If you're thinking of upgrading to a more expensive home in Palm Beach County, experts recommend that now might be the best time to do it. Palm Beach County has been reporting a subtle but growing shift in the upscale property market, away from a seller's scene and towards a buyer's bonanza. While record setting sales have recently occurred (like the recent whopping $105 million dollar sale of Terry Allen Kramer's Palm Beach estate) asking prices for more expensive homes have leveled off, due to a variety of factors, and this has given buyers the ability to be slightly more discriminating depending on the amount they are looking to spend. Conversely, entry level homes (in the $250k - $350k level) are still selling at near their highest asking prices since the 2008 crash, which hit their top asking prices in May of 2019, and have only edged downward slightly since. So why the gap in how the different price points are performing? According to the experts, there are a variety of factors.
More Demand for Middle Class Homes
A recent online article indicates there's significant demand for homes in the $250,000-$300,000 arena, which is keeping the asking prices for these homes at a steady rate. Professionals indicate that this is happening for multiple reasons. Lots of Demand, Low Supply. More people are looking for humble homes in the area, but there's a significant dearth of those homesteads to be had. Single family homes in this price range are taking only 30 days to sell, townhomes and condos only 36 days. These solid performance numbers are keeping steady due to a shortage of available properties in the more entry level range, so when one goes on the market, there are often several buyers ready to make a bid, which is good news for sellers in this range, but can be frustrating for buyers.
Homebuyers Have Changed
Many of the people looking for homes in the current Palm Beach market have different priorities. Millennials, for instance, seem to have learned some lessons for the 2008 crash and the previous generation's mistakes and are not as interested in having a large home or a hefty mortgage. While Palm Beach remains a desirable address for the much talked about age group, they want to ensure they can comfortably pay the piper and not end up house poor like many of their predecessors did.
More empty nesters and middle aged home owners are looking to downsize property these days than in the past, and this is increasing the demand for properties in the smaller price market. This demographic also seems to be increasingly looking at moving from larger estates to condos and townhomes for their ease of upkeep and maintenance, therefore the shortage of available properties in this category are going fast.
Mansions on the Decline
While all of this is good news for middle-class property homeowners, the same hasn't been true for the mansion market. Homes over $1 million are taking as long as 159 days to move, and the prospect for condos and townhomes in this price range are taking even longer; sometimes as much as 200 days from the first day on the market to sold. The reasons for this in part are reflected in the same reasons the entry-level range demand is increasing, but experts also point to some additional factors.
Slower Job Wage Growth
Palm Beach is currently reporting a 3.6% unemployment rate, the lowest on record. Typically an indicator that leads to an increased demand for more expensive homes, this hasn't been the case so far in Palm Beach County. One possible reason for this could be that while there's been powerful job growth, wages has been slightly sluggish, and haven't kept pace with the housing market.
Another potential aspect that could be affecting the slow movement in the luxury home market is the near complete disappearance of foreign buyers. According to the National Association of Realtors, foreign sales of area homes has dropped by half in just the past two years, a market that had once been a significant staple in the Palm Beach upscale home market. So while it's clear that the housing market in Palm Beach continues to show signs of steady strength, it's also clear that there are some interesting changes and trends occurring in what Palm Beach homebuyers are looking for. Time will tell if this is a permanent trend in the market.
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