There appears to be some difference of opinion amongst the experts as to where the South Florida housing market is headed – and when it will get there. While there are numerous tools that are being employed by the various pundits to try and create accurate predictions, the resulting information is often contradictory. This is largely due to the unusually ‘localized’ nature of the market here. As invested residents in the housing market, we ask ourselves, are the prices of homes in Jupiter and the homes in Palm Beach Gardens improving? This article will address the housing scene in Northern Palm Beach County, as that is where our expertise lies.
Probably the best way to begin this article is to provide some examples. The first is a quiet Jupiter Abacoa neighborhood, where we recently sold a modest 2 bedroom condo unit with an attached garage. This home was purchased new in 2004 for $188,780. At the peak of the market in late 2007, comparable units were selling around $275,000. In late 2009, the unit was put on the market as a short sale for $169,000. An offer of $160,000 was submitted to the owner, which was subsequently approved by the bank. The buyer, however, backed out of the deal due to financing problems. Prices in the area continued to fall and, in an effort to sell the property, the seller lowered their asking price to $149,000, which was consistent with the other homes in the area. An offer came in for $140,000, but this time the bank countered with $155,000, an amount that was rejected by the 2nd buyer. In early July, another offer was received on the property for $155,000 (on an asking price of $155,000), which was expected to be accepted by the bank.
The second example is in a slightly more urban townhome community in Palm Beach Gardens. This Palm Beach Gardens home we sold in April of 2010 as a short sale for $245,000 was purchased new in January 2007 for $435,000. By the time the bank approved the sale price 2 months later (which they, too, had previously approved at that price on an earlier offer that had fallen through), homes in the area were selling anywhere from the low $200′s (foreclosure price) and climbing close to $300,000. Even with new short sales coming on to the market in this community, prices in this community continue to be strong.
There are, of course, many factors (location, amenities, unit sizes, price range, and schools to name a few) that affect the market values of homes. One that is somewhat unique to this area, however, is HOA fees. While there are notable differences in how the market value of homes in Jupiter and homes in Palm Beach Gardens are affected by HOA fees, there does appear to be a pattern. Many communities are experiencing the higher fees due to deadbeat homeowners (especially those looking at short sale and foreclosure). Newer communities are dealing with high debt service as well, due to mortgages on property that has been turned over by the community’s developer. Either way, some of these fees have grown by 50% or more. As you might imagine, this can be a real deterrent for a new home buyer.
So what does this tell us about the market? Buyers are looking for value – and the most home they can get for their dollar. HOA fees cut into what they can apply to a house payment so; ultimately, it limits how much they can spend on a home. Most experts anticipate another wave of short sale and foreclosure activity as the unemployment situation continues and a new wave of adjustable mortgages come due for increases, which can further pressure HOAs. It probably won’t be until we have weathered this final storm that we will see the across-the-board bounce back in housing prices we are all looking forward to.
Learn more about market values of homes in Jupiter and homes in Palm Beach Gardens. Stop by Debbi Shattow’s site where you can search for short sale and foreclosure properties as well as check out all the homes in the Northern Palm Beaches.
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