100% of Ask in August

I’m doing an interview with a news station late next week on whether there is a bubble in the real estate market. The answer is “no way – unless there was a worldwide economic situation and even then, it would be limited.” Let me explain why.

Last Sunday, the regular baseball season ended. To me that is the nail in the coffin to the end of summer. This year my White Sox made the playoffs. We are already down 2-0 to the Astros. If you read this late in the day on Sunday, they will probably be eliminated, and for me we can skip Fall altogether.

Seasonality in real estate is easier to define. It’s the auto shipping truck. Those awkward trucks carrying 7 or so vehicles from up North to Florida. This week one of our agents was in Jonathan’s Landing in Jupiter and had the first sighting. By next Sunday it will be a common occurrence.

See how Seasonality is defined and how it works for buyers and sellers in South Florida.

This brings me to why there is not a Sellers’ market. According to the MLS, the end of August 2021 there were 2,369 active listings. In August 2020 (the hot market was well underway) there were already a low 4,227. That’s a 44% decrease in inventory. The condo/townhouse market is even worse with 2,157 homes available compared to 5.321 in August 2021. That’s a 59.5% drop.

Search the MLS for a home to buy here. Once you break it down, there isn’t much. There are equal slim pickings on the Rental Market.
The craziest occurrence is that the average list price for single family homes in August received was 100% of asking!?! For condos, you can expect a 2.3% discount!?!

The reason there is not a bubble in our market in my opinion is we are going into season with nothing. And now you are bringing the snowbirds. In addition, the Canadians and other foreigners who sat out last year are coming with a years’ worth of pent-up demand. That followed by the return of the renters starting January 1. There is some new construction more out west of areas by 95 and the Turnpike but it can’t possibly keep up with demand. The prime areas over the past 40 years are built up and sold out. Factor in real inflation, with pent up demand and low supply and my crystal ball sees prices going up.

Normal Schedule of Purchasing

- Snowbirds arrive between October 15 – November 15.
- But they do not buy so much between those dates. It’s more back and forth. Then you have Thanksgiving, Christmas/Hanukkah, New Years.
- The Renters come down on January 1.
- Relatives visit during Winter Break. Figure December 20 – January 5.
- Everyone plays a round of golf, goes to beach, does a Costco run and celebrates the relatives going back up North.
- Looking takes place between Jan 10^th and February 15^th. People in this time frame are figuring out where they want to be. Do I hold off a year? Delray Beach condo or Palm Beach Gardens Single Family Home? In a normal market, the cherry homes will sell in this period. In a hot market Buying starts here.
- Feb 15^th – March 31. This is the feeding frenzy. Renters must purchase before their rent ends on March 31. Girt bought a home and now her friend, Barbara, who would like to keep up with Girt, gives her husband Irving the “eyes” at an open house, when he isn’t interested in purchasing. Irving knows from the “eyes” that it’s time to purchase and if he does not than uh oh……….
- April – May. Snowbirds still buying but with more of a shotgun approach because they know what they want. If it’s a bad market, prices can dip. If it’s a strong market, then there are only leftovers to purchase and you know prices will be going up next season.
- April – July 3^rd. Families start looking right after spring break. Mid May and June are the big family purchasing months as school ends. Mom wants to purchase by July 4^th. School starts on August 15^th typically and families want to be settled before that date.
- July – August- September. Our deadest months. Snowbirds and Renters are long gone. Locals are on vacations. Hurricane watch starts in late August. Some pre buyers will come down after Labor Day. And then the cycle starts again.

Jeff Lichtenstein is owner and broker of Echo Fine Properties, a luxury real estate brokerage selling real estate in Jupiter and homes in Palm Beach Gardens, Florida. He has 20 years of real estate experience, has closed over a 1,000 transactions, and manages over 50 agents in a non-traditional model of real estate that mimics a traditional business model. Some publications he has been quoted in.

Feel free to ask him a question directly at [email protected].

Posted in Jeff's Journal, Market Updates & Statistics on October 9, 2021 at 8:13 am.

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Days on MarketDOM

40Days | 67%

Active InventoryAI

5,257 Homes | 54%

Median Sales PriceMSP

$617,500 | 2%

New ListingsNL

1,597 Homes | 8%

Closed SalesCS

1,113 Homes | -11%

Dollar VolumeDV

$1.1B | 0%

Months of InventoryMOI

4.7 Months | 62%

Pending SalesCS

1,102 Homes | -8%