Mortgage rates are low, the job market is on fire and, in a mysterious disconnect, Palm Beach County, Fla., home sales lagged again in March.
Realtors recorded 1,521 sales in March, a 9% decline from March 2018, according to a report released Monday. That continues a slow spell that set in last fall.
“This is now the fifth consecutive month we’ve seen a decrease in year-over-year closed sales,” said Jeffrey Levine, president of the Realtors of the Palm Beaches and Greater Fort Lauderdale.
Even as sales lag, prices are holding steady. The median price of a house sold last month was $350,000, up 0.6% from a year ago and a bit below last summer’s high of $355,000.
The slowdown presents something of a puzzle. Economists and Realtors note that the cooling began in November, when mortgage rates spiked to nearly 5%. Since then, however, loan rates have plunged. The average cost of a 30-year loan this week was just 4.2%, according to mortgage giant Freddie Mac.
Meanwhile, Palm Beach County unemployment fell to a microscopic 3.2% in March, and job growth was robust. And the county’s population growth has begun to accelerate again.
The combination of cheap money, plentiful jobs and a growing population usually fuels a buying frenzy. Instead, Palm Beach County’s housing market continues to slow.
“It makes no sense,” said Jim Fantin, an agent at Remax First Choice in Palm Beach Gardens. “People are feeling uncertain as to where the market is going to go.”
Fantin sees little cause for concern about the overall market.
“The market is healthy,” he said. “We’re shifting slowly to a buyer’s market.”
Realtors reported a 5.7-month supply of houses for sale in March, up from a 5.1-month supply in March 2018. A six-month supply is considered a balanced market, one that favors neither buyers nor sellers.
The number of houses listed for sale in the county rose to 7,959, up nearly 9% from a year ago. With more homes available, buyers feel less urgency. The typical time for a seller to land a signed contract increased to 62 days in March, up from 56 days in March 2018.
“When you have more inventory, people tend to be picky,” Fantin said.
The cooling trend was even more pronounced in the condo and townhouse market. Realtors closed 1,205 sales of condos in March, down 10.5% from March 2018.
The median condo price fell to $175,000, down 1% from a year earlier.
Palm Beach County home prices remain well below record levels. During the housing bubble, the county’s median resale price peaked at $421,500 in November 2005 (a sum that adjusted for inflation equates to $542,238 in today’s dollars). Within a few years, the median price had crashed to less than $200,000.
Tribune Content Agency