January 24th, 2012 2:21 PM by Sherry Lee
Posted: 11:21 a.m. Friday, Jan. 20, 2012
A third year of surging home sales in Palm Beach County has buoyed hopes of a market turnaround as 2011 ended with a 24 percent hike in purchases.
And while year-end median prices for existing single-family homes slipped 15 percent to $193,700, Realtors said Friday that low inventory has kicked up bidding wars that may boost prices.
"It's been a long down cycle, but it can't last forever," said Bill Richardson, president of the Realtors Association of the Palm Beaches. "I really do believe we are in a recovery. It won't be meteoric, but there will be a steady climb."
According to the Florida Realtors, which on Friday released total sales numbers for last year and December, 185,921 homes were purchased statewide in 2011, a 9 percent increase from the previous year.
Just two of the 19 regions the Florida Realtors measured saw dips in 2011 home sales, with Fort Myers dropping 7 percent and the Treasure Coast 6 percent.
The median sales price statewide ended the year at $131,700, 3 percent below 2010.
More recently, December prices were up from the previous month, rising 5 percent in Palm Beach County and 3 percent statewide.
"There's a pretty good amount of stabilization and a little increase in pricing," Richardson said.
Nationwide, total sales of existing homes last year were up 1.7 percent from 2010 with 4.26 million purchases, according to a National Association of Realtors report released Friday. December saw a bigger bump, with a 5 percent increase from the previous month.
The national median sales price was $164,500 in December, 2.5 percent below the previous year.
Lawrence Yun, chief economist with the National Association of Realtors, said a positive economic buzz has bolstered sales.
"Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market," Yun said.
The average interest rate on a 30-year conventional fixed-rate mortgage fell to a record low of 3.96 percent in December from 3.99 percent the previous month, according to mortgage backer Freddie Mac. The rate was 4.71 percent in December 2010.
But tighter lending standards have reduced the pool of eligible borrowers. That, combined with a queasy stock market, has led to higher cash deals, said Jon Turla, president of the Florida Association of Mortgage Professionals.
"When you can pick up a property for 30 cents on the dollar, it's a good investment," Turla said.
All-cash sales accounted for 31 percent of home purchases nationally in December, up from 29 percent in 2010.
Investors played a substantial role in December sales nationwide, buying 21 percent of homes sold, about the same as December 2010.
Investor activity also is boosted by an increasingly strong rental market, Richardson said. That may account for the 30 percent jump in Palm Beach County condominium sales last year from 2010 as investors vie for easy rental units. Statewide, condo sales were up 15 percent.
At the same time, the median price for a condominium dropped 14 percent in Palm Beach County to $77,500 and 2 percent statewide to $88,300.
One looming cloud on the real estate horizon is the shadow inventory of foreclosures destined to hit the market after a long slog through the courts. In Palm Beach County, about 34,820 foreclosure cases are pending. Statewide, there's an estimated backlog of 260,815 cases.
With only 5.9 months' worth of single-family home inventory in Palm Beach County - the lowest since 2006 - Realtor Sherry Lee hopes to see some of that shadow inventory soon. Lee, whose Lee Property Sales is based in West Palm Beach, said clients are shocked at today's paltry selection.
"They try to bid on something only to realize that there are multiple offers," Lee said. "I'm looking six times a day for every little new listing."