Median condo prices were up as well, for the 3rd straight month. Hitting $255,000 they are now tied for the highest modern day prices we have seen. The problem for condo owners is we first hit that record price back in September of last year. While condo sales are strong and prices are rising there has been no overall change in pricing in over a year. Today’s median condo prices are unbelievably still 9% below he “bubble highs” set over 15 years ago. If you purchased a median price condo at the height of the market in 2005 it’s still not worth what you paid for it. Even with sales that are solid as a rock. Even in the strongest real estate market that the Northern Palm Beaches has ever seen.
If you purchased a median single family home at the “bubble highs” it’s value has increased by about 23%. Those old 2005 records were eclipsed over 2 years ago in the single family market. In the 13 months that median condo prices have not moved, the median single family home price in the Jupiter area is up over 21%.
Why such the disparity?
It’s actually fairly straight forward and the answer is the top end of the market. Homes that sell over the million dollar mark. That market segment has carried the overall market on its back since the Trump tax cuts of 2017. For wealthy northerners, who could no longer write off over $10,000 in taxes, a move to Florida, where residents pay no state income tax was truly a no brainer. This year’s Chinese virus made the decision to relocate to Florida even easier as urban streets in cash strapped Northern cities where filled with looters, destruction and anarchy.
People with money could not get to Florida fast enough and the cost of the home was the least of their worries. Those running to Florida because of tax laws aren’t worried about median prices. They are worried about comfort and will buy what they want and they want homes that sell for over a million dollars.
You see, right now in the Jupiter area, the percentage of condos that sell for over a million dollars sits right about 4.6%. In the single family market 23% of all sales are now above that lofty threshold. Million dollar home sales are driving this market and it's a party that the vast majority of condos are not invited to.
If the million dollar party continues, condo prices will benefit as inventory is in dramatic trouble. If someone wants to buy a property there is a large percentage that cannot afford the median price single family home that just hit $600,000 in the Northern Palm Beaches. With median condo prices at far less than 1/2 of that number many buyers will settle.
Keep a very close eye on the economy and the election that is now just 12 days away. A Biden victory could end the million dollar home party in Florida so stay tuned.
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