Shopping for a Jupiter single family home just got more expensive

The median single family home price in the Northern Palm Beaches was up again in June to another record high. It’s the 7th straight month we have set a new record with not much hope for prices to retreat anytime soon.

There is some good news for buyers, as we had seen intra-month numbers hit as high as $722,000 but they have pulled back. As of July 1st, the median single family home price in the Jupiter area ended at $707,338, up slightly from the June 1st number of $705,000. It has been 4 months that prices have held somewhat steady; still trying to catch their breath from April when median prices jumped $57,000 from $645,000 to $702,000 in a single month.

What everyone wants to know is where do we go from here? In the lower end of the market, we are starting to hear about buyer's remorse. Young couples are looking at what they paid, what they got, and now as windstorm insurance policies and property taxes become a reality many are wondering just what they were thinking.

The reality is, and has been, since federal tax changes were enacted in 2017, the million-dollar home buyer has been in control of pricing. Those luxury buyers have been dragging prices across the board higher and if you wanted to play, even at entry level, you were going to pay more. A lot more.

Million-dollar home sales in the Northern Palm Beaches were up again in June. Up 220% when compared to last year's numbers. This year, the average monthly increase, when compared to 2020 numbers, is a gain of 263%. When you realize that 2020 sales above the million-dollar threshold blew all records out of the water by 150% you start to grasp how big the million-dollar market is becoming in the Jupiter area.

During June, homes that sold over a $1,000,000 accounted for 37% of the overall market. It was a new record, beating the 34% we saw in March. If there is any good news, it's pending home sales at the top end of the market have cooled considerably. As of this minute, they are down 35% from the record highs we set 10 weeks ago. Since then, they have been dropping steadily.

The million-dollar buyer has not gone away, they just are off to cooler climates. They are on summer vacation. If we have no cataclysmic economic news over the summer and early fall months, they will be back. As long as the million-dollar home buyer remains active, Jupiter single family home prices aren’t going to drop significantly.

Interest rates continue to be the wild card. Interest rates on a 30-year fixed mortgage are up 11% from the all-time lows we saw in February but still a historical bargain. We are in uncharted waters as almost everyone agrees that inflation is becoming a problem. The Fed says they might raise rates in a couple years but a significant move higher in interest rates could be that cataclysmic event. Every point increase in interest rates adds $285 billion dollars in interest on our ballooning national debt. With the federal government budget currently $3.5 trillion in the hole this year the last thing this country needs are higher interest payments on our debt that is fast approaching $29 trillion. The last thing home buyers need are higher interest payments and the role falling interest rates have played in rising Jupiter single family home prices is more than a little bit substantial.

I got my first real estate license almost 30 years ago and I have never seen anything close to what we are going though right now. Certainly, the bubble bursting in 2005/2006 was crazy, but it was a totally different kind of crazy. On top of that, in 2005, our national debt was under $8 trillion dollars. I don’t care if you are buying, or selling, there are no easy answers. But there is education and making informed decisions on the metrics surrounding a specific property, at a specific time, need to be fully explored.

Paradise Sharks has been writing weekly articles about the Northern Palm Beaches real estate market for longer than I care to remember. Years and years. Our motivation is helping others. Our clients, friends and neighbors. Saving them money. Saving them headaches. Our consultations are complimentary, and we are happy to answer any and all questions that you may have. We would love the opportunity to earn your trust and your business. If we can ever be o f?assistance in any way you will find us very easy to reach at 561.308.0175 or at?[email protected].

Fins up……?

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