Palm Beach County’s housing market continues to confound the lofty expectations created by a robust job market and rock-bottom interest rates.
The typical house sold by an agent traded for $350,000 in November, down from $359,000 in October and up less than 1% from a year earlier, according to the Broward, Palm Beaches and St. Lucie Realtors.
Meanwhile, home sales rose only slightly to 1,194, up 0.4% from October 2018, Realtors said Thursday.
The tepid results come in spite of record-low unemployment, record-high stock prices and microscopic mortgage rates, three economic factors that typically drive demand for homes. Mortgage giant Freddie Mac said Thursday that the average cost of a 30-year mortgage was 3.73 percent, unchanged from last week.
Realtors and economists say Palm Beach County home prices might be hitting a ceiling imposed by affordability challenges.
In St. Lucie County, the market long seen as an affordable alternative for Palm Beach County workers willing to commute, prices soared over the past year. November’s median price was $241,500, up 9.8 percent from November 2018.
In Palm Beach County, homeowners seem to be responding by not selling. The number of homes listed for sale fell nearly 14 percent.
“We are starting to see a shift in inventory that is tipping the market towards the seller’s favor,” said Jeffrey Levine, President of Broward, Palm Beaches, and St. Lucie Realtors.
Homeowners are staying in their homes for 10 years or longer, another factor squeezing the supply of homes. While housing experts generally expected baby boomers to downsize and sell their abodes to millennials, things haven’t worked out that way.
Nationally, the median sales price jumped 5.8% compared to November 2018, the National Association of Realtors said Thursday. NAR said low mortgage rates are boosting the market.
Borrow $300,000 at 3.73%, and the monthly payment is $1,386. Taking a loan for the same sum at last fall’s rate of 4.55% meant a monthly payment of $1,529.
Palm Beach County home prices remain well below their record highs. In November 2005, the median house price hit an all-time high of $421,500.