Hard to believe that only six days remain in 2021 and oh, what a year it has been. Median single family home prices in the Northern Palm Beaches are up from $592,000 on January 1st to $740,000 today. That's a jump of 25%. Only once in history, has a higher one-year gain in median single family home prices ever been recorded in the region. That was 16 years ago, in 2005. Anyone who has been around long enough knows all too well what happened back then. Prices crashed, and it took them 14 long years to recover.

2021 has not only been a banner year for single family home prices, it has also been an incredible year for home sales. Closings were up for the 4th straight year. Up for the 11th time over the past 13 years. It has been an incredible period to be involved in the real estate industry in the Jupiter area. Wow, have things changed. Dramatically.

Median single family home prices in the Jupiter area have now been up for a record breaking 10 consecutive years. The number of home sales in a single year have never been higher than in 2021. Ever. That old pandemic created change that nobody would have dreamed of just 2 years ago.

So, with home sales, and home prices, both at all-time highs, homes selling almost immediately in most neighborhoods, if sensible pricing and marketing strategies are utilized, then why on earth would times be so uncertain for realtors as we get ready to kick off another new year?

The biggest concern, of course, is inventory levels. Without much to sell, and a record number of agents roaming the streets, 2022 looks to be a tough year coming our direction. As of this morning, there are only a total of 247 single family homes on the market for sale in the Northern Palm Beaches. There are only 122 condos available for sale and 44 townhomes. Current inventory levels sit at 1.6 weeks for townhomes, 3.3 weeks for condos and 3.7 weeks for single family homes. These numbers are in weeks, in an industry where inventory, prior to this year, has always been measured in months.

There is truly very, very little to sell with a record number of real estate agents trying to figure out how they are going to keep their sales numbers up. Inventory is not only at all-time record lows, it is at levels nobody could have ever envisioned before Covid came to town. Not even close. Inventory in the Northern Palm Beaches is 36% of what it was last year at this time. A record number of realtors ready to kick off a new year full of promise and hope. And only 3.6 homes to sell compared to the 10 they would have had a year ago.

But the pandemic has now been around much longer than a year, We are quickly closing in on 2 years with no end in sight. The pandemic actually started to adversely affect inventory levels in the area back in April of 2020. Inventory, this morning, is only 20% of what it was back then. For every 10 homes a realtor had to sell just 20 months ago, there are only 2 today. And more realtors than ever before. Let those statistics sink in.

Interest rates are another huge concern. Last week, they felt slightly, but still sit near the highest levels we have seen in 38 weeks. 2021 was also the year we saw the lowest interest rates we have ever seen in this country. Ever. This morning, rates on a 30-year conforming loan are up over 13% from those all-time lows. The problem is, we are facing the worst inflationary period we have seen in almost 40 years. The Fed has already announcing they are looking to raise interest rates three times in the coming year. Talk about something that can take the air out of the real estate market. The potential impact is huge. We all must pray that inflation is brought under control, but with the massive debt and spending that has become the rule, it's not going to be an easy problem to tackle.

And then there are real estate commissions that have been under downward pressure now for 12 straight years. In Jupiter, the percentage of buyer's brokers who received a 3% co-broke on single family home sales fell once again this year. It has fallen now every single year since 2009. It fell 25% in 2021. Since 2009, it has fallen a dramatic 91%. Real estate commissions, and the services seller's receive for those fees, are negotiable and consumers, with increased competition in the industry are paying lower fees than ever before.

With far fewer homes to sell, more agents to compete with, interest rates potentially heading higher than we have seen in a long time and a period where 2% co-brokes are grabbing significant market share, it's a time for agents and brokerages to improve and work even harder. It's not just the real estate industry, it's every industry. To succeed you will need to stand out. You will need to meet your clients' needs in ways those before you never imagined.

As I sit here working on my goals for the upcoming year, it is a year full of uncertainty. More than I have ever seen, by far. And I have been doing nothing but real estate for many, many years. Decades. The real estate market has changed dramatically, the world has changed dramatically, and we are living through a period that is totally off the wall in so many ways.

I am also energized for the upcoming year and the many challenges it will present. Knowing that my passion is to provide the best value, the lowest prices to my customers, along with a very high level of customer service, I am ready to tackle whatever the market throws at us. Understanding I work for others, and not myself, always has been, and always will be, a pathway to success. Old school is good, caring about others and helping them meet their goals, is what keeps me driven. I am looking forward to 2022, the challenges, writing weekly articles to help anybody doing anything real estate make informed choices. Thinking outside of the box to differentiate myself from the masses. 

We have some great plans we will be working on the first week of January that really excite me for the year ahead. If you need help with anything real estate, a simple question, to a complex problem, we are here to help. Complementary consultations are easy to schedule by reaching out to us anytime at 561.308.0175 or via email at tom@paradisesharks.com. Have a safe New Year's celebration and we can't wait to see you in 2022 and another year of helping in any way that we can.

Fins up…….

#2022

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