Palm Beach County Real Estate Outlook 2018
2018 promises to be an excellent year to buy a new home in Palm Beach County. 2017 was good for Palm Beach County real estate, where real estate sales were slowed due to Hurricane Irma, but sales have rebounded. The Realtors Association of the Palm Beaches, reports home prices have continued their upward trend with the median price for single family homes in Palm Beach Country increasing 8 percent since 2016 to $345,000 and closings up 2 percent as well.
The 2017 real estate market was characterized by a shortage of inventory and increasing home prices yet with a robust economy fueling job growth 2018 residential real estate is positioned for continued growth. With over 30,000 people relocating to Florida every month, 2018 should continue the trend of strong residential real estate sales. With our beautiful beaches, semi-tropical weather, and tax advantages, Palm Beach County will continue to be a very popular choice to live and invest in.
The real estate market should continue to be affected by the lack of inventory. This causes potential sellers not list until they have found a new home to buy, and if they can’t find somewhere to buy, they won’t list, adding to the shortage of inventory.
The combination of projected moderately higher mortgage rates and the enactment of tax reform legislation could potentially affect real estate prices. Many home buyers in Palm Beach County are from the Northeast and the forecast for the impact of the new tax plan is varied so the impact on housing prices remains to be determined and could impact the housing market.
The Palm Beach Housing market is varied. Expensive beach front mansions and more affordable homes as you move west. A recent trend, the building of luxury apartments in downtown Boca Raton, Delray Beach and West Palm Beach, allowing people to live without a car will continue in 2018.
Palm Beach has seen growth in its facilities and attractions as well, with new restaurants appearing in almost every neighborhood including spots that appeal to luxurious tastes and seekers of cutting-edge trends as well as more down-to-earth diners and, of course, plenty of shopping opportunities. Palm Beach County truly has something for everyone.
Palm Beach County is very large, it includes multi-million dollar mansions on the beautiful Atlantic Ocean beaches to the rural farming communities that abut Lake Okeechobee, Belle Glade and Pahokee. Palm Beach County covers 1,971 square miles, larger than either Delaware or Rhode Island. The county’s northernmost point is part of Tequesta, and its southernmost point is Boca Raton a driving distance of approximately 50 miles. The Atlantic shoreline stretches along 45 miles of it, with beautiful public beaches all along the way. Homes along the IntraCostal waterway are prized with their stunning views and access to boating, additionally there are many homes lining the canals leading to the IntraCostal waterway. The western border of the Palm Beach County is the beautiful Everglades, which is preserved against future development but provides myriad recreational opportunities while preserving a vital nature resource.
- Palm Beach County is comprised of numerous towns chief among them are:
- Boca Raton, home to Florida Atlantic University, many gated country club communities, Town Center Mall and Mizner Plaza. The arts are very highly regarded as well: The city’s many well-known and well-funded cultural institutions include the Boca Raton Museum of Art, Boca Raton Children’s Museum, the University Gallery at Florida Atlantic University and the Boca Raton Historical Society Museum. Summer concerts happen at the Centre for Arts in Mizner Park, and residents enjoy performances at the Caldwell Theatre Company and the Boca Ballet Theatre.
- Delray Beach is centered around Atlantic Avenue which is focal point of the Delray cultural scene. Atlantic Avenue offers a wide variety of restaurants, boutiques and stores to choose from. Across from Old School Square, the Pineapple Grove Art District offers art galleries, studios, theaters and museums, and an annual art festival brings creative crowds to the area. Once a jumble of small antiques shops and nondescript storefronts, Pineapple Grove is also home to cafes, restaurants, cool clothing boutiques, Pilates and yoga studios and salons. You can easily find a home near all of these amenities: Upscale condominiums small homes, cottages, townhomes and condo buildings draw residents who love the lifestyle of being steps from the shops and a short walk to the beach.
- West Palm Beach is home to the county government, Palm Beach international airport and CityPlace. CityPlace is West Palm Beach’s premier shopping, dining and entertainment destination.
As we review the current Palm Beach County real estate market, we can see that quality, well-priced inventory continues to be low and is driving prices upward. We expect the residential real estate inventory to be tight in Palm Beach County in 2018. New home construction continues but not enough to offset the trend towards increased home prices. A tight labor market will mitigate new home construction starts.
With interest rates increasing over last year, they are still historically low overall. This makes for a strong environment for buyers who want to purchase a home in 2018. Digital lending is increasing and a continued trend to streamline the lending process will positively impact home sales.
Historically the tax benefits of no state income and low property taxes, (compared to New York , New Jersey, Connecticut, Pennsylvania and Massachusetts), has made home purchasing in Palm Beach County more attractive it remains to be seen if these conditions are made more alluring by the new tax laws. With no individual income taxes and no estate taxes, people take note of Florida and the financial benefits it offers. Under the new tax plan which goes into effect in 2018, Palm Beach County is going to be even more attractive to people in states like California, New York, and Illinois as under the new tax plan those states will no longer be able to deduct very high state income tax from their federal returns. This is a very big deal and could be a big boost for all Florida listings.
Looking at prices from late 2015 to late 2016 Palm Beach County’s housing market was very strong. The county’s home prices jumped 12 percent, the highest appreciation of any metro area in the country, according to a recent study by Ten-X, an online real estate marketplace based in California.
This increase in home prices comes may be blunted as and many real estate professional have indicated this trend will not continue as home values have risen out of the price range of many families. The biggest price increase has been concentrated in lower price ranges and more desirable neighborhoods.
Palm Beach County’s property prices have increased due to the slow pace of construction of new homes. Hurt by the 2008 crash and a labor shortage homebuilders are putting up relatively few new homes in Palm Beach County. Housing affordability will continue to be a challenge due to the combination of double-digit price increases and the lack of wage growth. Limited inventory has negatively impacted the real estate market and driven home prices higher up. The highly desirable lifestyle available in Palm Beach County continues to draw new home owners and prices increasing in Miami Beach, more international money is being invested in residential real estate in Palm Beach County further tightening the marketplace.
The divide between houses and condos is one important touch point of the housing squeeze in Palm Beach County. The average condo costs about half as much as the average house in Palm Beach County. Another characteristic of the Palm Beach County real estate market is uneven appreciation, there’s strong demand for entry-level homes but not for more expensive properties. Additionally country club communities have seen a drop in prices as fewer home buyers are willing to pay the membership costs and fees. There also seems to be a trend in the higher price ranges, demand seems to fall off. According to one Palm Beach County realtor it is very important if you home is prices in half a million dollar price range that you had better price appropriately or you home will linger on the market. Too often it appears that sellers’ asking prices are inflated and not realistic.
Appreciation varies by location, too. Over fifty five year old, senior communities are languishing, but hot neighborhoods such as West Palm Beach’s South of Southern area have seen big price jumps. In this area they have had large price growth and perhaps are at their limit.
Mortgage rates are an important factor for the housing market and continue to drive home buying as they are very low and while they may increase, still offer very attractive terms and should not be a barrier to people looking to buy homes in Palm Beach County.
Some experts anticipate that home prices will appreciate at a more normal rate of between 2 to 4 percent. However, they caution the impact of the new tax laws has not be felt, so this could be a wild card and affects prices and demand either up or down.