Consider that pending home sales increased over the past 30 days. Last year, in August, pending home sales in the Jupiter area were down 12%. They were down in 2016, 2015, 2014 and 2013. August is typically not a great month for Jupiter real estate but this year there are a lot of smiles around the various real estate brokerages in town. History tells us that pending home sales will decline in September but history did not make much of a difference in August.
The big question is will those smiles continue and most signs point to a market that will probably not bring a lot of smiles even though the economy is stronger than we have seen for many years. Jupiter real estate is driven by many factors and each will have a big impact on where we go from here.
At the top end of the market, homes that sell in excess of $1 million the market has never been better. Sales of this luxury Jupiter real estate were up again in August and for the year are 6% higher than last year’s record numbers. Those with money are spending it and they have more choices than anyone. An amazing 36% of all active listings in the Northern Palm Beaches have asking prices above the million dollar mark. So far this year, 14% of all sales have been above this threshold. Paradise Sharks watches this metric very closely as if we see a significant slowdown in the luxury home category the implications on the overall market are significant.
At the other end of the market things are quite different. In the under $400,000 category there is a true shortage of quality homes for buyers to select from. Consider that, so far in 2018, 36% of all sales in the Jupiter area have been below this threshold while today only 15% of active listings are priced under that number. Most homes that sit on the market in this category have condition issues, the property is in poor condition, or priced above market value. Well priced homes in good condition sell quickly in this market segment with a third of all homes priced under $400,000 under contract within 10 days.
Inventory remains a real problem outside the luxury end of the market. Overall inventory dropped again during August and that was the 6th straight monthly decline. The total number of homes available for buyers to consider is within a whisker of the worst levels we have seen in years. Understanding that there is an excess of options at the top end of the market and much of the lower priced inventory has issues, you see it is not just the overall market numbers that you need to consider.
New home opportunities in the Jupiter area only add to the fact there are plenty of options at the top end of the market. Heading north into Martin County gives one more options but here in Palm Beach County new home prices are pretty lofty. We are seeing developers offering commissions as high as 6% to entice the real estate community into pushing their product. At Paradise Sharks we pass along any additional commissions to our clients as a credit at closing. We feel strongly this is just part of the fiduciary duty we owe to our clients.
Interest rates have been essentially flat since February and even though the Fed keeps raising their lending rates the mortgage market has pretty much ignored them since the run up we has back in December and January. One thing is certain, if rates move significantly higher there will be fewer smiles in the local real estate offices.
So many moving parts of a real estate market that is very localized. What is true for your house will probably be totally different that one a few blocks away. Making educated decisions is critical and the way to accomplish that is by interviewing brokers prior to doing anything. Find one you trust and whose focus is your goals and not theirs. Paradise Sharks loves to interview and you can set yours up today at email@example.com or 561.308.0175.