Fourth straight decline is worry some
OK I admit it. I am a bit befuddled. We just updated actual home sales and they were up. They have been up almost every month since March. Not quite across the board up, but almost, with sales increasing over 75% in that 6 month span. Today it is time to update our Jupiter area pending home sales and for the 4th straight month they are down. And down rather significantly. Down almost 12% from where we were a month ago. Down over 23% from where we sat 4 months ago. But single family home sales are at record highs. I am befuddled.
Jupiter pending home sales should be a leading indicator of sales volumes 30 to 60 days into the future. How can we almost be setting new 12 month record lows in Jupiter pending home sales all the while hitting new all time record single family home sales. Condos and town homes are part of the answer as they have falling, not climbing, sales numbers. But there is no way this is going to continue. Single family home sales have to drop. Today's Jupiter pending home sales figures confirms it. Take it to the bank; sales are going to sputter for the next few months. They simply have to.
The question is why the sputter? Is it demand or is it supply? From what we see on the front lines throughout south Florida this is a supply issue. There simply aren't enough quality well priced homes to buy in all price ranges. This week we said good bye to a client who was in town hoping to find a home; a significant home with a budget up to $1M. They returned home after seeing some good opportunities but very limited in number. A couple were new construction for which they did not want to wait. So they went home disappointed. This week we also secured a home for a client with clearly defined goals that we have been watching for the right opportunity to arrive. We finally found it and ever mind that it took 7 months. Supply of what they were looking for just didn't exist. From my eyes demand isn't the issue; supply is the main reason we are seeing Jupiter pending home sales drop.
The next few months are going to help paint the picture. If prices stay steady or continue moving higher I will keep saying supply is the problem. We saw a slight decline in prices this month and if those drops continue there is no doubt that demand is also to blame. Time will tell.