Fueled by demand for luxury $1-million-and-up homes, total home sales in Palm Beach County climbed 8.4% year over year in July, while pending sales — a future indicator of closings — rose 20.3% in July compared to a year earlier, according to the latest report from the MIAMI Association of Realtors.
Pending sales, which began surging in mid-April, are now stronger than they were before the COVID-19 stay-at-home orders, MIAMI said.
“Palm Beach County real estate has completed a robust recovery from the global COVID-19 situation as total home sales, single-family home transactions and condo sales increased in July 2020,” said David Abernathy, Jupiter-Tequesta-Hobe Sound-MIAMI President, in a press release. “The increases highlight the robust fundamentals of the South Florida housing market going into the COVID-19 situation.”
Prior to the pandemic, the Palm Beach market was already experiencing strong demand from tax refugees coming from tax-burdened states. According to Abernathy, that trend has accelerated, as COVID-19 has given potential buyers from Northeastern states yet another reason to relocate.
Mortgage applications, another indicator of future sales, also point to the growing trend. The Mortgage Bankers Association reported on Aug. 19 that the purchase index was 27% higher than the same week in 2019.
Not surprisingly, Palm Beach luxury transactions fueled home sale increases in July. Luxury ($1-million-and-up) single-family home transactions were up 105.3% year-over-year, while luxury condo transactions increased 51.4% year-over-year.
Meanwhile, strong demand coupled with limited supply continue to fuel price appreciation in Palm Beach County.
Single-family home prices were up 12.5% year over year in July, increasing from $355,013 to $399,320, while existing condo prices increased 10.8% from $185,000 to $205,000.
But rising home prices are not deterring buyers. The median percent of the original list price received for single-family homes in Palm Beach County was 95.9% in July, up 0.9% from a year ago. The median percent of original list price received for existing condominiums in July was 94.3%, up 0.3% from last year.
Cash transactions in Palm Beach comprised 37.1% of July’s total closed sales, compared to the national figure of 16%, reflecting South Florida’s ability to attract a diverse number of international homebuyers, said MIAMI Realtors.
In a trend that has been seen across the country, housing inventory in Palm Beach County was down drastically in July, with months’ supply of single-family homes decreasing 24.4% to 3.4 months, indicating a sellers’ market.