No doubt that a significant decline in pending home sales is not a good thing. As of November 1st, the number of homes under contract in the Northern Palm Beaches is down a rather dramatic 16% over the past 30 days. But, not as dramatic as the 42% decline we have seen since May 1st. These are big drops to very low levels. Certainly, some of what we are seeing is seasonal in nature. Real estate sales in the Northern Palm Beaches always slow over the summer and fall months, but this year is different. The number of homes under contract in, and around, Jupiter just hit the very lowest numbers we have seen in over 6 years.
Compared to last year, the number of homes under contract in the Jupiter area is down by 17%. Down 16% from 2016 numbers. Comparing to the 2015 numbers, we are down a massive 31%. The drop from 2014 is 29%. And if you go back to Jupiter homes under contract on November 1st of 2013, we are down by a full 38%.
You get the picture, or you should. Jupiter home sales are looking a little bit sick at these levels. The number of homes currently under contract is not something to get very excited about and it probably isn’t over. Especially, if you are a real estate broker. To compound the fact that pending home sales are poor, the odds are very strong they are going to be heading even lower over the next couple months.
Interest rates remain significantly higher than we have come to expect, and have been hanging fairly close to 7 year highs, with little movement in about three weeks. The Fed says to expect more increases but hard to believe that mortgage rates can continue to rise for a whole host of reasons. If they do, watch out, but right now we are looking at maybe another 1/4 of a point to the upside. Anything much higher and it’s going to be really bad news for the Jupiter real estate market.
There is some good news and one metric we follow closely here at Paradise Sharks is the number of properties in the Northern Palm Beaches that sell in excess of $1M. This top end of the market is a good snapshot of what might happen in the future to the overall market. Until last year, the most homes to sell in this price range in one year was way back in 2005. In 2006, the number of million dollar plus sales fell by 24% and we all know what happened then. The shift can be swift but one you really have to pay attention to if you care about your homes’ value.
So, the good news is $1M+ sales have never been stronger. Through the end of October we have seen an increase of 16% over last years’ record pace. Very impressive for a record that stood for 12 years. Over the last 30 days, sales are up over 260% from last year’s total. October sales were 150% higher than any other October on record, ever. Sales of these ultra high end homes are fantastic and do not include all the multi-million dollar new construction you see on waterfront lot after waterfront lot throughout the community. Times are very, very good at the top end of the market.
Another bit of good news is inventory levels are now up for the 2nd straight month. In October, the number of homes for buyers to select from was up 9% and now sits at the highest levels we have seen since May. There is still a lot of poor quality inventory, and homes that are priced too high, but many sellers are starting to get the realities of the market shifting. Buyers need to be very educated on condition as nothing is more critical when determining a home’s true value. Make sure you are working with a broker who understands construction quality and the expense of upgrades as prices for remodels are going up and up.
Jupiter home sales change by the minute and it is critical if you are buying, or selling, that you are making educated decisions. That is one reason why it is imperative to interview at least 3 brokers before doing anything. Make sure you have picked one who is going to do their best to educate you. If you find one trying to sell you, you might think about running the other way.
Paradise Sharks loves to interview and earn your trust and the right to work with you on a successful real estate transaction. We can easily be reached at tom@paradisesharks,.com or 561.308.0175 and happy to help in any way we can.