Home Prices in Palm Beach County Florida Drop Again, This Time 12%

by Florida's #1 Mortgage Planner on July 25, 2008

South Florida’s housing slump is now in its thirtieth month, with home prices continuing to fall.  Palm Beach County’s median price for existing homes dropped 12% from $377,900 to $334,300 while sales dropped 3%.

There are signs of hope, though.  Both sales and prices rose from May, signaling that we may have reached the bottom of the market, just as I predicted.

The struggles going forward that could prevent the return of Palm Beach County’s housing market will be plentiful.  The struggling economy, increased costs for gas and food, not to mention tightened lending guidelines could prevent prospective home buyers from entering the market.

The bottom line is that is a home buyer will only purchase when they are comfortable with their jobs and the affordability of the home.  One of the best things this housing crisis is bringing forward is that home buyers are not going to buy too much home anymore.

One interesting fact is that condo sales jumped 9% in Palm Beach County.  That marked the third month in a row with yearly sales increases, but prices have plummeted 24% in the process.

One of the reasons buyers are entering the market is their ability to get good deals by scooping up rampant foreclosures on homes and condos.  Additionally, short sales, those transactions which lenders take less than what is owed on the mortgages and forgive part or all of the remaining debt, have also allowed more buyers great opportunities and reason enough to start buying again.

One of the good provisions in the upcoming housing bill is the $7,500 tax credit for first time home buyers.  This provision will be a big benefit to those whom have never owned a home and will certainly be a big incentive to get started.

At this point, it sucks to be an individual seller because you just cannot compete with the banks and lenders.  Most sellers are struggling to break free of their homes because they just cannot afford to drop their selling prices a slow as lenders are willing to go.  Even with some creative seller incentives, they are still struggling to get that needed sale.

Where will Palm Beach County’s housing market go from here?  I still think this summer is the bottom and things will get better, but only time will tell for sure.  If you are looking to purchase a home, or even looking to refinance your home, please contact me to see your best options.

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