It has been a wild ride lately in South Florida’s housing market. Like many other regions in the country, we’ve seen housing prices rise for months on end, reaching as high as levels from before the housing crash in the mid-2000s. In West Palm Beach, home prices have increased 37.3% over the past year.
However, with the current market being unlike any we’ve ever seen, it’s nearly impossible to predict what’s to come next. Economically speaking, there are signs that the country is headed towards a recession – something that is historically not promising for the housing market. But, at the same time, low unemployment rates and consumer spending remains strong. Even the experts aren’t sure which direction our country is going.
This uncertainty can make buying or selling a home a much more stressful process for all involved. Those looking to time the sale or purchase of a home perfectly may be hard-pressed to do so, but monitoring the market can help to make an informed decision.
Sellers will be happy to know that pricing remains high for homes throughout the region. The Zillow Home Value Index for West Palm Beach is $422,603, which is still an all-time high for the past ten years. A majority of this price increase has occurred over the past two years. As with the rest of the country, the demand for homes was much greater than the supply, causing these massive value increases.
However, in recent months, the area has begun to see an increase in inventory. This is likely due to a combination of rising interest rates, soaring inflation, and exorbitant home prices. As the demand for houses finally begins to slow down, prices will start to equalize.
That being said, it’s unlikely that prices will start to fall in the other direction. While inventory is increasing, the months supply of inventory of single-family homes was still 2.3 in June. While that may be quite a difference from the 1.4 months in April, it still indicates that the market is heavily favoring sellers. As a result, home prices in West Palm Beach will likely continue to rise, but at a slower rate than we’ve seen in the past two years.
The good news is that there are many factors playing in favor of a strong real estate market in South Florida. With the increased availability of working from home, people are relocating around the country at record rates. South Florida offers potential residents a high quality of life, strong job market, diverse population, and tax rates much lower than other metropolitan areas in the country.
In fact, the Florida Chamber of Commerce expects the state to receive an influx of up to 6 million people by 2030, with a considerable majority headed for South Florida. The population of Palm Beach County could expand to 1.6 million, putting continued pressure on the housing market. Rising demand tends to correlate with higher prices, so this increase in population should encourage home prices to stay high.
For some expert guidance navigating the West Palm Beach market, contact Megan Gribble Home.
South Florida Real Estate Trends
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