Palm Beach County home prices hit a new record high ahead of summer real estate slow down

The median cost to buy an existing single-family home in Palm Beach County reached another startling milestone last month, setting a record high despite market headwinds such as pricey insurance and stubborn interest rates.

At $640,000, March’s median sale price was 11% higher than the same time last year and $15,000 more than the previous record set in June 2023.

The new benchmark was outlined in a report by the Broward, Palm Beaches and St. Lucie Realtors Group released Thursday, April 18.

While inventory has been creeping higher, giving buyers more choices, the number of turnkey condition homes in popular areas may be lacking, said Echo Fine Properties President Jeff Lichtenstein.

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That means more competition for the highest-priced homes.

“It’s a little surprising because we are still at a stalemate in the market,” Lichtenstein said about the March sale price. “I think it’s a lack of total inventory and that there aren’t new homes in the prime areas for sale.”

There was a 4.4 months’ supply of existing single-family homes available last month. That’s a 37% increase from the previous year, and close to what was available in the early months of 2020 pre-pandemic.

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

Palm Beach County’s townhome and condominium buyers gained a slight upper hand in March with 6.8 months of inventory available. That’s a whopping 84% increase over the same time last year.

The median sale price on a condominium and townhome still crept up 6% to $330,000, with the average price up less than 1% to $529,646.

The average sale price on an existing Palm Beach County single-family home in March was $1.19 million. That's a 32% jump from the previous year and at least the 13th time since early 2021 that monthly reports noted average prices topping $1 million.

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

The total number of home sales slumped in March by 16% from the previous year to 1,226.

“It’s never going to be as crazy as it was during the pandemic, but we still have an influx of buyers from the Northeast and California,” said Christian Prakas, managing broker of Serhant in Delray Beach. “I just sold a Lighthouse Point home to a California buyer who said he was tired of the homeless situation and high taxes.”

Part of what’s holding back more inventory from hitting the market is the higher mortgage interest rates. Sellers may be reluctant to put their home on the market if it means giving up the lower rate they secured in the 2% to 4% range.

As of April 11, the interest rate on a 30-year fixed-rate mortgage was 6.88%, according to Freddie Mac. That’s down from a high of nearly 8% in October, but far from the 3% rate in April 2021.

Bankrate, which surveys the country’s largest lenders, said mortgage interest rates for a 30-year fixed loan hit 7.3% this week.

And they may not see a deep reduction anytime soon.

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In an April 16 meeting at the Wilson Center, a nonpartisan think tank, Federal Reserve Chairman Jerome Powell said while inflation had come down, it was still running higher than the goal of 2%. Year-over-year inflation rose to 3.5% in March, up from 3.2% in February.

“Recent data have clearly not given us greater confidence,” Powell said at the discussion as quoted by the Associated Press.

At the same time, if mortgage interest rates go down, there will be more competition in the market.

“That will drive up the prices,” Lichtenstein said. “We’ve had people holding. If they wait for lower rates, it will mean more buyers.”

Florida homeowners also grapple with high insurance costs. Sunshine State homeowners pay an average property insurance premium of $6,000, which is more than triple the nationwide average, according to the Insurance Information Institute.

Statewide, the median sales price for an existing single-family home in March was $420,600, a 3.9% increase from 2023. Median prices for condominiums and townhomes were up 3.1% from last year to $330,000.

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. Help support our local journalism, subscribe today.

This article originally appeared on Palm Beach Post: Home prices in Palm Beach County and West Palm Beach continue to climb