A leading indicator, when it comes to overall market prices, is the strength of the $1M plus resale market and it is red hot. A couple months back, Paradise Sharks informed you that sales in this market segment jumped 10.7% in 2017 and took out the old record, set way back in, you guessed it, 2005. What is amazing is that through the 1st quarter of 2018 million dollar homes sales are up 14.5% above last years record pace. In January, we saw as many million dollar resale homes close in the Northern Palm Beaches as any January in the history book. February numbers were off about 5.5% from year ago numbers but in March the million dollar home buyers lit up the records books again eclipsing 2017 figures by a staggering 32%.
In the overall market, there is no doubt that limited inventory is putting upward pressure on prices but that not is not the case with the luxury market. Right now inventory levels above the million dollar list price mark sit at 13.5 months. Between $500,000 and $1,000,000 inventory sits at 6.7 months and under $500,000 inventory is down to 3.2 months.
Luxury homes buyers have the most selection and they are buying up homes like hotcakes at a church fundraising social. The overall market has sputtered a bit with pending home sales falling over the second half of March for the first time in many years. In the $1M plus market there are enough homes currently under contract that we fully expect records closings both in April and May. The market for million dollar plus homes remains red hot in the Jupiter area.
Paradise Sharks watches this market segment very closely as we usually see softening here before other price points. When luxury buyers are buying, they bring the entire market along for the ride. With median prices of single family homes in the area now at $500,000, more and more homes end up in the $1M+ range. A million dollars just doesn’t buy what it used to and that fact helps this record breaking sales activity. So do the large number of high end remodeling projects we are seeing throughout the area. Contractors are busy and times are good. We were on one of these remodeling job sites the other day and to a person nobody remembers being this busy during what is usually their slow season.
Don’t get complacent and always watch the numbers as the market can do an about face very quickly. The economy is good but there is a fine line between what might be considered a logical purchase and a possible warning of an overheated market.
At the top of that luxury market, we aren’t seeing any warnings right now. Just lots of buying, plenty of inventory and well healed buyers signing their names on purchase contracts.