2013 Palm Beach County Real Estate Year in Review

The numbers are in and the year 2013 ended with the real estate market on fire.

  • Closed sales from December 2012 through December 2013 in PBC are up 11.9%; 1,325 in 2013 and 1,184 in 2012

Single-Family Homes, December 2013 versus December 2012

  • The median price of a single-family home went up 15.3%, from $229,750 to $265,000
  • Inventory is practically the same at 6,720 in 2013 from 6,764 in 2012

Condos/Townhomes December 2013 versus December 2012

  • Interesting that the condo market is much different
  • Closed sales are down 17.9%. Prices are up a staggering 22.3%. This reflects in the supply of active inventory, as active listings are down 13.7%.

Million dollar sales in 2013 versus 2012

  • The million dollar market has recovered nicely. The amount of closed transactions were up 26.8%; 835 in 2013, 658 in 2012.

So, why such an increase in prices? Here are 8 reasons why:

  1. Inflation! Yes, inflation is historically lower, but there has been a cumulative 17.8% inflation since 2006, when the market crashed, according to the Bureau of Labor Statistics. So, prices should have come back 17.8% if nothing else. I never hear anyone talk about this, but I believe it’s the single biggest reason prices have come up and why there might be more room to go higher.

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Ave

2006

4.0

3.6

3.4

3.5

4.2

4.3

4.1

3.8

2.1

1.3

2.0

2.5

3.2

2007

2.1

2.4

2.8

2.6

2.7

2.7

2.4

2.0

2.8

3.5

4.3

4.1

2.8

2008

4.3

4.0

4.0

3.9

4.2

5.0

5.6

5.4

4.9

3.7

1.1

0.1

3.8

2009

0.0

0.2

-0.4

-0.7

-1.3

-1.4

-2.1

-1.5

-1.3

-0.2

1.8

2.7

-0.4

2010

2.6

2.1

2.3

2.2

2.0

1.1

1.2

1.1

1.1

1.2

1.1

1.5

1.6

2011

1.6

2.1

2.7

3.2

3.6

3.6

3.6

3.8

3.9

3.5

3.4

3.0

3.2

2012

2.9

2.9

2.7

2.3

1.7

1.7

1.4

1.7

2.0

2.2

1.8

1.7

2.1

2013

1.6

2.0

1.5

1.1

1.4

1.8

2.0

1.5

1.2

1.0

1.2

1.5

1.5

2014

 

 

  1. 2.   Historic Lows in New Construction/Increased Population Growth

Very little New Construction has curbed the supply side, while we’ve had excellent growth. This is going to continue, and with very little building in the short term, prices may continue to rise. According to Palm Beach County Planning, there will be almost a 9% increase in population in Palm Beach County over the next 9 years.

CITIES

POPULATION (Permanent Residence)

ts)

Additional Seasonal Population*

Land Area#
(in sq. miles)

1980 Census

1990 Census

2000 Census 2010 Census

2013***

2020 Proj**

BOCA RATON

49,447

61,492

74,764

84,392

86,041

91,679

10,940

29.04

JUNO BEACH

1,142

2,121

3,262

3,176

3,191

3,619

1,352

2.07

JUPITER

9,868

24,986

39,328

55,156

56,577

60,465

9,240

22.11

JUPITER INLET COLONY

378

405

368

400

401

416

79

0.14

NORTH PALM BEACH

11,344

11,343

12,064

12,015

12,184

12,592

1,997

3.70

PALM BEACH

9,729

9,814

9,676

8,348

8,168

8,620

6,310

3.70

PALM BEACH GARDENS

14,407

22,965

35,058

48,452

49,434

55,276

5,751

56.25

RIVIERA BEACH

26,489

27,639

29,884

32,488

33,369

36,297

5,389

8.45

TEQUESTA

3,685

4,499

5,273

5,629

5,649

6,196

928

1.80

WELLINGTON

20,670

38,216

56,508

58,108

61,711

4,327

45.25

WEST PALM BEACH

63,305

67,643

82,103

99,919

103,038

113,131

6,228

55.48

TOTAL COUNTY

576,758

863,365

1,131,191

1,320,134

1,345,652

1,465,300

143,837

1,976.56

3.   Healthier Economy.

Florida’s job rate dipped to 6.4%, this December. Yes, we have a long way to go and the recovery has been anemic at best, but the panic of 2009 is in the rear view mirror.

4.   Investors

Hedge Funds and investors like Warren Buffet have bought much of the inventory on the lower end of the market. These investors are running it like a profitable business and this got rid of much of the excess supply.

5.   FHA Lending

FHA lending, which requires less of a percentage down, opened up more opportunities.

6.   Short-Sales Are Winding Down

Without these “must sellers”, the low prices are no longer available.

7.   Short-Sellers from the Past Are Now Purchasing

People who short-sold early on are now getting their credit back and are reentering the market as purchasers.

8.   Pent Up Demand

Many people wanted to move but couldn’t for financial reasons or couldn’t sell their home. The market not frozen allows them to sell and then they can make a purchase. Also, homes have aged and people want something new, or they became empty nesters, etc.

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