The Pohrer Report Q2 2022

Page 1

Photographed by Gary Pohrer.
REPORTPOHRERTHE Q2 2022 Inside South Florida’s most exclusive real estate marke t .
home: 124 Brazilian Avenue. Property listed
GARY POHRER | GARYPOHRER.COM | 3 CONTENTS Letter from Gary Pohrer Single Family Homes: All Neighborhoods Single Family Homes: North End Single Family Homes: In-Town Single Family Homes: Estate Section Condos & Townhomes: All Neighborhoods Featured Insights: Additional Data to Track All Things Real Estate In Closing 4 5 9 12 14 16 20 24

Letter From Gary

“Is the market softening?”

This is a question I get on a weekly basis from clients and prospective clients. If only I had a crystal ball and could predict real estate market cycles! Although I cannot provide a definitive answer to that question, I thought it would be helpful to share some of the data and reports that I look at as leading indicators to spot trends in global and local real estate markets.

In this quarter’s report, as with all of our reports, I share actuals from the past quarter. But Q2 2022 actuals do not answer the broader market question that so many of you are eager to uncover. This is because Q2 is a lagging indicator of the market, reflecting transactions that closed in Q2 but actually moved to contract in Q4 2021, Q1 2022, and Q2 2022. We won’t know for certain how the Palm Beach market is being impacted by macro trends such as rising interest rates, stock market upheaval, and other economic shifts until Q4 of this year or even Q1 of next year, because real estate players need time to react to how their pricing and their pocketbooks fit into the big picture. But I think you will find the data and trends I watch helpful in painting a picture of how real estate is being impacted by the rise in interest rates and Federal Reserve balance sheet tightening.

There is a lot to unpack in this quarter’s report, and the most interesting thing I found is that although some leading indicators show softening in real estate globally, Florida — specifically Palm Beach — is holding its ground and impacted to a lesser extent.

I hope you enjoy the read and as always, please don’t hesitate to reach out with any questions.

GARY POHRER | GARYPOHRER.COM | 4
Best ExecutiveGaryregards,PohrerDirector of Luxury Sales Douglas Elliman 340 Royal Poinciana Way M302 Palm Beach, FL 33480 O: 561.655.8600 M: www.garypohrer.comgary.pohrer@elliman.com561.262.0856 • Ranked in the Top 2 for Douglas Elliman agents nationwide 2020 and 2021* • #1 Douglas Elliman realtor in Palm Beach since 2017* GARYABOUTPOHRER BernsteinTammy Sales Associate REPORT CONTRIBUTORS *BY 2020 AND 2021 DOUGLAS ELLIMAN REAL ESTATE SALES VOLUME AND GROSS COMMISSION INCOME. **AS RECOGNIZED BY THE DOUGLAS ELLIMAN ELLIE AWARDS FROM 2017-2021. JohnsonBeth Sales Associate Elizabeth Tristan Sales MarketAssociateInsights Advisor
HOMESFAMILYSINGLE ALL NEIGHBORHOODS

Transaction volume was down -44% year-over-year (YOY)* in Q2, largely driven by the decrease in non-waterfront sales. Waterfront sales YOY held strong with 13 sales in Q2 2022, compared to 14 in Q2 2021.

Total sales value* was down -10% YOY, driven by a -34% decrease in non-waterfront sales. Waterfront sales value was up +28% YOY with nearly $560M in sales value traded in Q2 2022.

Price per square foot (PPSF)* across both home size* and lot size* continues to grow YOY, and was up significantly from the same period last year: +74% (PPSF home size) and +76% (PPSF lot size).

