The Palm Beach County real estate market currently leans towards a seller's market. The months' supply of inventory for both single-family homes and existing condominiums falls below the balanced market range, signaling favorable conditions for sellers. With 55.7% of sales in cash, buyers are navigating a market where cash transactions play a significant role.
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Palm Bay Housing Market Trends in 2024
How is the Housing Market Doing Currently?
Palm Beach County is experiencing a noteworthy surge in single-family home sales, as revealed by the January 2024 statistics released by the MIAMI Association of Realtors and the Multiple Listing Service (MLS) system. The data indicates a promising trend, with a 2.1% year-over-year increase in single-family home sales in January 2024.
This surge is attributed to the allure of Palm Beach County, attracting both homebuyers and businesses, especially from high-density and high-taxed regions such as New York and California. Remarkably, over half of all home purchases in Palm Beach County are made in cash, a rate that doubles the national average, according to JTHS-MIAMI President Courtney Smitheman.
How Competitive is the Palm Beach Housing Market?
The Palm Beach real estate market remains competitive, with existing condo sales seeing an 8.8% year-over-year decrease due to inventory challenges and elevated mortgage rates. However, the total number of new listings increased significantly by 17.20% in January 2024, providing buyers with more options in this seller's market.
Despite the competitive nature, cash continues to play a pivotal role in transactions, representing 55.7% of closed sales in January 2024. This high percentage reflects Palm Beach County's status as a premier real estate market, attracting not only domestic buyers but also foreign investors.
Are There Enough Homes for Sale in Palm Beach to Meet Buyer Demand?
While new listings have increased, Palm Beach County is grappling with a 34% reduction in total inventory compared to the historical average. The scarcity of available homes is reflected in the active listings, which increased by 32.9% year-over-year, indicating a challenging environment for buyers.
The inventory situation varies between single-family homes and condominiums. Single-family home inventory increased by 16.6% year-over-year, while condominium inventory experienced a substantial 50.7% year-over-year increase. The months' supply of inventory for single-family homes is 4.2 months, maintaining a seller's market, and for existing condominiums, it stands at 5.8 months, also signaling a seller's market.
What is the Future Market Outlook for Palm Beach?
Despite challenges in inventory, Palm Beach County's real estate market continues to see rising home price appreciation. In January 2024, the median prices for single-family homes increased by 5.6% year-over-year, reaching $615,000, while existing condo median prices saw an 8.7% year-over-year increase, reaching $325,000.
The median percent of original list price received for both single-family homes and existing condominiums was above 94%, indicating a strong market where sellers are realizing close to their asking prices.
Palm Bay Housing Market Forecast for 2024 and 2025
The Palm Bay housing market, a dynamic sector with its pulse on trends and fluctuations, is currently experiencing noteworthy shifts. According to Zillow, a trusted source in real estate data, the average home value in Palm Bay stands at $308,120, reflecting a 0.9% increase over the past year. Homes in this area typically go pending within a brisk 37 days, indicating a market with a high demand and swift transactions.
Key Housing Metrics Explained:
- For Sale Inventory (January 31, 2024): The Palm Bay housing market boasts an 886 for sale inventory, providing a glimpse into the variety of options available for potential homebuyers.
- New Listings (January 31, 2024): With 211 new listings, the market demonstrates a continuous influx of properties, contributing to its vibrant real estate landscape.
- Median Sale to List Ratio (December 31, 2023): The 0.986 ratio indicates a healthy balance between listing prices and actual sale prices, fostering a fair and competitive market.
- Median Sale Price (December 31, 2023): At $305,917, the median sale price provides a benchmark for the overall value of homes in Palm Bay.
- Median List Price (January 31, 2024): With a median list price of $330,783, sellers can gauge the market expectations, ensuring competitive yet realistic pricing.
- Percent of Sales Over/Under List Price (December 31, 2023): Notably, 20.6% of sales surpass the list price, while 59.8% remain under it, depicting the varied negotiation dynamics within the market.
Palm Bay MSA Housing Market Forecast:
Looking ahead, the Palm Bay Metropolitan Statistical Area (MSA) forecast reveals intriguing insights. According to the data, as of January 31, 2024, the forecasted growth stands at 0.1%, projecting a promising trajectory. This growth is anticipated to further accelerate, reaching 0.8% by April 30, 2024, and a significant 5.4% by January 31, 2025.
MSA Definition: The Metropolitan Statistical Area (MSA) encompasses Palm Bay and its surrounding counties, serving as a geographical unit for comprehensive market analysis. In this context, Palm Bay, FL, is the central hub within the state of Florida.
