I am a big fan of Warren Buffet. Lately, he has been getting a lot of negative press that he has lost his touch. Warren’s Berkshire Hathaway has always been the world’s best mutual fund. At least in my lifetime it has been. One share of his stock, at the high, sold for almost $350,000. You know what Warren’s mantra has been through the years? Buy when everybody is selling and sell when everyone is buying.
Should you be selling? Not if you are happy and do not care what the value of your home is. But even then you want to know what is going on. It’s actually crazy. Cloud 9 crazy.
Let’s start with those million dollar home sales. In June, closings of homes that sold for over a million dollars in the Northern Palm Beaches set a new all time record for the month. They blew away the old record by 22%. In July, they are currently ahead of the old record by 27%. Those numbers are tame when compared to million dollar homes that are under contract but have not yet sold. Today, those pending million dollar sales numbers are 110% ahead of last years all time record on this date. Cloud 25 crazy. Euphoric. Indeed.
In the overall Northern Palm Beaches things aren’t Cloud 25 crazy but they are Cloud 9 crazy. Pending home sales for all prices ranges, as of July 15th, are up 3.6% over the past two weeks. Over the past month they are up 13%. Compared to last years numbers they are up 24%. The number of homes under contract today are higher than they have been at anytime in well over 3 years. And they are climbing. Everybody is buying. Cloud 9 crazy. Should you be selling?
What makes the fact that sales are soaring to euphoric levels even more amazing is inventory. The homes that buyers have to select from. Pure and simple, the choices for today’s buyer suck. Really bad. As of today, inventory has dropped 4.6% over the past two weeks. It has dropped 11.1% over the past 30 days. Existing home inventory is down and astounding 16.1% over year ago levels. This morning there are fewer homes on the market since Paradise Sharks has kept records and that is a long, long, long time. George W. Bush was President.
Inventory sucks, sales are soaring, especially million dollar sales. Interest rates are at historic lows. Three weeks ago, interest rates knocked out an all time record low from way back in 2006. Over the past 3 weeks they have dropped another 6.3%. Interest rates at record lows, sales at record highs, inventory at record lows. Median home prices should be soaring, but they aren’t. Might they in the days ahead? Perhaps, and that is a subject we will look closely at in next week's Paradise Sharks market update, so stay tuned to this channel.
Paradise Sharks is spending time on the road this summer looking for a potential second office location. Away from those crazy Florida summer temperatures and humidity. I am writing this article in the North Carolina mountains and the temperature is 66 degrees. We are seeing a lot of downtowns, we are eating at a lot of restaurants, we are talking to a lot of people, we are walking a lot of streets. The economy is in real trouble. Not the real estate economy. Now the stock market economy. The real life economy. Small businesses all over the place are on life support, as are many of their employees. Everybody is waiting to see the next “stimulus” package from Uncle Sam and who is going to get the trillions of dollars our country does not have. Our national debt is about to hit $27 trillion with unfunded liabilities over $153 trillion. The Fed is injecting $12 trillion dollars to keep the economy from collapsing. The Chinese virus is raging, There is hatred everywhere you look. The world has gone bananas. But Jupiter real estate is on Cloud 9. Everybody is buying. What would Warren Buffet do?
I am not telling you the “high” in real estate is in. But, I am going to tell you, that if you are even thinking about selling your home, now might be an excellent time to get informed and make an educated decision. The timing may end up being perfect, or close to it. Sales are booming, Inventory is at record lows, Prices may have a final push, but maybe not.
Always interview different brokers before doing anything real estate. Sure, Paradise Sharks is selling homes at record prices, sure we are selling homes fast with few headaches to our clients. Sure, there are few homes we cannot list for a maximum commission of 4% and many we can list for no more than 3.5%. Sure, we have kicked the middleman out of the real estate transaction and pass those savings back to our clients where they belong. Sure, Paradise Sharks would love to team with you, but still sit down with others and ask questions. Lots of them. If you would like to ask us questions, we would LOVE to answer them. Ask away at 561.308.0175 or firstname.lastname@example.org.
You know what the Rolling Stones say, “Hey, you, get off of my cloud”. You know what Warren Buffett says, “Sell when everyone is buying”. Real estate is in a state of euphoria. Will it stay there?