TRANS AC TIONS

WATERFRON T

NON- WATERFRON T

TOT AL SALES VA LU E WATERFRON T

NON- WATERFRON T

A VER AG E SALE PRICE WATERFRON T

NON- WATERFRON T

A VER AG E PPSF HOME WATERFRON T

NON- WATERFRON T

A VER AG E PPSF LO T WATERFRON T

NON- WATERFRON T $1, 000 ,2 40 , 155 $559 ,45 7, 000 $440 ,7 83, 15 5 $2 0, 004,803 $43 ,0 35, 15 4 $11,913 ,05 8 $4,4 77 14 89 75

$1, 108,895,302 $436,590 ,500 $6 7 2,304,802 $12,459 ,498 $31, 185 ,03 6 $8,964, 064 $2, 575 $4,3 79 $2 ,03 2 $698 $1 ,03 6 $5 76

GARY POHRER | GARYPOHRER.COM | 6 Q2 Summary: Single Family Homes: All Neighborhoods
50 3713
$3,426$5,904 $1,228 $1,$907037 Q2 2022
Q2 2021 -44% -7 -51%% 10% 28%34% 61% 33%38% 74 % 69%35% 76 % 64%57% % CHANG E YEAR OV ER YEAR

JAN-17 17Y-JULAPR-17 OCT-17 18JAN- 18Y-JUL18APR- 18OCT- 19JAN- 19Y-JUL19APR- 19OCT- JAN-20 -20YJULAPR-20 -20OCT JAN-21 JAN-22-21YJUL -21OCTAPR-21 APR-22

Days On Market

112 DAYS

Single family homes stayed on the market for an average of 112 days during Q2 2022. This was down -24% from last quarter, and a YOY improvement of -34% compared to Q2 2021, when homes took an average of 169 days to sell.

JAN-17 17Y-JULAPR-17 OCT-17 18JAN- 18Y-JUL18APR- 18OCT- 19JAN- 19Y-JUL19APR- 19OCT- JAN-20 -20YJULAPR-20 -20OCT JAN-21 JAN-22-21YJUL -21OCTAPR-21 APR-22

GARY POHRER | GARYPOHRER.COM | 7 Inventory: Active Listings
Inventory of single family homes continues to build, up +25% YOY from an average of 39 active listings in Q2 2021 to an average of 49 active listings in Q2 2022. 2001000%50150 190 130 122 194 13 7 17 2 105 31 58 39
LISTINGSACTIVE 6002001000 145 57 1 73 590 35 7 322 19 3 138 120108 500400300 83
MARKETONDAYS

Sale to List Ratio

In Q2 2022, single family homes sold on average -7% below the asking price, quite similar to the trends seen in the previous quarter. Homes continued to sell very close to the asking price listed on the market.

One thing to note is that starting in June 2022, sale to list ratio dropped to 91%. It will be interesting to see if this downward trend continues throughout the summer of 2022.

JAN-17 17Y-JULAPR-17 OCT-17 18JAN- 18Y-JUL18APR- 18OCT- 19JAN- 19Y-JUL19APR- 19OCT- JAN-20 -20YJULAPR-20 -20OCT JAN-21 JAN-22-21YJUL -21OCTAPR-21 APR-22

FOOTER: Year-over-yearGlossary(YOY

): A method of evaluating two or more measured events, comparing the results of one period with those of a comparable period on an annualized basis.

Total sales value : The sum of all sales during a period of time.

Price per square foot (PPSF): A calculation of the value of each square foot of area of a house, condo or any building. It is calculated by dividing the price by the square footage.

PPSF: Home Size: Home size is based on the current under air square footage.

PPSF: Lot Size: This is based on the PPSF of the total lot.

Sale to List Ratio: The ratio of the final sale price of a home to its list, or asking, price expressed as a percentage. If the sale to list ratio is above 100%, the home sold for more than the list price. If it’s less than 100%, the home sold for less than the list price.

GARY POHRER | GARYPOHRER.COM | 8
*
when
105100807075859095 93 10 5 87 78 98 87 79 9691
RATIOLISTTOSALE

ENDNORTH

SINGLE FAMILY HOMES

Palm Beach’s North End, located north of Wells Road, is celebrated for quiet seclusion. Thanks to zoning laws that prohibit condos and commercial properties in this area, many residents enjoy private beachfront views.

Transaction volume was down -32% YOY for the second quarter of 2022. This is largely driven by non-waterfront home sales declining on the North End, which were down -38%. Waterfront transactions are up slightly, at +20% YOY.

Total sales value* was up +25%, driven by large transaction volume on several waterfront properties. Non-waterfront total sales value was down -16% YOY.