Counties Encompassed: The Palm Bay MSA spans multiple counties, fostering a diverse and expansive housing market. The exact counties involved contribute to the richness and complexity of the real estate landscape in this metropolitan area.
Market Size: The housing market in Palm Bay, within its MSA, is substantial in scale, attracting attention for its growth potential and investment opportunities. The forecasted uptrend aligns with the region's economic vitality, making it a key player in Florida's real estate scene.
Are Home Prices Dropping in Palm Bay?
Contrary to a drop in home prices, the Palm Bay housing market showcases a resilient trend with an overall 0.9% increase in average home value over the past year. This signifies a stable and appreciating market, making it an encouraging environment for homeowners and potential sellers.
Assessing the current dynamics in the Palm Bay housing market, it leans towards being a seller's market. The relatively low inventory, coupled with a high demand reflected in swift sales and a median list price of $330,783, empowers sellers with advantageous conditions. Buyers may face increased competition, necessitating strategic approaches to secure desired properties.
Will the Palm Bay Housing Market Crash?
The data does not indicate any imminent housing market crash in Palm Bay. The steady rise in home values, coupled with the forecasted growth, suggests a resilient and well-balanced market. However, it's crucial to monitor economic indicators and external factors that could impact the real estate landscape over time.
Is Now a Good Time to Buy a House in Palm Bay?
Considering the current seller's market conditions, prospective buyers should approach with careful consideration. While the market presents challenges such as increased competition and a median list price of $330,783, individual circumstances play a crucial role. Consulting with real estate professionals and staying informed about market trends can guide buyers in making well-informed decisions based on their specific needs and goals.
Investing in Palm Beach Real Estate Market
1. Population Growth and Trends
Investors eyeing the Palm Beach real estate market can find promise in the city's population growth and trends. The region has experienced sustained population growth, driven in part by in-migration from states like New York, California, and New Jersey. This influx of residents contributes to a robust and expanding housing market, offering a potentially lucrative landscape for real estate investors.
2. Economy and Job Opportunities
The city's economy and job market are critical factors for real estate investors. Palm Beach County boasts a diverse and flourishing economy, with a particular emphasis on a robust luxury market. Additionally, the presence of jobs in various sectors, including real estate, healthcare, and tourism, provides a stable foundation for the real estate market. The economic vitality of the region enhances the potential for property appreciation and sustained rental demand, making it an attractive prospect for investors.
3. Livability and Quality of Life
Livability is a key consideration for real estate investors. Palm Beach offers a high quality of life, featuring beautiful beaches, cultural attractions, and a pleasant climate. The city's desirability as a place to live can positively impact property values and rental demand. As investors evaluate potential markets, the overall livability and attractiveness of Palm Beach contribute to its investment appeal.
4. Rental Property Market Size and Growth
The size and growth of the rental property market are crucial for investors seeking long-term returns. Palm Beach County's surging interest in mid-market homes, coupled with sustained population growth, contributes to a growing rental market. Investors can tap into this demand by providing rental properties catering to diverse segments of the population. The city's popularity among both permanent residents and seasonal visitors further enhances the potential for a thriving rental market.
5. Other Factors Related to Real Estate Investing
- Mortgage Rates: While mortgage rates have risen, understanding the current rates and their potential impact on buyer behavior is essential for investors. The bifurcated growth in the housing market, as highlighted by MIAMI REALTORS® Chief Economist Gay Cororaton, emphasizes the importance of recognizing these trends for strategic investment decisions.
- Inventory Dynamics: Palm Beach's inventory challenges, with a significant decrease from pre-pandemic levels, create a seller's market. Investors should consider the supply-demand dynamics when assessing investment opportunities.
- Market Appreciation: The historical appreciation in median home prices and the city's attractiveness for wealth migration contribute to the potential for real estate market appreciation, providing a favorable environment for investors seeking capital appreciation.
- Economic Impact: The real estate market's contribution to the local economy, as reflected in the economic impact of home sales, adds another layer of consideration for investors evaluating Palm Beach. A thriving real estate market can have a positive cascading effect on various industries, further supporting investment prospects.
Considering Palm Beach's population growth, economic vibrancy, livability, rental market dynamics, and various other factors, the city presents a compelling case for real estate investors. The sustained demand for properties, coupled with the region's overall desirability, positions Palm Beach as an attractive destination for both short-term gains and long-term investment success.
References:
- https://www.zillow.com/palmbay-fl/home-values
- https://www.realtor.com/realestateandhomes-search/Palm-Bay_FL/overview
- https://www.miamirealtors.com/