Palm Beach County’s single-family home prices surged to a near record high in October with more closed deals and more choices for homebuyers compared to the same time last year.
The median price for an existing single-family home was $622,733 last month, which is 9% higher than in October 2022 and just under the record high of $625,000 set in June, according to a report released Nov. 21 by the Broward, Palm Beaches and St. Lucie Realtors Group.
A 3.5% increase in completed sales and an 11% increase in new listings shows there’s some movement again in a market that stagnated during the regular summer doldrums but also amid higher interest rates and swelling insurance costs.
“What closed in October surprised me,” said Corcoran broker associate Linda Cullen, who specializes in neighborhoods near downtown West Palm Beach. “I think sellers finally have a better understanding and are being more realistic about what they can really get. There’s not this ‘pie in the sky’ idea anymore.”
‘I almost had a heart attack’:Florida homeowners rattled by property insurance costs
Although mortgage-interest rates trended down this month, they are still more than double what they were just two years ago. In mid-November 2021, a 30-year fixed mortgage had an interest rate of 3.11%, according to Freddie Mac. As of Nov. 16, that had risen to 7.44% for a 30-year fixed mortgage.
John Moore, a Realtor with Coldwell Banker in Delray Beach, said he’s had clients waiting for prices and rates to go down, only to miss out on homes while prices and rates rose.
“Some people up north think the market in Florida is going to crash, but we’re not in nowhere Florida. This is Palm Beach County, and it’s thriving,” Moore said.
Moore attributes a 12.5% increase in inventory, in part, to people selling second, nonhomesteaded homes that have experienced hefty insurance and tax hikes. Most homes that are considered a primary residence have their assessed values capped at 3% each year, which mitigates property tax increases.
Despite the increase in supply to 3.6 months, it’s still a seller’s market. A balanced market where neither the buyer or seller has the advantage is considered a 5.5 to six months’ supply.
Hoping to temper insurance price increases, state lawmakers this month put another $180 million into the My Safe Florida Home Program. The program helps homeowners harden their properties against hurricanes by paying up to $10,000 to replace windows, doors and roofs.
How much the increase in money, and reforms made this year to reduce the amount of fraud in the insurance market, will cut insurance premiums is unclear. An October report by catastrophe risk modeling firm Karen Clark & Co. said Florida premiums would be higher if the reform measures to reduce litigation hadn’t passed.
But lawmakers can’t control the weather or construction costs, the report notes.
“These factors will continue to influence future homeowner premiums, and it is unlikely these costs will go down,” the report says.
Florida homeowners pay an average insurance premium of $6,000, which is more than three times the nationwide average insurance premium of $1,700, according to the Insurance Information Institute. Also, the institute says Florida’s average premium has increased by a cumulative 102% over the past three years. It projects an average statewide increase of 40% or more in 2023.
Still, Florida is adding new residents.
Census data released last month on state-to-state migration showed nearly 739,000 people moved to Florida between 2021 and 2022. During the same time, about 490,000 people left the state.
Florida’s Demographic Estimating Conference estimates the state will grow from about 22.2 million people to 25.3 million over the next decade.
Who’s moving to Florida?What new driver’s license data tells us
“Over the past year I’m hearing about more and more people coming from California because prices have gotten so outrageous,” Cullen said. “We think our prices are outrageous, but they are less outrageous than California and New York.”
Statewide, the median sale price for a single-family home was $410,000, which is 2% higher than the same month last year. The median price for a condominium or townhome statewide was $321,990, which is 4% higher than in 2023.
The median sale price for a condominium or townhome in Palm Beach County last month was $315,000. That’s about 9% higher than the previous year.
Florida Realtors Chief Economist Brad O’Connor said the market “has not improved much, but it hasn’t really worsened either.”
“We’ll stay in this holding pattern until interest rates make a true downward shift,” he said.
Kimberly Miller is a veteran journalist for The Palm Beach Post, part of the USA Today Network of Florida. She covers real estate and how growth affects South Florida’s environment. Subscribe to The Dirt for a weekly real estate roundup. If you have news tips, please send them to kmiller@pbpost.com. Help support our local journalism, subscribe today.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.