Rising home prices, low inventory and sluggish sales are all part of the story told in the February 2016 market statistics released by Florida Realtors this week.
In February in Palm Beach County, for example, “dollar volume for Palm Beach County home sales totaled $627.4 million– that’s a 16.6 percent increase year-over-year,” said Judy Ramella, president of the Realtors Association of the Palm Beaches, in a press release.
“There was heightened demand for homes between $300,000 and $600,000 and above $1 million.”
Total sales down despite dollar volume boom
However, even though dollar volume increased, total closed sales in February 2016 were down 5.1 percent year-over-year. In February 2015, there were 1,208 closed sales; that dropped to 1,146 in February 2016.
The median sales price did increase 10.5 percent year-over-year from $267,000 to $295,000 — but it doesn’t seem like that increase was a result of more cash buyers looking outside of Miami-Dade.
The monthly report reveals a year-over-year sales decrease of 15.8 percent in single-family homes paid in cash in February 2016– somewhat unexpected, considering the federal order requiring title insurance companies to reveal the identities of certain cash buyers.
Under those rules, buyers paying cash for properties costing $1 million or more — and who are attempting to use a limited liability corporation, or LLC, to purchase the property — would need to disclose their identities.
“The U.S. Department of Treasury is concerned about money laundering abuse in all-cash real estate transactions, but their focus appears to be on Miami-Dade County and Manhattan, not Palm Beach County,” Ramella said in an email. “The majority of our transactions involve financing, and the identities of our buyers are well-documented.”
She added that there is “generally a relationship between cash sales and lower-priced inventory,” but does not expect to see any out-of-the-ordinary increase in cash transactions when March data is available.
The six-month rule is an attempt to crack down on money laundering tactics, according to the government; New York City was the only other metro area targeted besides Miami-Dade County.
The data don’t encompass Miami-Dade, but it stands to reason that some buyers who wish to live in the area and who desire to use an LLC without scrutiny might look in nearby surrounding counties. This doesn’t seem to be the case, though — at least, not in February.
As Ramella stated, the total dollar volume for homes sold in Palm Beach County increased 16.6 percent.