Boca Raton Real Estate Update

So, what’s going on in the Boca Raton real estate market?

The graph above is pretty, isn’t it?  It has some pleasant colors, and “movement” of the lines.  What does it actually tell us, though?  It gives us a 3 year history of what has been going on the the Boca Raton real estate market.  The green line represents homes currently available for sale.  The blue line shows homes that have sold for the month.  The red line indicates the number of new listings for the month, and the yellow line shows the average price of homes that have sold for the month.

We don’t give much weight to the average sale price representation (yellow line), because it isn’t an accurate representation of what’s going on in the market.  For example, if there is a run on Century Village condos, the average sale price can be skewed down.  If a $20+ million home sells, the numbers will, obviously, jump up.  The median home price in Boca Raton, for the month of May 2008, was just over $300,000.  Median means that there were an equal number of sales above that price, and below that price.  It is not the average, which was over $560,000.  Sales ranged from a low of $24,000 in Century Village to $10,600,000 in Royal Palm Yacht and Country Club.  What we are seeing in the market right now, is that home prices, generally, are coming down at a rate of 1.5 to 2% per month.

The other numbers, though, give us a good idea of what is happening in the market.  One of the things that it tells us, is that at the rate that homes are selling (blue line), it would take almost 2 years to sell all of the homes currently available for sale (green line), if no other homes came on the market, and more homes are coming on the market every month (red line), than are selling every month.

A “normal” market is one in which there is about a 6 month supply of homes available.  When there is less than a 6 month supply, it is generally considered a “seller’s market,” and when there is more than a 6 month supply, it is generally considered a “buyer’s market.”  What do those terms mean?  It essentially boils down to the basics of economics; supply and demand.  In a seller’s market, there is a limited supply of homes for sale, so, prices rise.  In a buyer’s market, there is a glut of homes on the market, and buyer’s have their pick, so prices, naturally, come down.  Obviously, we are currently in a buyer’s market, which is why we’re seeing prices come down.

If you have any questions about your specific situation, please, don’t hesitate to contact us.  Visit our website at:  www.NathansonBrothers.com