PPSF: Home was up +102% in Q2 YOY. Additionally, PPSF: Home increased quarter-over-quarter (QOQ)* +30%. We do not see weakening in what people are willing to pay for homes on the North End.

WATERFRON T

NON- WATERFRON T

TOT AL SALES VA LU E

WATERFRON T

NON- WATERFRON T

A AG

WATERFRON T NON- WATERFRON T

A VER AG E PPSF HOME WATERFRON T

NON- WATERFRON T

A VER AG E

WATERFRON T

NON- WATERFRON T

$559 , 275 , 030 $281, 777, 000 $2 77,498 ,03 0 $18,642,501 $6,9 $44 7, 930,54 7 $118, 115, 000 $329 ,815,54 7 $10 , 180 ,2 40 $23,623, $8,456,809000 $2, 275 Single North End

GARY POHRER | GARYPOHRER.COM | 10 TRANS AC TIONS
VER
E SALE PRICE
PPSF LO T
30 246
$46,962,833$11,562,418 $4,602
$3,43037 $1, $1,462062 $831 Q2 2022 5 44 39
$3,922$1,977 $588 $884$525 Q2 2021 32% 20%38% 25% 139%16% 83% 99%37% 102% 77%73% 81% 58%65% % CHANG E YEAR OV ER YEAR Q2 Summary:
Family Homes:

Most Recent North End Sales

S ALE PRICE

$85,9 77, 000 $56, 00 0, 000 $44,3 75 , 000 $39 ,90 0, 000 $32,525, 000 $23, 00 0, 000 $20 ,826, 140 $1 9, 00 0, 000 $18,45 0, 000 $16,225, 000 $16, 10 0, 000 $15,50 0, 000 $14,50 0, 000 $13,55 0, 000 $12,50 0, 000 $11,825,

$6,20$6,50$6,65$6$7$7$7$8,$8,3$9$10$10$11,50$11,632,2000400,000,890,000,350,000,450,00076,000000,000,773,650,750,000,200,000,750,0000,0000,0000,000

ADDRES S

901 N OCEAN BOULEV ARD

325 VIA LIND A 1320 N LAKE WAY 1020 N LAKE WAY 1494 N LAKE WAY 1265 N LAKE WAY 134 CA SA BENDITA 9 VIA LO S INC AS

225 SANDPIPER DRIVE 301 POLMER P ARK 300 INDIAN RO AD 215 INDIAN RO AD 225 PLANT ATION RO AD 268 JAMAICA LANE 308 ARABIAN RO AD 1198 N OCEAN WAY 269 QUEENS LANE

255 RIDGEVIEW DRIVE 134 SE AGATE RO AD 22 4 LA PUERTA WAY 232 MOCKINGBIRD TRAIL 265 LA PUERTA WAY 274 MONTEREY RO AD 515 N LAKE WAY 269 JAMAICA LANE 216 SOUTHLAND RO AD 220 ARABIAN RO AD 1171 N OCEAN WAY 223 MONTEREY RO AD 250 BAHAMA LANE

WATERFRONT?

YESYESYESYESYESYESNONONONONONONONONONONONONONONONONONONONONONONONO

SF HOME SIZE

10 ,655 7, 73 1,9841,9041,32,4612,8252,6283,2,82,2,4202,2883,4983,5233,1,6914,4,3,8124,54,8556,3654,4365,5,8412,76,5486,2661,231190088730650980861817702375

FOOTER: Glossary

Total sales value : The sum of all sales during a period of time.

PPSF ($) HOME SIZE 49 108,9999,7211,21712,11,29912,13,49912,4912,64512,491011,50091913,26411,1012,98114,237191718,1934,22028,41,44,3197057,32143,319069,498,201,88048,999186,937,400,589730927207,171

SF LO T APPROSIZEX.

