Jupiter Florida Real Estate Market Insights January 2024
I hope everyone had a great holiday season, and New Years. We’ve returned from a great adventure at Disney!
If you’ll remember the end of last year I kept saying that the true driver of the velocity, or lack thereof, in real estate sales was interest rates. To give some context, January of 2022 rates were around 3.5%. January of 2023 they were around 5.5%. Going into October of last year they were above 7.5%. The thesis was as rates drop, buyers will come back into the market. We’ve moved down to around 6.5% recently. Did this spur the market on? Well it’s not going to really show you in the data I give as it runs roughly 30 days behind. However, anecdotally, I can tell you I’ve been very busy. A lot of Buyers that were waiting called to say they’re ready to go. Should rates hold, or even fall, I expect a busy first quarter. That may lead to increased competition for Buyers, which of course, is good news for Sellers.
A quick side note. I received a few emails from you guys asking if I thought rates would pull back down to the levels of 2 years ago. My opinion, no they won’t. That being said, there are ways now for Buyers and Sellers to structure deals to create win win scenarios. Most commonly that’s having a Seller offer to give a buyer credit to buy down their rate. Why would you want to do this? The answer is math. If I tell you that 1% less in a Buyers mortgage rate (costing the Seller a hypothetical $15k) would result in you as a Seller being able to receive $100k more in proceeds, would you take that deal? Most would. If you’re listing a property with me we will go through this scenario in detail to see if it is something that would benefit you.
Ok so onto the data:
Starting with single family home data in Jupiter
Median home pricing. You guys are in for a treat this month as I’ll do the sales brackets so you can see where the market is actually moving. So we will glaze over this one. $848k is a big number, but trending down as you can see. Let’s see where it goes, but as for now it looks like a higher volume of sales on the lower end is outweighing sales on the higher end bringing the number down.
Number of properties sold, this is the one that matters most. Is a lower number of properties sold in December a surprise? If you said yes you haven’t paid attention to the data on the slowest sales months of the year. If you’ve been paying attention, a decline this month was no surprise. That being said, for those of you looking at this chart, you can see we just hit a 5 year low. That’s more than significant. Let’s see if January can pull us out, but if this level remains constant this is a real wake up call for Sellers.
List to sales headed back down. Again what this really means is how accurately Sellers judged the market, and how much buyers were able to negotiate off listing price. Again, it was December so don’t put too much stock in this, but seems like Buyers got the better of the deals here.
Median days to sales rose, not great news for sellers, but again, December. Up from 32 days year over year, but let’s not get too excited yet. That being said it looks like there was some relief for buyers, remember how I said its good to be a buyer in December, not so great to be a seller, case in point as we trend up.
We can glaze over price per square foot, clearly the overall trend could be heading down. I’ve said many times, buyers want properties in nice, renovated, turn key condition. These are going to carry higher price per square foot. Because of that I’m guessing we stay above $375 a foot, but we shall see.
Total dollar volume continues to be a non surprise for me, and hopefully you. The bulk of sales are taking place at lower price points, so it’s going to take a lot more sales to get the total volume way up until the high end market starts to participate at a meaningful level. For those asking what it looks like when the higher end of the market is participating, this peak here was back in May of 23 when volume was 4 times higher at $240 million on 109 sales. Again we just put up $55 million on 43 sales, so way off there.
Finally the other stat near and dear to my heart, months of supply. Looks like we’re still climbing north which is good for Buyers, not so good for Sellers. December of 2023 there were 3.97 months of supply, now about flat at 4.17 months, so it would have been better by a hear to be a seller last year, and a buyer this year, but again, it was December so let’s see what January data looks like before reading too much into it.
