October sales of existing homes in Palm Beach County jumped 27 percent compared with the same time last year, despite lingering concerns that tighter lending and low appraisals are killing deals.
A report released Monday by the Florida Realtors showed that 918 Palm Beach County single-family homes were purchased in October at a median sale price of $184,900 – 16 percent below last year’s price but 3 percent higher than in September.
Statewide, home sales were up 13 percent last month compared with October 2010. Purchases did slip from September, falling 9 percent statewide and 15 percent in Palm Beach County.
Economists had predicted an overall drop in October purchases following weak numbers on pending home sales.
Instead, Wells Fargo economists said Monday that they were surprised by a 1.4 percent increase nationally in closed deals last month compared with September, and a 13.5 percent hike from last year.
The increase brought the seasonally adjusted annual rate of home sales to 4.97 million in October, according to a Monday report from the National Association of Realtors.
A healthy housing market would have an annual sales pace of about 6 million.
Lawrence Yun, the association’s chief economist, said the market’s recovery has been stubbornly slow and he was not overly impressed by October’s report.
“Home sales have been stuck in a narrow range despite several improving factors that generally lead to higher home sales such as job creation, rising rents and high affordability conditions,” Yun said. “Many people who are attempting to buy homes are thwarted.”
Florida’s unemployment rate was 10.3 percent in October, the lowest since June 2009, according to figures released Friday. Palm Beach County’s jobless rate also fell to 10.3 percent, down from 10.9 percent in September and 11.9 percent in October 2010.
At the same time, the national average rate for a 30-year, conventional, fixed-rate mortgage fell to 4.07 percent in October from September’s 4.11 percent.
Low appraisals are blocking some home sales, Yun said.
Bill Richardson, president of the Realtors Association of the Palm Beaches, said one of his sales could be in jeopardy after a Monday appraisal on a Boca Raton home came in $10,000 under the contracted price.
“Lenders are being extremely conservative on appraisals, and we are continuing to see values come in low,” Richardson said. “If there is anything that is keeping prices down, it’s that.”
Discounted purchases of foreclosures and short sales also contribute to lower prices.
In October, distressed sales accounted for 28 percent of purchases nationwide, down from 30 percent in September and 34 percent in October 2010.
First-time homebuyers made up 34 percent of transactions nationally last month, up from 32 percent in September.
But Palm Beach County Realtors said investors and foreign buyers are propping up local sales with homes they rehabilitate and rent out.
“The cash flow is great for them,” said Juan Restrepo, president of the West Palm Beach-based Florida Real Estate Investors Association. “We’re dealing strictly with cash buyers.”
About 29 percent of October’s sales nationally were cash deals, virtually unchanged from the previous month and last year.
One of Restrepo’s Australian clients is in town this month ready to buy $1 million worth of homes. During his last visit, he picked up eight.
“They are amazed at the amount of property you get because a lot of their stuff is zero lot lines,” Restrepo said. “With the weak dollar, they are loving it.”