Delray Beach real estate prices will not be crashing anytime soon.
Below I share important data from sources that show you, until the fundamentals change, things will go on as they’ve done since 2021 – gone up. As for Delray Beach real estate… there are even more reasons this micro-market is seeing a sustainable boom.
Baby Boomers!
Massive retirement of our population and ALL Boomers will be over 65 by 2030. That’s over 75 million people.
Most are flush with cash. May enjoyed a great stock market the last 10 years. Home appreciation is best this group has ever see… and the average homeowner equity in the US is $274,000. And one-third (33.4%) of U.S. home purchases made in April were cash. That’s up from 30.7% a year earlier. And look at this chart the amount of cash buyers coming to Florida.
The National Association of Realtors said in March that baby boomers now make up 40% of home buyers — the most of any generation — and an increase from 29% last year. Every retirement brochure is of a beach, palm tree or waves! And guess what city is catching its 15-Minutes of Fame at the same time? Delray Beach!
Why? Have a look at this video I published about “7 Things You Must Know about Delray Beach.”
Low-Rate Mortgages
Ok, they’ve crept up to over 7% recently. But, 62% of homeowners are locked into rates below 4%. 84% of homeowners are locked into rates below 5%. Homeowners have NO PLAN to sell with their low rates. It what we call “Rate Lock.”
Although inflation is easing and numbers are falling, prices of good won’t be falling in correlation – prices are now high and will only go up from here.
Delray Beach Real Estate Home Prices Have Skyrocketed
Buyers are becoming more and more priced out of this RE market
The average U.S. homeowner now has more than $274,000 in equity — up significantly from $182,000 before the pandemic.
Now look at two of the prime zip codes that make up the Delray Beach real estate market. First is 33483, which is from the train tracks to the beach. You can see how prices are rising month-to-month
Now look at 33444 – this area is from the I95 to the train tracks. It’s the central part of the Delray Beach real estate area:
As you can see, this Delray Beach real estate area is seeing appreciation gains of more than 350% in the last five years.
Supply & Demand
Supply: bottom line is we’re in unchartered territory. Supply is just not right. For example between 2012 – 2022 the number of new homes completed was 11.9 million. The number of new household formations was 15.6 million. So, we’re short about 3.7 million homes. That’s a huge supply deficit!
But when you combine new and existing home supply, reports say we’re short about 5.8 million units. Here are some points to consider:
- We’d need to TRIPLE the number of new homes each year for the next 5 years just to keep up with demand.
- Demand is not slowing and won’t change until we have a supply surplus.
- It’ll take 10 years of building before the market will catch up with demand.
Definition For Supply: If there are 100 homes on the market and 20 sell, we have a 5 month supply.
A Buyer’s market is when there are 6 months of supply or more. A seller’s market is when there are 6 months of supply or less.
Today’s national number of NEW homes is 7.4 Months – so it’s a buyer’s market. But for Existing Housing Months supply look at this chart – it’s 3.3 months – so a strong sellers marketIn Delray Beach it’s 3.85 months – still a seller’s market
So… prices are again, rising!
Delray Beach Real Estate Prices
Real estate is a hyperlocal thing. For example
Cali prices are down about 10.5% YOY. Miami is Up 13% YOY. And with Florida losing 7 insurance companies – insurers stopped writing new business or went bust – why aren’t there any drop in prices due to fear. Some said prices would crash 15 – 30%. That hasn’t happened.
And as I showed above, Delray Beach real estate prices are up over 350% since 2018. Revisit that above.
History of Real Estate – Think About These Ideas:
- In the 1979 inflation & recession era, home process went up!
- In the 10-year period of 1970 – 1980 home prices went up 150%
- Credit scores during the 2007 era were 679 on average. Today the ave credit score for folks getting home loans is 720! So lending practices are tighter, and better. Look:
In the last 5 recessions, there was only ONE where real estate prices fell… the other 4 recessions saw prices rise. With 7% mortgage rates pushing first time buyers out and prices still hover at all-time highs. Locally, the Delray Beach real estate market is not slipping at all. It’s strong and strengthening.
There are too many tailwinds in our local market that keep prices steady. And until things change… things won’t change.
Again the data on fundamentals – supply and demand – shows the picture best. There may be some areas in the US where real estate is seeing some market weakness. But the Delray Beach real estate market is not included in that data.
7 Reasons Delray Beach Real Estate Prices WILL NOT Crash
Headlines sell newspapers and subscriptions. But they do little to inform you of what’s REALLY going on behind the scenes. So I dug deep into the data to find why Delray Beach real estate has no intentions of changing direction from this sellers market and strong pricing trend. As a matter of fact, the Delray Beach real estate market is full of cash and baby boomer buyers. I detail the most important data for you in this video…
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