Much to the surprise of everyone, prices of homes in Boca Raton and the rest of South Florida appear to have gone up. Please see attched grapg from City-Data.
Last year’s median price in Palm Beach County was $195,000. Currently, as of March, it has risen to $225,000, according to figures from the website, Realtor.com. This marks an almost 15% price increase over last year’s prices.
What has brought about this relatively recent rise in prices is the sudden drop of more than 35% in the number of single family properties that are for sale. On top of that, because so many people are underwater on their homes, large numbers of homeowners in Boca Raton have opted out of the home sales market and have decided to remain in their homes either until the economy improves or until they are carried out feet first.
Higher list prices may not mean higher selling prices.
However, the fact that asking prices are up does not mean selling prices are rising. What happens to house prices is that heightened expectations occur when Boca homes sell nearby.
If that Boca Raton neighborhood has had three or four homes for sale and they suddenly sell, the remaining homeowner perceives that his home now has more value based on simple supply and demand. So he or she asks for a price that is 10-15% higher than the last, highest price sale.
However, unless that home is in perfect condition and is larger or has more amenities that the past sales, it is still likely to sell at a price very close to the strongest comparable sale (comp) within the last 90 days.
Mortgages are based on recent comparable sales.
That is because banks appraise homes based on recent selling prices. If the buyer is coming in with a mortgage to purchase that Boca Raton home, the bank will not lend an amount that is significantly different that the last comparable sale. (For mortgage information, go to http://www.PrestonWare.com)
So, unless you have a buyer who loves your house more than life itself, who is paying cash, and whose Boca Raton realtor has never looked at a comp, you will need to price according to current market values. And if you do, your home will sell fairly quickly.
Selling price statistics are up across the nation.
While a number of industry observers believe that the Boca Raton housing market has finally bottomed out, the plethora of REOs that are due on the market may put that theory in jeopardy. Nonetheless, across the nation, statistics point to a 6% median price rise since last year, and in neighboring Broward County, home sellers noted an 8% increase over last year’s median price of $168,000.
Marc Jablon, The Jablon Team
RE/MAX Complete Solutions