Talk about a benchmark. I am giving away my age, but as a recent college graduate, with interest rates around 18%, I purchased my first home. It needed some work but had great square footage, and a wonderful lot, in a great neighborhood. It was in Iowa, but still the purchase price was $42,000. Back then a half a million dollars was real money and if you had a home worth that much you were living in a mansion. You had the world by the tail.
Fast forward to today, and the median single family price in the Northern Palm Beaches is there. $500,000, with half of all sales below that number and half above. The “median” house in our area looks something like this is today’s world. It has a little over 2,000 square feet, three bedrooms, 2 bathrooms, was built in the early 1990’s and has a two car garage. Location, quality of construction and a whole host of other factors work into the price equation but that’s basically what you can expect for a half a million bucks.
The median single family home price in the area sits right at $500,000 and is up for six straight months. Compared to last year, prices are up 9.9%. Substantial gains both long term and short term. The cost of buying a home in paradise is moving higher and at another all time record high. How important is location? Plenty. In Jupiter, the median single family home price sits at $525,000. It’s the same in Tequesta while in Palm Beach Gardens the median sales price sits at $480,000. Each city, each neighborhood, each home plays by a different set of rules. If you are doing anything real estate it’s critical you understand that.
Interest rates are trending higher but there have not been any huge weekly moves. The average overnight rate on a 30 year fixed conforming loan sits at 4.46%. Still historically low, but a full 110 basis points above the 3.36% you could get a mortgage for back in the good old days. I still don’t see any huge jumps but no doubt we could see rates hit 5% by the end of the year. We have this spending problem in Washington and each 1% increase in rates costs the taxpayers an additional $210 billion dollars on a budget that hasn’t been balanced since who knows when.
Condo prices also are on the rise and closing in on the $250,000 mark here in the Northern Palm Beaches. There are serious supply issues and in most areas finding a home in great condition is a very difficult task. You go out and look at 5 homes and if you are lucky, one of them might be in what you consider great condition. It’s usually priced a bit above the market and buyers are reaching and that is causing prices to rise. Locally new construction is even more expensive, with builders forced to look for savings in order to get prices down. Please make sure that even when buying a new home you have it professionally inspected before in closes. If you are working with Paradise Sharks as your broker, on any new construction sale, just ask me and I will pay for the inspection. It’s that important.
Sales are slowing as we head into the historically quieter summer months. If you are even thinking about buying, or selling, in this market, please seek knowledge and make educated decisions. Interview at least 3 brokers and ask a lot of questions. There are great opportunities for those properly positioned and prepared to act. Paradise Sharks loves to be interviewed so please feel free to contact us anytime at firstname.lastname@example.org or 561.308.0175.