By Gay Cororaton, MIAMI REALTORS Chief Economist
With mortgage rates remaining elevated and with home prices continuing to appreciate, million-dollar home sales accounted for a larger share of the market in the Jupiter-Tequesta-Hobe Sound (JTHS) market area. The share of million-dollar homes sold in 2024 Q1-Q3 rose to 30% from 26% during the same time in 2023. In numeric terms, million-dollar home sales rose 12% year-over-year, with 1,072 million-dollar homes sold. The market share of million-dollar homes has starkly increased since 2019 when the share was just 11%. The rising share of million-dollar homes indicates the stronger presence of wealthy buyers.
The highest shares of million-dollar sales in the first three quarters of 2024 are those of 33478 (Jupiter, 49%) and 33404 (Singer Island, 41%). By number of sales, 33418 ( Palm Beach Gardens) had the most million-dollar sales at 257 sales, up 22% from the same period one year ago. The area with the second highest million-dollar sales was 33458 (Jupiter) with 168 sales, up 2% from one year ago.
The increase in million-dollar home sales stands to contrast to the 3.6% overall decline in home sales in the JTHS market. Still, this decline was smaller than the decreases seen in Miami-Dade (-5.0%), Broward (-7.1%), and Palm Beach Counties (-9.8%) except in Martin County (-2.8%) and St. Lucie County (-3.5%) that saw smaller drops in closed sales. The smaller decline could be due to the higher share of cash and wealthy buyers in the JTHS market which softens the adverse impact of higher mortgage rates on affordability.
More cash buyers compared to pre-pandemic level, accounting for 54% of sales
The share of cash buyers moderated in the third quarter of 2024 to 53% compared to 57% in the same period one year ago. However, this is still higher than the 43% share in the same period in 2019. Cash buyers made up 49% of single-family sales and 68% of condominium/townhome sales.
All-cash sales accounted for a higher share of sales in the JTHS market compared to Miami-Dade (34%), Broward (35%), Palm Beach (48%), Martin (46%), and St. Lucie (29%).
The highest share of cash buyers was found in 33477 (Jupiter, 77%), 33408 ( North Palm Beach/Juno Beach, 63%), and 33404 (Singer Island), 60%).
2025 Outlook: Wealthy buyers to sustain Southeast Florida’s housing market amid uncertain interest rate outlook
Home sales in the MIAMI Jupiter-Tequesta-Hobe Sound (MIAMI-JTHS) market totaled $4.0 billion in the first three quarters of 2024, reflecting a modest increase of 0.2% compared to the same period in 2023. This area accounted for 8.4% of Southeast Florida’s total sales volume, which reached $47.7 billion during the same period. The dollar sales volume in the JTHS market area cooled down from a strong first quarter growth (+18.0%) to a decline in the second quarter ( -9.0%) and third quarter (-1.8%).
The underlying demand fundamentals of the Jupiter-Tequesta-Hobe Sound market area remain positive. The JTHS market tends to attract wealthy retirees, and this trend will continue as retirees take advantage of Florida’s no state income tax and lower property taxes .
The economic and housing outlook for 2025 is still evolving as incoming and former President Trump implements his economic agenda. The campaign policies include a mix of policies such as reducing the corporate tax rate from 21% to 15%, raising tariffs to promote American manufacturing, and restoring the state and local tax (SALT) deduction that was capped at $10,000 in 2017.These policies will affect the pace of economic growth, inflation, and the path of interest rate cuts.
MIAMI’s September 2024 Outlook Update projected mortgage rates to fall to 5% by end-2025, but the risks remain tilted to the upside than the downside. Higher tariffs to spur American manufacturing could lead to an uptick in the cost of imported goods and inflation, prompting the Federal Reserve Board to hold off on further interest rate cuts.
However, wealthy buyers are less impacted by mortgage rates as they have the wherewithal to pay all-cash, put in a higher downpayment, or draw on existing home equity or financial investments. With a propensity to attract wealthier buyers, the JTHS market area will outperform markets where household incomes are typically lower.
Download the 2024 Q3 Jupiter-Tequesta-Hobe Sound Market Report below.
The post Million-Dollar Homes Accounted for 30% of Home Sales in the Jupiter-Tequesta-Hobe Sound Area in 2024 Q1-Q3 appeared first on MIAMI REALTORS®.
