Palm Beach County, Florida Real Estate and Housing Market Trends and Forecasts
January 1, 2023
5 min read
With irresistible beaches, miles of coastline and affordable housing, it’s no surprise that Palm Beach County, Florida is a sought-after area to live. This demand for homes has helped the housing market in Palm Beach remain strong and this is expected to continue for the foreseeable future. Purchasing a home right now provides a wonderful financial opportunity for your clients and their families.
And thanks to MBS Highway's Real Estate Report Card, you can show your clients the opportunity they have and the strength of the market – right in their specific county or zip code. Let's break this powerful tool down, so you can see how you can use it to help your clients move forward with a home purchase and to gain valuable referral relationships.
Homes Remain Affordable; Appreciation Forecasts Strong
Taking a deeper look in the area, we can see that homes are still affordable, with strong historical and forecasted appreciation rates.
The median home price in Palm Beach County is $368,671. We have really strong appreciation with the 10-year historical appreciation rate at 5.19%, while the forecasted 1-year and 5-year cumulative appreciation rates are 6.16% and a very healthy 23.43% respectively!
We know these rates of appreciation are strong, but to really drive this point home to your clients, it's important to explain what this means to them. Purchasing that $368,671 home today, given the forecasted appreciation rate of 23.43% over the next 5 years, means that buyer will gain $86,395 in appreciation alone! Being able to clearly and visually demonstrate this tangible gain for potential clients so they are spurred to act now can certainly help you increase your production and build valued referral relationships.
If you have customers that wonder if they can afford a home in this area, you can use the Real Estate Report Card to show them that affordability is very strong in this market, as evidenced by the Affordability Index of 122.7. This means that a family earning the median household income for Palm Beach County of $70,364, which is well above the national average of $55,909, can afford 122.7% of the median home price when putting 20% down.
Of course, not everyone is putting 20% down, but you can see how this information gives homebuyers a good gauge of what they can afford, helping you build your pipeline and build relationships with both new and trusted referral sources.
We can see that there are just ten homes available for every 1,000 people in Palm Beach County. Inventory is down 14% year over year and 2% month over month.
It's crucial to explain to hesitant clients that inventory challenges are likely to remain and it's probably not going to get easier to purchase a home in the foreseeable future. Here's why…
Based on our demographics, there are currently 173,530 people who are between 27-35 years old. This number is important because those in this age range are first-time homebuyers, and our goal is to see what kind of business we can gain from this demographic and how we can help them benefit through homeownership.
Out of these nearly 174,000 people, almost 16,500 of them will either rent or purchase a home in the next year. And out of these 16,500 household formations, considering that Palm Beach County has a healthy 63% homeownership rate, around 10,440 will purchase a home.
To meet this demand, builders would have to build 10,440 homes each year, or this amount of homes would have to become available for sale. Yet the actual number of homes being built is half this amount, at nearly 5,200.
This inventory and demographic data combined provides such an easy way to express to potential clients why they shouldn't delay their purchase, which again can help you increase production and gain the trust of key referral sources.
The bottom line is we have an inventory shortage, and this is a big reason as to why now is such a good time to purchase a home before it becomes even harder if inventory tightens even more or rates move higher due to rising inflation or other reasons. Plus, there's also the strong forecasted appreciation rates as discussed above and the fact that homes are selling fast.
Job Market Strong Overall
We've seen steady job growth in Palm Beach County over the past few years. Last year was a different story due to the pandemic, as it was across the country, but we already see job growth coming back strong and anticipate that strength to continue.
The current unemployment rate is at 7.54% in Palm Beach County. While this is higher than the national average of 6.1%, we expect to see the unemployment rate decreasing further as the economy continues to reopen.
A strong job market is another reason the housing market is expected to remain strong in the Palm Beach County area, as people are more inclined to purchase a home when they feel secure in their job. The opposite is also true.
MBS Highway’s Real Estate Report Card is just one of the many tools in MBS Highway that can be the crucial differentiator in turning prospects into buyers who have won their dream home – and turning originators into advisors their clients trust. With an MBS Highway membership, you'll have access to all of our tools, including Bid Over Asking Price, Buy vs. Rent Comparison, Loan Comparison tools, daily coaching videos, lock alerts and much more.
Do you want analysis like this on a daily basis? Try all of these tools for free with a 14-day trial and see for yourself the kind of difference they make in your business!