March was the 5th straight month that median single family home prices have climbed and as of April 1st that median price was $825,000. That represents a 2.9% increase over the past month and a 17.9% increase from year ago numbers. It's also another brand new all-time record high.

March sales were not historically strong, although they did jump 16.6% from February's dismal numbers. You might remember that in February, closings of single-family homes in the Northern Palm Beaches were the weakest we had seen since May of 2020 when Covid numbers started showing up and re-writing the record books. Compared to year ago numbers, sales of single-family homes in the region were down 50% from year ago numbers.

Inventory numbers remain historically low, however active single family home listings in the Northern Palm Beaches did jump a very healthy 23.4% during March. Compared to year ago numbers,  active single-family home listings in the region are down 17%.

Season is winding down, and while we have all learned over the past couple years anything can happen, it would be extremely unusual not to see a slowdown of homes sales coming our way once summer arrives. What is unique about this year, is we have never seen sales this slow during the high season months. This year first quarter closings of single-family homes in the area have fallen 39% compared to last year's numbers.

Certainly, inventory has played a significant role and supply will remain a critical part of the puzzle as we move forward. Interest rates will also start playing a far bigger role as the average overnight rate on a 30-year conforming loan jumped 36 basis points last week to the highest interest rates we have seen in nearly 11 years. Unfortunately, it seems very probable that interest rates are going to climb even higher.

Certainly, because we live in what anybody would consider an affluent area, many buyers come to the closing table and pay with cash. During March, 59% of all single-family home sales in the Northern Palm Beaches paid with cash and that percentage was up 9.2% over February numbers.

The percentage of all sales that close above a million dollars also is a huge factor in where median prices will head. Since November, well over 35% of all single-family home sales closed above the million-dollar threshold. In March that number was up to 39% which is a record.

Keep an eye on interest rates, but plan on them moving higher. Keep an eye on million-dollar home sales, but plan on them slowing over the summer. At one-point last summer, we saw median single family home prices drop about 7% and that decline was caused to a great extend on the slowdown in the million-dollar market. I believe we will see similar drops in home prices later this year, but the lack of inventory will also be a huge factor in where things go from here.

Perhaps the biggest influence on real estate is the larger economic picture. Many feel inflation, as measured by the consumer price index, will jump by 10% when the numbers are released on April 12th. We haven't seen a jump like that for 41 years. National debt continues to spin out of control, and the majority of our elected officials don't seem to think the money they are spending, that we don't have, never needs to be paid back. Time will tell, but it's pretty clear that inflation and higher interest rates will play a very significant role in what happen to the real estate market moving forward. Especially for those who do not have the ability to show up at the closing table with cash.

All I can tell you is if you are even thinking of buying, or selling a home, in this market you had better have a real understanding of the metrics that surround every property. Buyer's better go into any purchase with their eyes wide open. Over pricing a home can be a big mistake for sellers even with the lowest inventory anybody has ever seen. 

If you are selling, understand if your marketing and pricing strategies are well thought out you will probably sell your home lighting fast. Right now, you should get top dollar. You should also be getting a great commission and world class customer service. Paradise Sharks Real Estate can list most homes these days for a total commission to our clients of 3.5%. That includes a 2.5% buyer's broker commission. More and more brokers are starting to utilize a 2% co-broke strategy. If that is something our clients want to look into, on most listings, we can drop the total commission to 3%. If we handle both sides of any transaction, we usually can drop that total commission to 2%.

If Paradise Sharks Real Estate can ever be of help, in any way, please feel free to contact us anytime at tom@paradisesharks.com or 561.308.0175. If you have a question, we are happy to answer it. If you are looking for advice, we are happy to give it. If you want an honest evaluation of what your unique situation, we are happy to get it. It's what we do and we are proud of what we have accomplished in a career that has spanned decades.

Fins up……

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