Home prices up; median cost $315,000

Jeff Ostrowski
Palm Beach Post
January 25, 2017



Home prices up; median cost $315,000

Housing market shifts from high-end houses to middle-class abodes.

After a November slump, Palm Beach County home prices bounced back in December.

The median price of houses sold this past month was $315,000, up from $300,000 in November, the Realtors Association of the Palm Beaches said Tuesday. The median price was up 5 percent from a year ago, although values remain well below their boomtime peak of more than $400,000, a level prices reached in 2005.

Reflecting a slowdown in the high end of the real estate market, the average sale price was down 10 percent from a year ago. Big-dollar mansion sales skew the average price higher, while a lack of high-end deals pushes the average price down.

“Sellers don’t want to hear it, but the absorption rate is just totally different than something that’s $400,000 or $500,000,” said Victor DeFrisco, broker at Exit Realty Premier in suburban Lake Worth.

As the housing market continues its bumpy recovery from the Great Recession, the activity has shifted from high-end houses priced at more than $1 million to middle-class abodes.

“Anything under the $500,000 mark is very, very active,” said Terry Story, an agent at Coldwell Banker Residential Real Estate in Boca Raton.

Story works in a market that boasts two of Palm Beach County’s hottest neighborhoods for 2017, according to Seattle-based brokerage Redfin. The company says the Hidden Valley and Boca Square neighborhoods east of Interstate 95 are poised to be the county’s most active. Both boast homes in the $300,000 to $400,000 range, the sweet spot for prices at the moment.

Story can attest to the intense demand in Boca Square. She recently listed a home there for $415,000 and got five offers. The seller signed a contract for “well over $415,000,” she said — even though the house itself was a solid but unspectacular property with no pool and a one-car garage.

“ The demand is high because it’s a nice area, it’s close to downtown and it’s in a very good school district,” Story said.

Despite such tales of a heated market, sales volumes took a dip this past month. The number of sales fell 5 percent compared with December 2015, perhaps reflecting a tight supply of homes for sale and rising prices. Realtors recorded 1,413 sales this past month, compared with 1,486 a year earlier.

The condo market followed a similar path. The median sale price rose 7 percent to $163,500, but the number of sales fell 10 percent to 1,013.

“December was a little slow, but it always is — it’s our worst month,” DeFrisco said.

In a sign that the housing market has mostly recovered from t he Great Recession, “distressed sales” have all but disappeared. The number of foreclosure sales plunged 46 percent from December 2015 to December 2016. Short sales — transactions when the seller owes more than the house is worth — fell 34 percent.

One wild card for the housing market is the direction of mortgage rates. They jumped after the presidential election, and most forecasters expect them to top 4.5 percent by the end of 2017.

Some see rising mortgage rates as a good sign.

“Sitting there at 3 percent for the last seven years — that’s not healthy,” DeFrisco said. “It shows you that the economy isn’t going anywhere.”

Story said rising rates have spurred many homeowners to put their houses on the market. They want to sell their current homes and buy new ones before rates rise, she said. jostrowski@pbpost.com

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