$8, 069 $7,2 44 $7, $3,$3,414$4,836$2,$2,549$2,949$2,5$2,$3,840$3,905$4,52$3,$3,264$3,$6,99$3,$3,333$3,804$3,389$3,316$2,549$4,$3,$3,566$10$4,498$6,082093,5027341590503769113478172743125

$1, 74 $610$7$684$602$566$686$643$59$6$7$828$1,$1,$1,23$59$942$1,211$1,318$1,$1,$428$961$1,$1,$1,$950$1,964$1,582$1,3513191153086130194370000284770322

GARY POHRER | GARYPOHRER.COM | 11
APPROX.
PPSF ($) LOT SIZE

IN-TOWN

Nestled between Worth Avenue and Wells Road lies the energetic center of Palm Beach Island, In-Town. Packed with shops, secluded beaches, and five-star restaurants, this hub of culture and leisure lures residents with a flair for cosmopolitan life.

SINGLE FAMILY HOMES

In-Town transaction volume was down -50% YOY in Q2 2022, the fourth consecutive quarter that saw a decline in transaction volume.

Sales value was also down -6% YOY at $112M in Q2 2022, compared to $119M in Q2 2021.

In-Town PPSF: Home was up +70% YOY, whereas PPSF: Lot was up +80%. Note, we saw a decline in PPSF QOQ for In-Town properties. PPSF: Home was down -4% QOQ and PPSF: Lot was down -20% QOQ. We will continue to watch this metric as we enter into the second half of the year as a possible indicator of softening prices due to the macroeconomic climate.

Most Recent In-Town Sales

NOTE: Reporting in this section does not break out waterfront versus non-waterfront properties, as there are limited waterfront sales in this area. In most years, zero waterfront homes sold.

FOOTER: Quarter-over-quarterGlossary (QOQ) The measure of an investment or a company’s growth from one quarter to the next.

GARY POHRER | GARYPOHRER.COM | 13 TRANS AC TIONS TOT AL SALES VA LU E A VER AG E SALE PRICE A VER AG E PPSF HOME A VER AG E PPSF LO T $112,935,10 125 Q2 2022 20 $119 ,906,955 $11,294,513 $5,995,348 $3, 101 $1,820 $1, 129 $62 7 Q2 2021 -50%-6%88%70%80% % CHANG E YEAR O VER YEAR Q2 Summary: Single Family Homes: In-Town S ALE PRICE $21,50 0, 000 $21, 00 0, 000 $14,90 0, 000 $14 ,75 0, 000 $9 ,75 0, 000 $ 9, 00 0, 000 $8,50 0, 000 $6,225, 000 $4,9 73 , 125 $2,33 7, 000 ADDRES S 120 DUNBAR RO AD 151 CHILEAN A VENUE 449 AUST R ALIAN A VENUE 177 CLARKE A VENUE 318 SEA SPR AY A VENUE 142 SEABREEZE A VENUE 144 CHILEAN A VENUE 329 SEABREEZE A VENUE 400 SEA SPR AY A VENUE 149 ROO T TRAIL WATERFRONT? NONONONONONONONONONO 4,8465,1193,5978,2614,3162,5912,5772,0282,144936 SF HOME SIZE APPROX. $4,43 7 $4, 102 $4, 142 $1, 78 $2,49$2,320$3,$3,298$3,4$2,2595740707 PPSF ($) HOME SIZE 19 ,7 1,4,6,1712,218,87,12,502630007949,6580,001125125708 SF LO T APPROSIZEX. $1, $1,369$1,206$1,$850$1,$7$7$2,$1,6800881298196175016 PPSF ($) LOT SIZE
62

SECTIONESTATE

SINGLE FAMILY HOMES

The Estate Section comprises all residences south of Worth Avenue to Sloans Curve. It is renowned for its opulent residencies and exclusive social clubs including The Everglades Club, Bath and Tennis Club, and Mar-a-Lago.

Activity in the Estate Section continues to trend down significantly YOY. In Q2 of 2022, transaction volume was down -58% and total sales value was down -37%. This is the second consecutive quarter we saw YOY decline in total sales value. Although sales activity was down, we still saw significant growth across average sale price and PPSF. PPSF: Home was up +57% YOY and PPSF: Lot was up +109% YOY. These metrics were also up significantly QOQ (+46% and +133% respectively), which shows the market remains strong in regards to the prices people are willing to pay to own in the Estate section.

