In 2005 the median price was $488,250. In 2011 it was $305,000. Are we heading for a similar fate right now?
First, let’s make it clear the things that were driving the market in 2005 are totally different than what is driving the market right now. Prices may move higher as they did in 2005, but there is trouble ahead for many home owners.
Let's face it, and we keep talking about it, we are blessed to live in beautiful area that draws many wealthy people to our shores. They are running from bankrupt states and high taxes. It’s what has been driving prices higher at a record pace. The median price isn’t something they are concerned with. They want what they want and the taxes they are saving easily pay for the lifestyle they are buying into. If they lose a million bucks on a house, for many it isn’t the end of the world.
I walk a lot and yesterday I walked by a lot in Tequesta, a home on the main drag that recently sold for $875,000 is gone. It’s not a great lot. It certainly isn’t on the Loxahatchee River where people are spending millions on homes and tearing them down. The day before I was walking in Jupiter and a house that stood on a golf course lot that was on sale for $1.4 million the last time I walked by is no longer there. Somebody tore it down. Its back yard faces the direct western sun. Those with real money are not concerned with median prices.
The rest of the world is, and the reality is most of the residents of the Northern Palm Beaches couldn’t afford a home even in they could find one. Even though interest rates, while up this week, are sitting near the lowest we have ever seen or experienced. The median single-family home is priced beyond the means of a large percentage of those who live here.
The future depends on a lot of things, but with inventory at record lows and continuing to fall, and people continuing to relocate to Florida to escape taxes, right now signs point to a solid market. Right at this minute, sales of million-dollar homes were up 260% in October over last year’s numbers. Last year blew away all records for million-dollar sales. They blew away the old record by 10%. This year, in 7 of the 10 months, million-dollar sales blew away last year’s records. The three months they didn’t were directly related to when the Chinese Virus reared its ugly head. At this moment, pending million-dollar home sales are up 298% from year ago numbers.
Three days after the election was supposed to be over, it isn’t. It may be over today, but it certainly seems that the courts will be getting involved. The outcome and what it means for the economy will have a lot to do with where things go from here.
Middle America is in in trouble. Small business is in trouble. Look at the stores, the empty storefronts.The debt. The next multi-trillion dollar stimulus will be pushed through at some point. If you think the stock market will climb forever you would be wrong. If you think home prices will climb forever you would be wrong. But they certainly could climb higher before the next significant pullback happens. Jupiter home prices will change every day. They always have and always will.
Stay informed and watch the numbers if the value of your home is an important part of your financial future. Things can change quickly. Just like they did in 2006. Today even though million dollar pending home sales are up 298% from year ago numbers, they are actually down almost 10% over the past month. Things change so pay attention.
If you would like an analysis of your home's value and what you should be watching for, find a qualified real estate broker to educate you. Not someone to sell you, but someone to help you and to give you an honest evaluation. Paradise Sharks does an overall analysis of the Northern Palm Beaches each week in this column. If you would like an evaluation of your situation, we would be happy to help you and it won’t cost you a penny. Each house is different, each street is different, each neighborhood is different. During October pending home sales in Hobe Sound were down 13%. In Juno Beach they were upon 50%. There are clues you just have to read them.
If Paradise Sharks can ever be of help all you really have to do is ask. We don’t sell, we educate. Contact us at firstname.lastname@example.org or at 561.308.0175. We would be honored to earn your trust and your business. We promise the highest level of customer service and value that our competition can only dream about.