Should Your Buy or Sell in Palm Beach County in 2020?

Should Your Buy or Sell in Palm Beach County in 2020? How will The Palm Beach County Real Estate Market Perform In 2020? | Read the 2020 Market Forecast from Owner/Broker Expert, Jeff Lichtenstein. Hint…It's Sunny!

2020 Real Estate Forecast for 2020 by Jeff Lichtenstein  (Broker and Owner of Echo Fine Properties)

First of all, I wish all of you a Happy and Healthy New Year in 2020! Whether you are renting, here for the season or a full time resident, we are so fortunate to live in the nicest spot in the United States. From the weather to the beach to activities to the restaurants, there isn’t a better spot.

2nd if your Selling…You will Like what I’m going to say. If you are Buying….move on things fast. Hindsight will be 2020 if not. (first 2020 pun!)

This time of the year I get a lot of, “What do you see for the real estate market in 2020? If you asked me last year, I had very bearish feelings on the market. Those unfortunately, were spot on. Note, the *long term growth, especially over the next 15 years with the amount of baby boomer retirements and weather/tax reasons to move to Florida will always keep the market strong. But supply patterns, the economy, interest rates, and so many factors can affect prices on a year to year basis. Last year I heard rumblings as early as October that we were going to be in for a tough season. Lots of those warning signs came out of California were Title companies and Mortgage companies were making severe cutbacks due to a slowdown. They correctly forecast a slowdown much of it due to higher taxes (The State And Local Tax deduction or SALT Tax) in “Blue states” and higher interest rates. People were also not moving as much and staying in their homes longer.

*Long term Projected Population Growth Palm Beach County per FDOT

2010: 1,320,134

2020: 1,473,000

2025: 1,559,600

2030: 1,636,400

2035: 1,703,700

2040: 1,760,000

2045: 1,809,800

To give you a base background so you understand it, our market is tough to predict in the fall because while we aren’t as seasonal as when I first started in 2000, 2/3 of the activity is in the Jan-June months. Think of the pattern that snowbirds come to town between October 15th and November 15th. However, they go back and forth for the holidays. Grand-kids visit over winter break and leave January 5th. The seasonal rentals start on January 1st. Their visitors also leave on January 5th. Once everyone does their Costco run and plays a round of golf or has a nice dinner, they call us to see homes around Jan 10th. Usually, the first month of season is more exploratory. Less about offers (A well-priced cherry location property will always go first), but then the faucet turns on and by mid-February it's bedlam with multiple offers taking place. This continues hot and heavy through March 31 (renters go home) and even for another 6 weeks as buyers who lost something or people who haven’t pulled the trigger, now do. Families usually start in March and want to finish up by July 1st so they can get in by the start of school in mid-August. July – September is our slowest time.

So, I look for 2 signs to gauge the strength of season. The first is do we have a preseason market in November-December. Many years it's non-existent. The second is foot traffic in January.

Now, let me go back to 2019.

1. Interest Rates were higher in fall of 2018.
2. Government shutdown throughout January 2019
3. Reality of SALT taxes in Blue states people really didn’t plan for effected overall market
4. Bad real estate market in northeast - Many of those sellers are our buyers
5. Stock market had its worst December drop in 2018 since Great Depression
6. Adjustment period to lower price
7. Tons of new construction startups. From Alton to Artistry to Avenier. There must have been 20 new projects in the Northern Palm Beaches that increased the supply.

Those 7 things combined killed the 2019 season. This year, most of those things are not at play. Interest rates are lower and taxes are not a surprise. Price reductions or staging issues needed to move homes both in the Northeast and here have had a year to adjust. We had a terrible 2019 season but an unusually strong selling summer and off-season occurred as prices lowered and many Buyers who passed the season, ended up Buying in the off-season. This has let our inventory become way down. Our under contracts for 2020 January and February closings (homes that went under contract before season) as well as foot traffic and inquiries are way up. On January 1, 2020, we were internally (through all our exclusive ways we collect leads) near 150 inquiries. Granted that we have some exclusive sources, $300,000 new website and are uniquely set up to handle inquiries with an in-house client concierge team, but that’s still a crazy amount of inquiries.

This is all the 'pre-boots on the ground' evidence before the numbers hit the public and appraisers. Good inventory is very difficult to find. The million dollar and country club market which was dead last season has rejuvenated. Lots of things can effect markets including unforeseeable economic events but I see 3-5% market appreciation depending on how the property shows, how its marketed, etc. The real estate forecast for 2020 is Sunny skies ahead!

Most Sincerely,

Jeff Lichtenstein

For a free and confidential evaluation of your home's value, please contact me at 561-346-8383 or [email protected]

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