Most

$7 2,85 0, 000 $48,50 0, 000 $46, 00 0, 000 $31,25 0, 000 $2 7,75 0, 000 $25 ,75 0, 000 $25,58 0, 000 $23,85 0, 000 $17, 00 0, 000 $9 ,50 0, 000

TRANS TIONS

WATERFRON T

NON- WATERFRON T

TOT AL SALES VA LU E

WATERFRON T

NON- WATERFRON T

A VER AG E SALE PRICE

WATERFRON T NON- WATERFRON T

A VER AG E PPSF HOME

WATERFRON T NON- WATERFRON T

A VER AG E PPSF LO T

WATERFRON T NON- WATERFRON T 7% % 37 $328, 03 0, 000 $2 77,68 0, 000 $50 ,35 0, 000 $32,803, 000 $39 ,668,5 71 $16, 7 83,333 $5, 010 $5, $4,442129 $1, 74 7 $2,$968045 24 16 $52 0,0 57,800 $29 7, 47 $222,582,3005,500 $21,66 9,0 75 $3 7, $13,911,394184,438 $3, 196 $4,609$2,267 $83 7 $1, 08 $6407

Q2 Summary: Single Family Homes: Estate Section
Recent Estate Section Sales
AC
-81%13% -3
-7 77%% 51% 21% 57
96%11% 109% 88%51% Q2 2022 Q2 2021 % CHANG E YEAR O VER YEAR -58% 7% 10
8
S ALE PRICE
ADDRES S 102 JUNGLE RO AD 1030 S OCEAN BOULEV ARD 662 ISLAND DRIVE 640 ISLAND DRIVE 460 S OCEAN BOULEV ARD 57 6 ISLAND DRIVE 466 S OCEAN BOULEV ARD 101 GULFSTREAM RO AD 145 CLARENDON A VENUE 114 OCEANVIEW RO AD WATERFRONT? YESYESYESYESYESYESYESNONONO 1,9044,235,5,9545,5585,9546,62371012,352,100,6001947 SF HOME SIZE APPROX. $4,989$4,$4,59$4,296$4,633$4,661$4,$6,$4,802$5,8980537182012 PPSF ($) HOME SIZE 25,333,3417827,01218,6527,71015,9737,71413,97424,16313,904 SF LO T APPROSIZEX. $2, $683$7$1,$3,316$1,612$3,599$1,$1,$1,91118570367570704 PPSF ($) LOT SIZE
CONDOS & HOMESTOWN ALL spaciousnessthetownhomesshops,rangePalmeleganceresort-styleWhetherNEIGHBORHOODSyouseekalargebuildingwithamenitiesortheboutiqueofasmall,full-servicesite,BeachIslandoffersanexpansiveofoptionsjuststepsfromshorelines,restaurantsandmore.PalmBeachareidealforthosewhoseekconvenienceofacondobutcravetheofahouse.

Q2 Summary: Condominiums and Townhomes

Transaction volume in Q2 was down -49% YOY. We are finally starting to see transactions on the South End of the island slow, similarly to what we’ve seen on In-Town transactions for the past few quarters.

Total sales value was down -15% YOY largely driven by a decline in sales value on South End transactions. In-Town sales value was nearly flat YOY.

As with single family homes, PPSF for In-Town condos and townhomes continued to rise with +81% YOY growth, hitting a record $2,427 PPSF.

TRANS AC

IN- TO WN SOUTH END

TOT AL SALES VA LU E

IN- TO WN SOUTH END

A VER AG E SALE PRICE

A VER AG E PPSF IN- TO WN SOUTH ENDN $406, 7 22,4 70 189 ,2 47 $1,834,690$955,242 $169 ,356,90 $177,586,959 $1,982,536 $3,60 3,338 $1,38 7,398 $1,225 $2,42 Q2 inventory2022,was YOY; Q2 2021 averaged 89 active whereas Q2 2022 averaged 61 active listings per month. listings were up ever so slightly QOQ in Q2 2022, rising to 61 from 56 in Q1 2022 . We will continue to watch beginningandmarketofasinventoryQOQbehavioranindicationwhethertheissofteninginventoryistobuild.

