Posted on by Chris Losquadro

Real Estate Market Update for October 2019

Due to a combination of low interest rates, low unemployment and increasing wages, the real estate market continues to show strong buyer demand and consistent price growth.  On a nationwide basis as well as within Palm Beach County, foreclosures and other distressed properties continue to decline indicating a strong and healthy real estate market.

Commercial Real Estate

The national commercial real estate market also remains strong with low vacancy rates, increasing rent growth and declining capitalization rates.  According to Real Capital Analytics, cap rates averaged 6.1% in July and August 2019 (properties above $2.5 million).

The National Association of Realtors just published their COMMERCIAL REAL ESTATE TRENDS & OUTLOOK report for the third quarter 2019.  The report highlights were as follows:

  • Going in cap rates on commercial properties continue to trend downwards with the lowest being 5.9% for multifamily and 6.5% for industrial-warehouse.
  • Commercial transactions are up modestly from one year ago: Development (4%), Sales (3%) & Leasing (2%).
  • 48% of respondents indicated that they expect business conditions to improve in the next 12 months.
  • Multifamily communities continue to attract developers and investors due to tight rental conditions (national vacancy rate as of the second quarter 2019 was reported to be 6.8%).

CLICK HERE to find a FREE copy of the COMMERCIAL REAL ESTATE TRENDS & OUTLOOK.

 

Palm Beach County – Featured Commercial Real Estate Transactions

  • Financial Center at the Gardens, Palm Beach Gardens – sold in July 2019 for $71,800,000
  • Centurion Owner, West Palm Beach – sold in October 2019 for $32,500,000
  • Lake Worth Medical Center, Lake Worth – sold in September 2019 for $12,610,000 (reported to have sold at a 7.2% cap rate)
  • Cortland Apartments, Boca Raton – sold in July 2019 for $120,835,000 or $314,674 per unit.
  • 1440 W. Indiantown Road, Jupiter – sold in December 2018 for $40,800,000 or $218 per square foot (reported to have sold at a 7.1% cap rate)
  • The Gardens Mall, Palm Beach Gardens – sold in April 2019 for $219,075,000 or $481 per square foot.
  • The Pointe at Wellington Green, Wellington – sold in February 2019 for $43,000,000 or $400 per square foot (reported to have sold at a 6.8% cap rate).

 

Residential Real Estate

As of the end of the third quarter (September) 2019, existing nationwide home sales that include single-family homes, condominiums, townhomes and co-ops fell 2.2% from the prior month.  However, overall home sales were reported to have increased by 3.9% from the same period in 2018.  

Median prices for existing homes were up by 5.9% to $272,100 which was an increase from the September 2018 amount of $256,900.  Home prices rose in all regions and the September price increase furthers the trend of year-over-year price gains at 91 straight months.  Overall inventory level was reported to be 1.83 million units which is a 2.7% decrease from the same period in 2018.

Palm Beach County Residential Real Estate

During the month of September 2019 single family homes sales in Palm Beach County were fairly strong.  Based on year-over-year numbers, the amount of closed sales rose by 10.5% with the overall dollar volume increasing by more than 30% to $773,700,000.  Year-to-date sales of single family homes are fairly consistent with the same period in 2018, down slightly at 0.8%. 

The median sale price increased by 2.9% to $355,000 with the average sale price growing by more than 18 to $570,599.   Pending sales were relatively consist with prior year levels within 1% on a year-over-year and a yearto-date basis.

Year-over-year closed sale transactions over $1,000,000 or more were up by 46.5%.  One-million plus properties are becoming more and more apparent as this category represents a greater number of active listings than any other category at this time.

 

During the same period sales of townhomes and condominium numbers declined 5.6% but the median sale price increased 7.7% to $188,500.

Individual Housing Markets within Palm Beach County

  • Boca Raton: Single-family home sales are down 3.1% year-to-date with the median price up by 2.7% to $459,000.
  • Jupiter: Single-family home sales are up 4.8% year-to-date with the median price up by 2.1% to $525,000.
  • Palm Beach Gardens: Single-family home sales are down 0.1% year-to-date with the median price up by 3.3% to $505,000.
  • West Palm Beach Gardens: Single-family home sales are down 8.5% year-to-date with the median price up by 0.3% to $300,000.  

With the current lack of inventory on the market coupled with historically low interest rates, it is anticipated that we will continue to see an increase in process appreciation across all residential home categories.  However, overall sales are expected to be lower than normal.

To learn more about the current state of the housing market in Palm Beach County, please click on the image below.

 

Why choose Chris and Amy Losquadro to be your trusted real estate advisor?

There are approximately 30,000 licensed Realtors® in the greater Palm Beach County area so there is a considerable number of agents to choose from.

Reasons to choose Chris & Amy to be on your team:

  • Complete Professionalism: Chris and Amy are considerable more than just a “Realtor”.  We operate as a trusted “advisor” like your attorney, accountant or investment manager; always doing what’s in the best interest of our clients.  Some of our best deals are those in which we advised are clients NOT to proceed with the transaction.
  • Extraordinary Experience: Since 1998 we have successfully completed over $400,000,000 in real estate transactions and provided advisory services on over one billion dollars of real estate properties.
  • Personal Service: There is a trend in real estate with “Mega Teams” of agents which typically have between 5 to 50 agents who may interact with the client.  When using our services you have a single point of contact to ensure proper communication as develop a quality relationship of trust and confidence. 
  • Detail Orientation: There are more than 100 steps in a typical real estate transaction and we are there to handle every single one on behalf of our clients. 
  • Negotiation: We treat our clients money like it is our own and provide honest feedback on how the property is being received by the market.  From 2012 to the end of the second quarter 2019, we have precise data on a specific set of transactions where independent appraisals were ordered in advance of the listing to determine value. Of these 340+ transactions, the sale price that Chris and Amy achieved for their client averaged 104.9% of the appraisal value.  Unlike Chris and Amy, very few real estate professionals can substantiate their claim when saying they get more for their clients.

Before your clients, colleagues, and friends get started with any real estate transaction, have them call Chris or Amy.  No matter what the situation, the type of property, its price point, or where its located, we will make sure they are making the right decisions and are being properly advised.  Contact either Chris or Amy Losquadro today at 561.584.8555 or via email at info@quantumcos.com.