The numbers are in and the year 2013 ended with the real estate market on fire.
- Closed sales from December 2012 through December 2013 in PBC are up 11.9%; 1,325 in 2013 and 1,184 in 2012
Single-Family Homes, December 2013 versus December 2012
- The median price of a single-family home went up 15.3%, from $229,750 to $265,000
- Inventory is practically the same at 6,720 in 2013 from 6,764 in 2012
Condos/Townhomes December 2013 versus December 2012
- Interesting that the condo market is much different
- Closed sales are down 17.9%. Prices are up a staggering 22.3%. This reflects in the supply of active inventory, as active listings are down 13.7%.
Million dollar sales in 2013 versus 2012
- The million dollar market has recovered nicely. The amount of closed transactions were up 26.8%; 835 in 2013, 658 in 2012.
So, why such an increase in prices? Here are 8 reasons why:
- Inflation! Yes, inflation is historically lower, but there has been a cumulative 17.8% inflation since 2006, when the market crashed, according to the Bureau of Labor Statistics. So, prices should have come back 17.8% if nothing else. I never hear anyone talk about this, but I believe it’s the single biggest reason prices have come up and why there might be more room to go higher.
|
Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
Ave |
|
2006 |
4.0 |
3.6 |
3.4 |
3.5 |
4.2 |
4.3 |
4.1 |
3.8 |
2.1 |
1.3 |
2.0 |
2.5 |
3.2 |
|
2007 |
2.1 |
2.4 |
2.8 |
2.6 |
2.7 |
2.7 |
2.4 |
2.0 |
2.8 |
3.5 |
4.3 |
4.1 |
2.8 |
|
2008 |
4.3 |
4.0 |
4.0 |
3.9 |
4.2 |
5.0 |
5.6 |
5.4 |
4.9 |
3.7 |
1.1 |
0.1 |
3.8 |
|
2009 |
0.0 |
0.2 |
-0.4 |
-0.7 |
-1.3 |
-1.4 |
-2.1 |
-1.5 |
-1.3 |
-0.2 |
1.8 |
2.7 |
-0.4 |
|
2010 |
2.6 |
2.1 |
2.3 |
2.2 |
2.0 |
1.1 |
1.2 |
1.1 |
1.1 |
1.2 |
1.1 |
1.5 |
1.6 |
|
2011 |
1.6 |
2.1 |
2.7 |
3.2 |
3.6 |
3.6 |
3.6 |
3.8 |
3.9 |
3.5 |
3.4 |
3.0 |
3.2 |
|
2012 |
2.9 |
2.9 |
2.7 |
2.3 |
1.7 |
1.7 |
1.4 |
1.7 |
2.0 |
2.2 |
1.8 |
1.7 |
2.1 |
|
2013 |
1.6 |
2.0 |
1.5 |
1.1 |
1.4 |
1.8 |
2.0 |
1.5 |
1.2 |
1.0 |
1.2 |
1.5 |
1.5 |
|
2014 |
- 2. Historic Lows in New Construction/Increased Population Growth
Very little New Construction has curbed the supply side, while we’ve had excellent growth. This is going to continue, and with very little building in the short term, prices may continue to rise. According to Palm Beach County Planning, there will be almost a 9% increase in population in Palm Beach County over the next 9 years.
|
CITIES |
POPULATION (Permanent Residence) |
ts) |
Additional Seasonal Population* |
Land Area# |
||||
|
1980 Census |
1990 Census |
2000 Census 2010 Census |
2013*** |
2020 Proj** |
||||
| BOCA RATON |
49,447 |
61,492 |
74,764 |
84,392 |
86,041 |
91,679 |
10,940 |
29.04 |
| JUNO BEACH |
1,142 |
2,121 |
3,262 |
3,176 |
3,191 |
3,619 |
1,352 |
2.07 |
| JUPITER |
9,868 |
24,986 |
39,328 |
55,156 |
56,577 |
60,465 |
9,240 |
22.11 |
| JUPITER INLET COLONY |
378 |
405 |
368 |
400 |
401 |
416 |
79 |
0.14 |
| NORTH PALM BEACH |
11,344 |
11,343 |
12,064 |
12,015 |
12,184 |
12,592 |
1,997 |
3.70 |
| PALM BEACH |
9,729 |
9,814 |
9,676 |
8,348 |
8,168 |
8,620 |
6,310 |
3.70 |
| PALM BEACH GARDENS |
14,407 |
22,965 |
35,058 |
48,452 |
49,434 |
55,276 |
5,751 |
56.25 |
| RIVIERA BEACH |
26,489 |
27,639 |
29,884 |
32,488 |
33,369 |
36,297 |
5,389 |
8.45 |
| TEQUESTA |
3,685 |
4,499 |
5,273 |
5,629 |
5,649 |
6,196 |
928 |
1.80 |
| WELLINGTON |
20,670 |
38,216 |
56,508 |
58,108 |
61,711 |
4,327 |
45.25 |
|
| WEST PALM BEACH |
63,305 |
67,643 |
82,103 |
99,919 |
103,038 |
113,131 |
6,228 |
55.48 |
| TOTAL COUNTY |
576,758 |
863,365 |
1,131,191 |
1,320,134 |
1,345,652 |
1,465,300 |
143,837 |
1,976.56 |
3. Healthier Economy.
Florida’s job rate dipped to 6.4%, this December. Yes, we have a long way to go and the recovery has been anemic at best, but the panic of 2009 is in the rear view mirror.
4. Investors
Hedge Funds and investors like Warren Buffet have bought much of the inventory on the lower end of the market. These investors are running it like a profitable business and this got rid of much of the excess supply.
5. FHA Lending
FHA lending, which requires less of a percentage down, opened up more opportunities.
6. Short-Sales Are Winding Down
Without these “must sellers”, the low prices are no longer available.
7. Short-Sellers from the Past Are Now Purchasing
People who short-sold early on are now getting their credit back and are reentering the market as purchasers.
8. Pent Up Demand
Many people wanted to move but couldn’t for financial reasons or couldn’t sell their home. The market not frozen allows them to sell and then they can make a purchase. Also, homes have aged and people want something new, or they became empty nesters, etc.
