2013 Palm Beach County Real Estate Year in Review

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# (in sq. miles)
CITIES	1980 Census	1990 Census	2000 Census 2010 Census		2013***	2020 Proj**	Additional Seasonal Population*	Land Area# (in sq. miles)
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.