Is the Jupiter real estate market starting to cool?
Two articles in big name national publications over the weekend had me wondering if the Jupiter real estate market is ready to start cooling down. The first was in the New York Post and titled “Wall Street elites who fled to Florida amid COVID-19 want to return to NYC”. The article claims those who fled to Florida are starting to have regrets and the problem with moving to Florida is you have to live in Florida. They claim the resurgence in New York will be like the Roaring Twenties as the elites start selling in Florida and buying in New York.
Th second article was in the Wall Street Journal and it was titled “Homebuyers Are Heading to Florida During Covid, but Nearly as Many Are Moving Out”. This article claims heat, hurricanes and home prices have as many people escaping Florida as moving into the state. It claims there were fewer moves into Florida from other states in 2020 than any time in the last nine years.
In today’s reality, it's hard to believe anything you read. However, as someone who watches the real estate metrics in the Northern Palm Beaches far more closely than any other real estate professional that I am aware of, I would be lying if I didn’t think there was a real chance of a significant pull back from the euphoria we have seen over the past year.
For example, if someone purchased the median priced single-family home in the Northern Palm Beaches one month ago, and financed 80% at the average overnight rate for a 30-year conforming mortgage, their monthly principal and interest payment would have been about a little over $2,000. If someone bought the median priced home today and financed a similar mortgage at today’s average overnight rate their monthly payment would be over 20% higher. It doesn’t take a brain surgeon to understand trends like that cannot continue.
There is literally almost nothing for today's buyers to select from. Inventory, as of March 15th, is down for 10 straight months to another record low that is so far below anything we have ever seen it’s literally insane. Down another 21.3% over the past month. Down an astounding 67.2% year over year. It doesn’t take a brain surgeon to understand trends like that cannot continue.
But somehow demand from buyers is insatiable, especially at the top end of the market. Pending home sales are at the highest levels we have seen in 8 years. In the million dollar plus market, they are so far above any past records it's crazy. Last year there were over 50% more-million-dollar sales than ever before. This year we are leaving those numbers in the dust.
Over the first two months of 2021, last year's epic record sales have been exceeded by 205%. Halfway through March, we are already far ahead of last year's total for the entire month. Pending home sales at the top end of the market are at record highs and currently stand 221% above last year's all-time record. It doesn’t take a brain surgeon to understand trends like that cannot continue.
With severely limited supply, and very strong demand, prices are moving higher, very quickly. Median condo prices in the Jupiter area have been up for 8 straight months and today sit at an all-time record price of $305,000. Thats 22% higher than year ago numbers.
In the single-family market, median prices have gone bonkers. On March 1st, they sat at $640,000. Today, barely two weeks later, they have jumped 9.4% and that median price has hit $700,000. That is a 28% gain over last year on this date. It doesn’t take a brain surgeon to understand trends like that cannot continue.
Every market moves to it's own metrics. The Miami market can sputter before the Jupiter market. The Palm Beach market can sputter before the Jupiter market. The reality is, the crazy gains we have seen over the past year cannot continue. This market will cool, we just don’t know when or by how much.
If you are a buyer, be very careful, especially if you are pushing your finances to buy at today's lofty figures. If you are a seller, interview brokers and ask a lot of questions. Based on the current market strength, Paradise Sharks has unveiled our new Virtual Home Selling program. We offer listing periods as short as 14 days. You don’t even need to allow showings and your total commission can be as low as 1.5%. It is a program designed for a red-hot market so once the big chill kicks into gear it simply won’t work.
As always, don’t get sold, do get educated, and if Paradise Sharks can ever be of help in any way, please free to contact us at 561.308.0175. We would be honored to be of service. After all, it's our passion.
Fins up…….
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