IN- TO WN SOUTH END

GARY POHRER | GARYPOHRER.COM | 17
TIONS
342 25911
$239$166,956,823,765,647 $1,
$7 54 $1,344$578 -49% -49%-48% 15% -26%1% 67 % 45%96% 62% 81 44%% Q2 2022 Q2 2021 % CHANG E YEAR O VER YEAR 17 5 12847 $346,943,866
7
7 $83 2 Inventory: Active Listings 400 25 0 33 2 33 3 32 3 25 0 74 64 7520025030035015010050 24 6 23 6 27 6 199 53 64339JAN-17 17Y-JULAPR-17 OCT-17 18JAN- 18Y-JUL18APR- 18OCT- 19JAN- 19Y-JUL19APR- 19OCT- JAN-20 -20YJULAPR-20 -20OCT JAN-21 JAN-22-21YJUL -21OCTAPR-21 APR-22 LISTINGSACTIVE In
down -31%
listings per month,
Active

The number of days on market continued to decline in Q2 2022, reaching an average of 104 days. This is a -41% decrease from the same period last year, when properties stayed on the market for an average of 177 days.

JAN-17 17Y-JULAPR-17 OCT-17 18JAN- 18Y-JUL18APR- 18OCT- 19JAN- 19Y-JUL19APR- 19OCT- JAN-20 -20YJULAPR-20 -20OCT JAN-21 JAN-22-21YJUL -21OCTAPR-21 APR-22

Sale to

The sale to list ratio for condos and townhomes hovered right around 95% for Q2 2022, largely due to limited inventory and little room to negotiate on list prices. This has been consistent the past few quarters.

JAN-17 17Y-JULAPR-17 OCT-17 18JAN- 18Y-JUL18APR- 18OCT- 19JAN- 19Y-JUL19APR- 19OCT- JAN-20 -20YJULAPR-20 -20OCT JAN-21 JAN-22-21YJUL -21OCTAPR-21 APR-22

GARY POHRER | GARYPOHRER.COM | 18 Days on Market 400 17 3 219 325232 254 9120025030035015010050 204 17 5 142 14 7 148 17 6 151 365 228 204 209 229 24 5 305 300 201 185 97 12 7
MARKETONDAYS
104 DAYS
List Ratio* 88 93 8584 100 395 888090857570 90 90 91 93 96 97 97 9694 98 83 86 83 86 88 9293
RATIOLISTTOSALE
95%

Most Recent Sales

S ALE PRICE

$18,60 0,0 07 $15, 00 0, 000 $12,25 0, 000 $10 ,625, 000 $ 9, 02 0, 000 $8,50 0, 000 $6,85 0, 000 $6,50 0, 000 $6,464, 000 $6, 15 0, 000 $6, 005, 000 $5,65 0, 000 $5, 145, 000 $4, 10 0, 000 $3,96 9, 000 $3,90 0, 000 $3,

$80$1,$1,$1,25$1,30$1,30$1,40$1,925,$2,23$2,35$2,40$2,50$2,50$2,85$3,60780,0000,0000,0000,0000,0000,0000,0000,0000000,0000,0000,0000,000126,000125,0000,000

