Palm Beach home sale prices increase in February with average price topping $1 million

Palm Beach County home sellers kept the upper hand in February with a dearth of inventory helping to boost sale prices 12% higher than the same time last year, but the playing field is inching toward balance.

A report released March 21 by the Broward, Palm Beaches and St. Lucie Realtors group found the median sales price of an existing single-family home last month was $615,000. That’s above the $549,500 buyers were paying in February 2023, and not far from the record high of $625,000 set in June 2023.

At the same time, there was a 4.4 months’ supply of homes available to buy, which is 33% higher than last year.

A balanced market, where neither the buyer or seller has the advantage, is considered a 5.5 to six months' supply.

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The average sale price on an existing Palm Beach County single-family home in February was $1.03 million. That's a 13% jump from the previous year and at least the 12th time since early 2021 that monthly reports noted average prices topping $1 million.

Realtors prefer to use the median price as a measuring stick because it is the midpoint where half of the properties sell for less and half for more. It isn't as easily skewed as the average price.

John Sholar, a Reator with Keyes Co., said even though sellers may still have an advantage, they are more amenable to listing their homes at reasonable prices instead of aiming for pandemic boomtime rates.

A January open house for a home listed at $425,000 west of Dixie Highway and off Antique Row in West Palm Beach attracted 52 potential buyers. Sholar got seven offers, and eventually sold the home for the asking price.

“It’s busy,” he said. “Last year, everyone was just waiting to see what was going to happen with interest rates, but I do feel like now, especially people with money, are pulling the trigger.”

The interest rate on a fixed 30-year mortgage was 6.74% in mid-March, according to Freddie Mac. That’s down from a recent October spike of 7.79%, but higher than the 4.16% in mid-March 2022.

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On Wednesday, the Federal Reserve made no changes to its key interest rate and stuck to its prediction of three rate cuts before the end of the year. That’s despite stubborn inflation that is closer to 3% than the Fed’s goal of 2%.

Still, mortgage interest rates are unlikely to return to the bargain-basement prices seen in 2020 and 2021.

Lawrence Yun, chief economist at the National Association of Realtors, told USA Today that homebuyers need to “recognize the new normal.”

“Consumers who may be looking for (rates of) 3%, 4%, I don’t think it’s going to happen, or even 5%,” Yun said.

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Florida Atlantic University housing economist Ken H. Johnson said housing prices should not be increasing as much as they are in Palm Beach County with 6% interest rates.

He’s concerned there are too many restrictions that reduce the number of homes available to buy or lease, such as short-term rentals, homeowner association rules that limit renting and a slow rate of new home construction.

“I’m very worried our price is going up too fast,” Johnson said. “Our market has these weird signals where prices should be calming but, in fact, they are not, and that’s disturbing.”

Statewide, the median sale price for an existing single-family home last month was $415,00, which is a 5% increase from the same time in 2023.

The supply of homes statewide for sale stood at 3.9 months in February, a 44% increase from the previous year.

Florida Realtors Chief Economist Brad O’Connor called the statewide increase in inventory of homes for sale a “remarkable turnaround” from last year.

“It will take a lot more inventory to put a significant dent in home prices,” O’Connor said. “But at current levels, inventory is now high enough that it should continue to slow home price growth and present buyers with a lot more options than they had two or three years ago.”

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. 

This article originally appeared on Palm Beach Post: Palm Beach County sees increase in single-family home prices in February