Palm Beach County Housing Market: A Stalemate Between Buyers, Sellers
Who’s going to blink first?
That’s the question in the once-sizzling Palm Beach County housing market - which for nearly five years lured investors with double-digit gains, easy credit and low Florida mortgage rates - has simmered to a showdown.Some market watchers believe home prices are the object of a high-stakes tug of war between home buyers in Palm Beach County and the Treasure Coast armed with low Florida mortgage rates, and sellers who refuse to budge from boom-time home prices despite inventory, foreclosures and tightened credit standards.
“Even to this day we still have stubborn sellers who aren’t being at all realistic,” said Mike Larson, a real estate analyst with Weiss Research in Jupiter. “Some won’t accept that the market has changed, and lower their prices.”
The result has been a painful slowdown with a ripple effect that has even local retailers crying foul as they see their sales dip.
As the song says, “Something’s gotta give,” and experts are betting that sellers will blink first.
And when they do, they’ll see a buyer’s market.
Meanwhile, Palm Beach County teacher Stephen Luzinski wonders why home prices and Florida home mortgage costs have not already come down more.
“I am still waiting for prices to fall,” said Luzinski, who’s looking to buy his first home. “I am out in this housing market almost every single day, but there does not seem to be a whole lot of budging by the owners.”
“It seems that most sellers are still looking to double, triple or quadruple what they paid for their house.”
Such seller attitudes are unlikely to last, according to forecasters. This is because there are just too much inventory on the market.
Nationwide, the number of vacant unsold units in the first quarter of this year set a record, the U.S. Commerce Department said recently, continuing a sharp upward trend that started last year.
David Seiders, chief economist for the National Association of Home Builders, puts the number at an “excess of about 1.4 million.”
Swelling inventory caused the National Association of Realtors to create a stir last week when it revised its forecast to predict that existing-home prices would fall this year for the first time since the Great Depression.
The 1 percent predicted drop - to $219,800 - is not as earth-shaking as it sounds, given that home prices in 38 of the 50 states declined in 2006, local real estate consultant Jack McCabe said.
Local home prices already have started their downward march, though they’re not moving as fast as some would-be seekers of Florida mortgage loans would like.
The median price of an existing single-family home in Palm Beach County fell from $388,000 in January to $375,100 in March.
In the Treasure Coast, however, prices have barely budged since the first of the year, remaining at a median of $239,700 in March. April home sales figures come out next week.
The number of unsold property on the market from Boca Raton to Vero Beach has been steadily rising, surging to a record 24,028 homes for sale in March, according to Illustrated Properties Real Estate.
That’s a 27-month supply at the March sales pace. The same month a year ago, there were 18,178 unsold homes.
Unfortunately, the surge in inventory will be swelled soon by foreclosures, which are reaching record numbers across the nation and locally.
“The biggest problem for single-family medium-priced homes is the beginning of this flood of foreclosures,” Delray Beach developer Frank McKinney said. “If you’re an optimist, it’s a buying opportunity.”
Not surprisingly, Realtors agree.
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