While the pace of home sales in Boca Raton may have slowed down from the first quarter of the year, the median prices of homes in Boca remain in the $345,000 range and continue to climb slowly. The average listing price has moved up to $740,000 from $620,000 a year ago.
That pace may be slowing down as mortgage rates start rising. Today, for example, rates are at a 4.3% APR, which is up a point from the 3.3% we were seeing just a few short months ago in May. Mortgage applications, according to the Mortgage Bankers Association have decreased by just over 15% since May, which is when the fixed rate mortgage rage began to increase.
Inventory still down a third from a year ago
However, because the current number of listings of Boca Raton homes on the market is still close to 33% less that it was a year ago at this time, that lack of inventory continues to shore up Boca home prices.
The rest of Palm Beach County is keeping pace with these increases. The median price of a home in Palm Beach County was almost $250,000, up 17% from a year ago. The good news for Palm Beach County home buyers is that the median price increase of only $1,000 from July indicates a moderating growth rate for prices.
Home prices slowing slightly all over U.S.
The fact that home prices in Boca Raton and the rest of the county are moderating is likely to help first time home buyers. During the course of the last year, investors with cash had purchased up to 66% of the inventory, which left new home buyers with mortgages on the sidelines.
The rest of the nation is also watching home prices slow their pace. According to the Standard and Poors Case-Shiller Index in the 20 cities in which they track home prices, the average rise in July was only 0.6.
That is the slowest pace of home price increases since September 2012. While it’s too early to say whether home prices have peaked, it appears that their rapid increase has slowed.
Slight uptick in inventory, but still a seller’s market
As the prices of home moderate and investors see smaller returns, they tend to retreat from the market. This leaves a larger selection of homes for buyers with mortgages. Also, as prices have risen, more Boca homeowners are willing to place their properties up for sale.
However, while there are more home for sale at this time than last year, that increase is a miniscule 4%. As a result, for the foreseeable future, we remain in a pronounced seller’s market.
Marc Jablon, The Jablon Team
Re/Max Complete Solutions