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Palm Beach County Housing Market Update - May 2011

Todd Breen - Saturday, May 7, 2011
Property Management Blog "Is now the time to buy Florida Real Estate again?" "Have prices bottomed out yet?" These are the questions we're asked everyday at our real estate office and property management firm. Our answer? "Let's look at the market stats" PRICES This graph shows that our post-boom real estate prices have returned to pre-boom levels. That's the first good sign. With prices at historic 10 year lows, we're finally seeing good buying opportunities at prices that make sense. NUMBER OF SALES The number of homes actually selling each month is always a great indicator of market trends, and you can see that trends have steadily been trending upwards for the past two years. That's a good indicator that demand is increasing, and as we all know, increase in demand puts upward pressure on prices. SUPPLY During 2010, a number of south Florida law firms were indited for 'robo-signing' loan foreclosure documents. Many of these law firms have gone from hundreds of employees to closed, resulting in a drastic reduction in the number of foreclosures available to purchase. While there's certainly a backlog of homes in 'foreclosure pipeline', there's no telling when lenders will be able to resume normal foreclosure activity. Lenders don't want to foreclose, and are becoming far more cooperative with Loan Modifications and Short Sales. How cooperative? This past month, Chase Mortgage announced they would pay sellers up to $20,000 to do a short sale! So it seems the 'foreclosure pipeline' may not come back again anytime soon... Another factor that is effecting supply? There's virtually NO new homes being built anymore, and very few slated to be built in the foreseeable future. With so few new homes to choose from, buyers have to compete for resales, which is why we're seeing the number of homes on the market steadily decline for the first time in six years. How much have they declined? 27.6% since last year. . . and that's a great trend. In fact, inventory levels in Palm Beach County have fallen from a high of 23 months to 9.6 months.  That's a dramatic shift. DEMAND America's on sale, and the world knows it.  Real Estate ABC's: The US dollar has fallen dramatically against world currencies over the past year. Buyers from Australia, Brazil and Canada taking advantage of their stronger buying power and buying everything they can.  With prices back to where they were 10 years ago, locals can afford to buy too.  Demand is increasing. SUMMARY Rising Demand. Falling Supply Prices returning to a level where locals can afford to buy. Foreign purchases at record levels. Is now the time to buy? Have prices bottomed out? It's beginning to look that way. If you're an investor looking to buy an investment property in Palm Beach County, see if you qualify to work with our agents. Why? Because the agent who helps you buy the property will also be the agent who leases it and manages it for you. Smart Asset Acquisition and Management begins here. Email for a consultation.