming. Come November, it may be a different story, so pay attention. If you have any concerns, any questions and Paradise Sharks can be of help in any way just let us know. You can call us at 561.308.0175. You can email us at firstname.lastname@example.org. We promise you straight answers, world class customer service, and our decades of experience will help you make informed decisions. The fact we have kicked the middleman out of the real estate transaction means we will save you money. Lot's of money. It's just what we do.
Stay safe and keep those fins up……