A Strange Season for the Palm Beach Luxury Market
May 18, 2016
Working with agents gives us the ability to get front line information from the agents we work with, both nationally and locally. This valuable insight, coupled with our own expertise, gives us a better perspective on current market trends. We too are constantly monitoring industry news, looking at real estate marketing initiatives or lack thereof, and checking market statistics.
With that said, it hasn’t gone unnoticed that this season has been very unusual for the Florida market. I have heard agents lamenting that it is like nothing that they’ve experienced. What we typically experience is massive luxury sales from late October to early June, with the bulk of sales occurring January through March. This season has been very different.
There is no shortage of listed properties, but houses are not selling. Last year, in the coveted zip code of 33462 (from Nov 1 to April 30th) there was a total of 18 homes sold with a price of over $1 million. During this period, the highest priced home went for a whopping $22,109,100. When comparing that same time period this year, we discovered that only eight homes in the same zip code had sold. That is a substantial disparity. In fact, none of those sales have hit even the $3 million dollar mark. As of May 7, there were only two pending sales of the 51 active homes in this area priced over $1 million dollars.
So what’s causing this unusual state of affairs? It can be blamed partially on this very wild presidential election. We can all agree with that to some degree, but there is definitely more too it. The election that seems to be mimicking the strange season is only the second or third reason agents are coming up with.
So what is the number one reason? Picky sellers. That’s right. Sellers are demanding prices for their homes that don’t make much sense, and buyers are reluctant at the negotiation table because they feel short changed. Buyers continue to make offers, but since sellers’ demands are unreasonable — the contracts are not materializing. Hopefully, as sellers wise up and realize their homes are still sitting there, we will see a late surge of sales after the traditional season has ended.
Interestingly enough, an unexplainable phenomenon that has also surfaced is that many agents and brokerage firms in the luxury market have stopped marketing. A counterintuitive reaction, of course. So as the market bounces back, they will race to get their names out there — having missed the golden opportunity of anticipating the late market.
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