ADDRES S

219 BRAZILIAN A VENUE

101 W ORTH A VENUE, 0031

2 N BREAKERS RO W N, 32

110 SUNSET A VENUE E, 3 A

400 S OCEAN BOULEV ARD , PH D

360 S OCEAN BOULEV ARD , 0032

200 BRADLEY PLA CE, 206

150 BRADLEY PLA CE, 0906

130 SUNRISE A VENUE, PH 4

100 W ORTH A VENUE, 315

330 CO CO ANUT RO W, 0041

330 S OCEAN BOULEV ARD , 0054

100 SUNRISE A VENUE, 413

330 S OCEAN BOULEV ARD , 0015

330 S OCEAN BOULEV ARD , 0012

100 W ORTH A VENUE, PH 15

100 W ORTH A VENUE, 404

300 S OCEAN BOULEV ARD , 1B

22 7 AUST R ALIAN A VENUE, 0052

17 0 CHILEAN A VENUE, 6A

44 CO CO ANUT RO W, 510A

201 EVERGLADE A VENUE, 206

22 7 AUST R ALIAN A VENUE, 0032

354 CHILEAN A VENUE, 0041

146 SUNSET A VENUE, C

354 CHILEAN A VENUE, 0045

223 AT L ANTIC A VENUE, B4

223 AT L ANTIC A VENUE, A3

220 AT L ANTIC A VENUE, 0030

44 CO CO ANUT RO W, 101A

220 AT L ANTIC A VENUE, 0050

44 CO CO ANUT RO W, 30 7A

SF UNIT SIZE

5, 098 4, 130 3, 9006461,20064695804781,1,1,281,4401,1,2011,282,3461,5391,5901,9961,9961,2,4063,2,2,4342,2,6482,2,4,6090207497001441370807807748719304723

PPSF ($) UNIT SIZE

$889$1,$938$1,935$1,364$1,617$1,$1,839$1,869$1,826$1,66$1,430$2,$2,214$1,535$2,456$2,453$1,988$2,$2,890$2,348$1,950$2,8$2,656$3,$2,58$3,$3,281$2,305$4,$3,632$3,6480561487032780540827790741

GARY POHRER | GARYPOHRER.COM | 19
Condo & Townhome
APPROX.
The following is an analysis of supplemental data we evaluate to keep a pulse on all aspects of the real estate market. INSIGHTSFEATURED ADDITIONAL DATA TO TRACK ALL THINGS REAL ESTATE

Average Mortgage Rate

The average 30-Year fixed mortgage rate has made a massive move up, increasing more than 100% in the last 12 months. However, it still remains on the lower end when looking at it in comparison to the last 40+ years.

Share of Listings with a Price Cut

Price cuts have really begun to trend upward on listings in the last three months in South Florida and across the United States, from below 10% to above 20%. While we don’t have data specific to Palm Beach Island, we believe these broader numbers are an interesting early indicator, as price cuts suggest properties are not moving as quickly and sellers are lowering prices and price expectations.

For many months, South Florida was consistently trailing below the national average for share of listings with a price cut. In recent months, this has shifted and it’s now trending on par with the national average.

Source: https://fred.stlouisfed.org/series/MORTGAGE30US

Source: Zillow Data Center.

The share of listings with a price cut refers to the number of unique properties with a list price at the end of the month that’s less than the list price at the beginning of the month, divided by the number of unique properties with an active listing at some point during the month.

GARY POHRER | GARYPOHRER.COM | 21
10/201701/201804/201807/201810/201801/201904/201907/201910/201901/202004/202007/202010/202001/202104/202107/202110/202101/202204/202207/2022 10% 15% 20% 25 % 5% 0% US S outh Florida DECREASEPRICEAWITHLISTINGSOF%
30-Year Fixed
(%)RATEINTEREST 16. 00 18. 00 2 0.0 0 14. 00 12. 00 1 0.0 0 8. 00 6. 00 4. 00 2. 00 06/1971 06/1974 06/1977 06/1980 06/1983 06/1986 06/1989 06/1992 06/1995 06/1998 06/2001 06/2004 06/2007 06/2010 06/2013 06/2016 06/2019 06/2022 0.0 0008

United States Home Sales

A sale of the new house occurs with the signing of a sales contract or the acceptance of a deposit. The house can be in any stage of construction: not yet started, under construction, or already completed. New home sales account for about 10 percent of the US housing market.

100 DAYS

Construction Spending refers to monthly estimates of the total dollar value of construction work done on new structures or improvements to existing structures for private and public sectors each month in the United

Sales of new single family houses in the U.S. plunged -12.6% month-over-month to a seasonally adjusted annualized rate of 511K in July of 2022. This was the lowest reading since January of 2016 and well below forecasts of 575K, amid rising borrowing costs, prices and a fall in demand. Sales fell in the Midwest (-20.6%), the West (-13.3%), and the South (-12.1%) but rose in the Northeast (13.3%). Note: the South is showing the slowest decline, which might suggest why we’re not quite feeling the impact yet in Palm Beach.

US Census Date.