Ladies and gentlemen, here is the sales data by bracket. Once again, where’s the volume of sales actually happening? 44% of sales took place below $750k. The highest number of sales is taking place in the lowest price bracket. Where’s the most competition for Buyers? The lowest price bracket. Where’s it easiest to be a Seller? Below $750k. Month after month this is what we’re seeing right. Don’t let the headlines of luxury fool you. That being said, is it a good time to be a Buyer on the higher end? Yup. Why? Not a lot of sales means a lot of these higher dollar properties aren’t seeing offers. If you’re a Buyer spending between let’s say $1.7 million and $2.5 million, do you think the Seller of that home is seeing a lot of offers? Statistically no they’re not. Despite what older sales comps say, you can have a field day in this bracket as a Buyer. If you’re a Seller in this bracket you honestly may either want to wait the market out a bit, or price on the low end of your value estimate.
Let’s switch over to Condos and Townhomes
Median pricing rose year over year from $475k to $650k which is a monster sized move statistically. To get a better understanding of this in a contextual basis lets see how the rest of the data feeds in. And yes of course, we will look for clues in the price bracketing. But I will say this, my opinion is a lot of it has to do with townhomes. Townhomes tend to have been built more recently, so you have less deferred maintenance issues. The HOA fees tend to be lower than condo’s. And they’re very versatile product. What I mean is a second home owner just has to unlock and lock the door and it works for them. Full time homeowners don’t have to worry about mowing the lawn, and they get the full square footage of a home. In short, there’s a lot to like with townhomes and the larger number of higher dollar sales were in townhomes, dragging the average up.
Well prices may be up, but transactions, wow this is ugly. If median prices are up and sales are down its telling me that buyers are willing to pay for quality, but still within a budget. We’re creeping down towards 5 year low on total sales numbers. Of course, this is December data which we knew would be weak. Something to really keep an eye on here. Distinct Buyer advantage on this one.
List to sales just tanking. What’s that say? Sellers are having to negotiate. So if you’re a Seller be prepared. And of course, price correctly from the start.
Median days on market possibly leveling off here. From 27 days on market December of 2022, to to 43 days a year later, so a big headwind for Sellers here. Of course more days on market can mean a number of things from too few buyers, to overpriced properties on the market. If you’re a seller listing with me, what I’m going to tell you, be prepared for a longer time to contract. That’s just the reality.
Price per square foot still on the high side. Again to me that just saying people are paying for quality. I just keep hearing this from Buyers, and seeing it play through. So if you’re listing something junky and outdated, you’ve been warned. Buyers are over the HGTV renovate a space and make it your own era.
Total dollar volume, could we be rebounding? Lower sales but higher volume is going to mean more sales in the higher dollar brackets. Now is that what’s really going on? In a moment we can take a look at the price brackets and see if we can find the answer to that one.
Last month I was saying if months of supply kept climbing Sellers were going to be in for a long haul. It looks like we may have chipped away at that inventory. Of course fewer listings coming to market with a steady pace of sale will also bring this number down. So a few things could be happening under the hood here. But for now just know that January typically sees a lot of new listings hit the market. If pent up demand does not absorb those listings, look for a climb higher here.
Let’s take a look at the bracket data. Who wants to be a Seller below $750k? 55% the market activity is taking place there. So right about now you’re probably saying, what the hell Casey, you just old me prices are increasing in condos and townhomes but you’re showing me all of the sales are taking place in the lowest 2 brackets. Let’s stay on this slide for a second, let’s go ahead and total up the percentages above $1 million. I get 18%, without the fancy decimals. So in December 18% of the condo and townhome market sold for more than $1 million, follow me? Good.
Ok now let’s pull up the slide from the last time I did this which showed September sales data. Let’s total it up and call it roughly 7% of sales took place above $1 million. You following me? More than a 100% increase in the total number of sales that took place in condo’s and townhomes in a 90 day span. Now do you see how we got to that increase in median pricing? While luxury is clearly not dominating the total number of condo and townhome sales, there’s a heartbeat there that wasn’t before. I keep saying it, this is likely the result as a flight to quality!
So that’s it. As always please feel free to call, text, or email me if you’re looking to buy or sell some real estate or around Jupiter Including Northern Palm Beach County, whether you’re timeline is a week or a year from now, I’d love to chat.
