Home sales up 36 percent in Palm Beach County, 46 percent on Treasure Coast

The Palm Beach Post
By Kimberly Miller

October was another banner month for home purchases, with sales up 36 percent in Palm Beach County and 46 percent in the Treasure Coast compared with the same month last year. The increases have become a welcome trend this fall in Florida and nationally as first-time home buyers hurried to earn a tax credit worth up to $8,000, which was scheduled to expire Nov. 30.

Florida's single-family home sales rose 45 percent compared with October 2008, according to a report released Monday by the Florida Realtors. The report also showed an 82 percent increase statewide in the sales of existing condos.The Sunshine State's gains were reflected nationally, as sales of single-family homes, townhouses and condominiums surged 23.5 percent last month over October 2008. The numbers were reported in a National Association of Realtors survey, also released Monday.

While the first-time home buyer tax incentive is credited with spurring much of the real estate activity this fall, some local agents say they see new buyers emerging as snowbirds and people close to retirement finally see an opportunity to buy in South Florida.

Palm Beach County's median sales price for single-family homes in October dropped to $243,900, an 8 percent decrease from last year. Treasure Coast median home prices fell 18 percent to $110,400.Consider that in October 2005, Palm Beach County's median sales price was $416,500 and the Treasure Coast's was $263,500.

"You're getting people who plan to come down in two to three years and see that now is the time to buy," said Boynton Beach Realtor Gilda Karas, who specializes in 55-plus communities at Keyes real estate. "No one has a crystal ball, but inventory is down drastically from two years ago and I feel like in these communities, things have bottomed out and leveled off."

On Friday, sales opened for model homes and new lots in the active-adult communities of Valencia Pointe and Valencia Reserve, both west of Boynton Beach. The sale attracted a handful of buyers willing to wait in line all week to nab their dream homes. By the end of the weekend, 21 Valencia homes had been sold at an average price of about $500,000.

"In this market, that's really, really impressive," said Marcie DePlaza, division president for Valencia developer GL Homes.

It's unclear how the extension and expansion of the home buyer tax credit will affect snowbirds and retirees, many of whom probably exceed the income limits to cash in on the incentive. The new law includes a tax credit of up to $6,500 for homeowners who have been in their homes at least five consecutive years during the past eight years. Married couples earning no more than $225,000 and individuals earning no more than $125,000 are eligible for the tax credit.

Buyers must have a contract on a home by April 30.Analysts said Monday that home sales may take a dip in December and January, but the deadline extension should keep up sales momentum at least through the spring. Historically low interest rates also are boosting the market.

According to Freddie Mac, an average 30-year conventional fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September. In October 2008, the average interest rate was 6.2 percent.

Still, Coldwell Banker Realtor Renee Shine of Boca Raton said she has buyers who think prices will continue to fall."I have four or five snowbirds right now and I really feel like a lot of them are still chasing that bottom," said Shine, who specializes in older buyers. "I think we're going to see right after Christmas that they may start thinking this is the time to buy."