Sales Up Inventory Down

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Rise in Palm Beach County Home Sales Cuts Into Inventory

By Kimberly Miller

Palm Beach Post Staff Writer

Higher home sales and prices were a repeat theme in Palm Beach County last month, but a shrinking inventory has so discouraged some buyers they have given up searches for low- to medium-priced properties.

According to a report from the Realtors Association of the Palm Beaches, existing single-family home sales increased 22 percent in October from last year, and were up 12 percent from September. Prices also climbed with the median sales price jumping 23 percent from last year to $222,500.

But West Palm Beach Realtor Shannon Brink likened the choices of homes available to a department store clearance rack a week after a sale. Inventory has dropped 55 percent from last year to a 4.7 months’ supply in October.

“There is nothing left but the items no one wants,” said Brink, adding that he’s had four buyers looking in the $100,000 range recently end their pursuit for a home. “Or they’ve decided to try and save up more money for a higher down payment because there is virtually nothing left that’s available that doesn’t need repairs or exists in less desirable areas.”

Nationally, the 5.4 months’ supply of homes in October is the lowest inventory since February 2006. In Florida, there was a 5.2 months’ supply of homes last month. A 5.5 months’ supply represents a balanced market, the Florida Realtors report said.

The National Association of Realtors reported Monday that existing home sales were up 2.1 percent in October from September to a seasonally adjusted annual rate of 4.79 million homes. Sales were 11 percent higher than in 2011. The median sales price nationally was $178,600 in October, up 11 percent from a year earlier.

Florida’s single-family home sales were up 25 percent in October from last year and up 14 percent from September. The median sales price in October of $145,000 was 9 percent higher than in 2011 and the same as September.

Higher prices are helping build home equity, said Lawrence Yun, chief economist for the National Association of Realtors.

“Rising home prices have already resulted in a $768 billion growth in home equity during the past year,” Yun said. “Given that each percentage point of price appreciation translates into an additional $190 billion in home equity, we could see close to a $1 trillion gain next year.”

There are variables that could impede that kind of progress, said Anthony Sanders, a George Mason University real estate finance professor, who warned Monday of the looming so-called “fiscal cliff” of tax increases and budget cuts due in January.

He said Monday that the U.S. housing market is rebounding, “but the fiscal cliff and the largest tax increase in U.S. history will not be helpful to a housing recovery.”

One reason Palm Beach County home prices continued their climb last month was a 33 percent decrease in foreclosure sales, which typically sell at a discount compared to a traditional purchase. Short sales saw a 9 percent increase from last year, but even those are harder to come by, Brink said. In a short sale a lender accepts a lower price for a home than what the borrower owes on the mortgage.

“It seems that many of the distressed owners have either sold, lost the home, or obtained employment and now they are able to make payments,” Brink said. “In the big picture this is very good for the economy and housing market, but it’s not good for buyers who waited too long for deals that don’t exist anymore.”

Realtor Kathy Gross, of Nautica Realty in Boynton Beach, specializes in foreclosure sales. She said she sold 20 properties in October and has multiple offers on 80 percent of her inventory.

Gross’ listings are reserved the first two weeks they are on the market for buyers who plan to live in the homes. After that, investors have the opportunity to bid. Gross said appraisals are still coming in lower than what buyers are willing to pay, a factor that is helping control price run-ups.

“Appraisers stabilize it to a certain degree,” Gross said. “They rely heavily on recent closings rather than supply and demand.”

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I embrace the challenges of putting deals together in this ever-changing and fast moving business and I am open for business! I work in residential and commercial in both purchase and lease for both end users and investors.

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