One of the most important factors driving this market is inventory, or should we say lack of inventory. The number of homes on the market for buyer’s to select from dropped another 3% over the past month. Right now inventory levels are 10.5% below year ago levels and sit at all time record lows. Let that sink in. Since Jupiter was “discovered” home buyers have never had fewer choices when looking for a home to buy. It truly is a big old goofy world.
Interest rates, while up slightly last week, had fallen steadily for 7 straight weeks to all time record lows. The reality is they could go even lower. Just look across the ocean to Denmark, whose national debt situation isn’t even close to the disaster we have, theirs is only about 34% of GDP. Finland based Nordea is offering a 20 year mortgage that charges no interest. While that sounds like a beautiful thing, the reality is interest rates are so low because the economy and the national debt situation is not something anyone should be comfortable with. If we get to a point where you can literally borrow money for free it should be good for Jupiter home prices. But things could change dramatically in a hurry. Yes sir, it is indeed a big old goofy world.
People are flooding out of the big cities because of this virus. Residential real estate in places like Manhattan and San Francisco are in big trouble. In Manhattan, residential sales dropped 54% during the second quarter with prices down almost 18%. And if you think residential real estate is in trouble, it’s hard to fathom what the shakedown in commercial real estate will ultimately be. For now, for multiple reasons, many buyers are flocking to Florida. Million dollar homes sales during July in the Jupiter area were up 147% compared to last year. Pending home sales at the top end of the market are 71% above last years record numbers. Record breaking million dollar home sales mean median Jupiter home prices should be moving higher. Yes sir, it’s a big old goofy world and it’s getting goofier by the minute.
Distressed sales on the market through the real estate community in the Jupiter area are almost non-existent. Try to find a short sale or bank owned property listed in the MLS. Of the 450 condominiums on the market this morning in the Northern Palm Beaches, only 1 is a distressed sale. That my friends is going to change as there are still almost 27 million unemployed people in America, this pandemic is strangling the life out of many small businesses and their employees and a high percentage of renters in America just aren’t paying rent. The government has not allowed people to be foreclosed upon, or evicted, but that cannot go on forever. Goofy, indeed, and no clear path from here.
Pending home sales had just enjoyed two of their biggest months ever but over the past thirty days fell 12%. Inventory certainly played a role and for now the number of homes under contract in the Jupiter area is still 17.5% ahead of year ago levels. The stock market is booming, the real estate market is booming, and American’s soon will get to choose which path this country heads down and man are they different. Stay turned as this big old goofy world is certainly going to get even goofier in the days, weeks, and months ahead.
Paradise Sharks remains committed to ensuring our clients make informed decisions, whether they are buying, or selling. Our “no middleman” culture means world class customer service at prices much of the competition can only dream about. We believe local, small businesses, are the backbone of America and simply can do things better than the big box brokerages. If we can ever be of help, please feel free to contact us at email@example.com or 561.308.0175.