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Last month, homebuyers paid a median price of $615,000 for a single-family home, which is about 2% higher than April’s record high and a 30% jump from May 2021, according to a report released Tuesday by the Broward, Palm Beaches and St. Lucie Realtors Group.
The average sale price topped $1 million last month. That’s the sixth time since March 2021 that the average price hit seven figures. It also marked a 1.7% increase from the same time last year.
But the price hikes came with a 19% plunge in closed deals and amid increases in new listings. May’s 1.7 months supply of inventory was a nearly 31% increase from May 2021.
“Three months ago I would have said there were no signs of a housing correction but that’s changing,” said Bev Knight, broker owner of Ocean Estate Properties. “It’s just a very subtle correction because there is still low inventory for desirable properties.”
A balanced housing market that neither favors the buyer nor the seller has a 5.5 months supply of inventory, according to Florida Realtors. Anything lower is traditionally a sellers’ market. Homes went under contract at a median time of 11 days last month, the same as last year.
Florida Realtors Chief Economist Brad O’Connor said Florida remains “deep in sellers’ market territory” because inventory has been low for so long.
“But we’re starting to see some progress back toward a balanced market,” O’Connor said.
The Naples metropolitan area had the highest median sale price in Florida last month at $850,000. Homosassa Springs in Citrus County had the lowest at $270,000. Every area experienced increases in prices as compared with May of 2021.
It’s possible Palm Beach County will be insulated from major market fluctuations by the increase in pandemic-motivated buyers and those following corporate relocations to West Palm Beach.
Still, higher mortgage interest rates means less buying-power. Someone who could afford a $500,000 home with a 3% interest rate may be knocked down to a $375,000 home at 6%.
The national average Tuesday for a 30-year fixed rate mortgage was 6.01%, according to Bankrate. That’s up from the high 5% range last week.
In May, the average 30-year fixed mortgage was 5.23% compared to 2.96% in May 2021.
“We had a complete perfect storm for a long time,” said Echo Fine Properties President Jeff Lichtenstein, noting that pandemic-grounded snowbirds bought homes, as well as people with the freedom to work from anywhere. “There was a lot of plus, plus, plus, but now there are some dents. The saving grace for our area is there is still a shortage of homes.”
Townhomes and condominiums in Palm Beach County continued to see a downward trend in supply last month with a 1.3 months supply available. That’s about 25% lower than last year.
The median sale price for a Palm Beach County townhome or condominium was $307,000, an increase of 23% from 2021. The average sales price was up 8.4% to $522,112.
Realtors prefer to use the median price as a measuring stick because it is the midpoint where half of the properties sell for less and half for more. It isn’t as easily skewed as the average price, which can have steep fluctuations based on a bulk of lower-end sales or one mega-sale.
In Martin County, the median price for a single-family home last month was $584,498, about 24% higher than last year. St. Lucie County’s median sale price was $390,000, which is up 30% from 2021.
Statewide, homes sold last month for a median price of $420,000, a 22% increase from May 2021. Inventory was up 27% to a supply of 1.4 months.
“Some sellers are calling us to list their house out of panic thinking the market is going to crash,” said Talbot Sutter, president and broker of Sutter and Nugent real estate. “But our area is in a bubble where people are coming for so many different reasons that it would have to be a really devastating crash to significantly affect us.”
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