June 2022 represented the first month in the last 12 months where we saw a month-over-month decrease in construction spending in the United States. It fell by -1.1% from the previous month to a seasonally adjusted annual rate of $1.76 trillion (USD).

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New
600 800 1000 1200 400 200 2014 6201 8201 0202 2202 SALESHOMENEW Source: US Census Data. (https://tradingeconomics.com/united-states/new-home-sales) United States New SpendingConstruction 0 1 2 3 4 -1 -2 2021UGA 2021SEP 2021OCT 2021VNO 2021DEC 2022JAN 2022FEB 2022MAR 2022APR 2022YMA 2022JUN 1 1 1 1 -1 .1 .0 3 .0 1 1. 6 3 .0 9 .0 8+/-SPENDINGCONSTRUCTIONUS
Source:States.

Housing Starts

Housing starts in the United States tumbled -9.6% month-over-month to an annualized rate of 1.446 million units in July of 2022, the lowest since February of 2021 and well below market expectations of 1.54 million. The housing sector has been cooling down amid soaring prices of materials and rising mortgage rates. Single family housing starts sank -10.1% to 916,000, the lowest level since June 2020. Starts for units in buildings with five units or more slipped -10% to 514,000. Starts were lower in the Midwest (down -33.8% to 139,000), the South (down -18.7% to 710,000), and in the West (down -2.7% to 367,000) but rose in the Northeast (+65.5% to 230,000). Note, it has not dropped to the levels we saw during the early Covid uncertain period of 2020.

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STATSHOMENEWUS 1200 1400 1600 1800 2000 1000 800 2014 6201 8201 0202 2202
Housing Starts refer to the number of new residential construction projects that have begun during any particular month. Estimates of housing starts include units in structures being totally rebuilt on an existing foundation. Source: US Census Date.

In Closing

We appreciate you taking the time to read our report, and hope you found our insights on the Palm Beach Island market helpful. Based on the actual real estate transaction data for Palm Beach, the market still appears to be strong, with the exception of the low inventory challenges we’ve experienced for the last several quarters.

Additionally, we hope you find the new insights and macro trends on the overall housing market interesting. The national outlook they provide has us cautiously optimistic about Palm Beach real estate. The indicators suggest a slowdown in the overall real estate market. That being said, we’re not quite feeling it yet in Palm Beach.

Demand remains strong and the prices people are willing to pay to own a piece of the Island continues to inch up. I don’t want to say Palm Beach is immune, but it does have unique traits in its favor that help it withstand some of the economic storms we’ve endured over the last 40+ years. Our inventory is finite, the town and culture of Palm Beach is one of the best warm weather destinations in Florida, and people are moving here for flexible work setups, major corporate expansions, and no state income tax.

Thank you again for reading our report. If you have any feedback for us, we’d love to have it, as we are always looking for new ways to break down the data in more interesting or accessible ways.

Warmest wishes,

Gary ExecutivePohrerDirector of Luxury Sales

Douglas Elliman

340 Royal Poinciana Way M302 Palm Beach, FL 33480 O: 561.655.8600

M: www.garypohrer.comgary.pohrer@elliman.com561.262.0856

Source: Above data is pulled from Palm Beach MLS, The Beaches MLS and the Palm Beach Property Appraisers (PAPA). Specifically, we are only looking at transactions located in the 33480 zip code.

340 ROYAL POINCIANA WAY, M302, PALM BEACH, FL 33480. 561.655.8600 © 2022 DOUGLAS ELLIMAN REAL ESTATE. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. WHILE, THIS INFORMATION IS BELIEVED TO BE CORRECT, IT IS REPRESENTED SUBJECT TO ERRORS, OMISSIONS, CHANGES OR WITHDRAWAL WITHOUT NOTICE. ALL PROPERTY INFORMATION, INCLUDING, BUT NOT LIMITED TO SQUARE FOOTAGE, ROOM COUNT, NUMBER OF BEDROOMS AND THE SCHOOL DISTRICT IN PROPERTY LISTINGS SHOULD BE VERIFIED BY YOUR OWN ATTORNEY, ARCHITECT OR ZONING EXPERT. EQUAL HOUSING OPPORTUNITY.

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