I have been spending some time examining the Boca Raton real estate market and the underlying statistics of what is happening in our area. I think it's important to discuss the market in terms of price bands, as we have a wide range of inventory and price ranges in our local market. As an example, I have analyzed the current situation for single family homes in Boca Raton, in various price ranges. Check out this chart below:
What is most interesting to me is that the number of months of inventory for homes priced between $750,000 and $999,999 is a whopping 92 months! Only two homes in this price range sold in February 2010 out of 193 listings! Not that it's so great for homes over a million, but they are actually faring better, with 45 months supply. Obviously the lower price ranges are doing the best with only 9 months of inventory for homes under $300,000.
I have my theories to explain these numbers:
- The low end for single family homes under $300,000 is doing well (relatively) because of the low interest rates and the homebuyer's tax credit which is set to expire on April 30. Many renters are now finding it cheaper to own than to rent, and there are an abundance of short sales in this price range which have driven prices very low.
- The $500,000 to $1,000,000 range is more challenging because even though the interest rates are low, most buyers in this category are still dependent upon a mortgage and even if they have the required 20% down payement this price range is going into jumbo loan territory. The interest rates are higher for jumbos and also the loans are much more difficult to qualify for. No longer are we in the days of "stated income" or "no doc" loans, people actually have to prove that they can afford these mortgages now!
- In the over $1,000,000 range, although there is more than three years of inventory if sales continue at the current rate, many of the buyers in this range do pay cash for their properties and as we all know, "cash is king" and although there are fewer buyers in this range, there are some amazing deals.
I will delve further into the market in my upcoming blog posts, it is very interesting to really see what is happening and to try to draw some intelligent conclusions as a result. If you are a seller in the $750,000- $1,000,000 range it will be extremely important to price your property LOW in relation to the competition since so little is selling, and also to stage it and have it marketed thoroughly and properly. Please call me about SELLING YOUR BOCA RATON REAL ESTATE so I can consult with you about how best to proceed.
Gloria Singer is the Broker of Boca Expert Realty, a boutique Boca Raton real estate company with a focus on professional service and an unparalleled customer experience. Our select agents are amongst the top performing professionals in the field. Visit www.BocaExpert.com for information on Boca Raton, Delray Beach and Highland Beach real estate and to connect with an expert in the local market.