Thursday, August 30, 2007

Over valued real estate - West Palm Beach

The bubble party is finally over in Palm Beach. In December, median home prices fell to $408,200, down from $421,500 in November. For the first 9 months of 2005, the real estate market was really hot. Prices had increased by 21 percent. However, buyers started to exit towards the end of the year. Currently, Palm Beach multiple listing service now shows 20,399 homes for sales, up from 7,799 two years ago. New home construction is also slowing. Palm beach County saw 1,415 housing starts in the fourth quarter of last year, down 25 percent from a year ago, while St. Lucie County's housing starts fell 11 percent.

However, the market remains massively overvalued. As of October last year, prices were 115 percent above long run trend. However, more recent data points decidedly south for Palm Beach property prices.

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