The National and Florida Real Estate Economy Today
By Eric Gunther Founder & Managing Broker, Greenfield Waters
At Greenfield Waters, it has always been our position that real estate is a local industry.
The national housing market can influence consumer confidence, mortgage rates, lending conditions, and the overall direction of the economy. However, what happens across the country, in another state, or even in a different Florida city may have little connection to the value or marketability of a particular property.
The Florida real estate market is not one single market. Neither is South Florida or Palm Beach County.
Palm Beach Island, West Palm Beach, Boca Raton, Delray Beach, Gulf Stream, Wellington, Palm Beach Gardens, and Jupiter can experience very different market conditions during the same economic period. Individual neighborhoods, condominium buildings, waterfront areas, equestrian communities, golf communities, and gated communities can also follow their own distinct trends.
Each local market has its own conditions that may create an appropriate time to buy, sell, hold, rent, downsize, or reposition a property.
For this reason, we do not believe that buying or selling should ever be presented as one blanket answer for every property owner. Instead, we encourage owners to work with Greenfield Waters and a real estate portfolio advisor to determine whether they should be trading, holding, or restructuring their real estate investments.
Real Estate Advice Supported by Financial Analysis
Greenfield Waters operates as a real estate brokerage within the traditional Realtor framework, but our work goes considerably further by incorporating extensive market data and financial analysis into the advice we provide.
A real estate decision should not be based solely on the expected selling price of one property. Owners should also consider carrying costs, insurance expenses, property taxes, association fees, mortgage rates, available inventory, days on market, rental income, maintenance expenses, and the possible use of their capital after a sale.
We may advise a client to keep a property located within Palm Beach County while considering the sale of another property located elsewhere in Florida or in another state.
When an out of area property may be the more appropriate asset to sell, Eric Gunther, Managing Broker of Greenfield Waters, is available to assist.
Before entering real estate, Eric built his career in analytical finance. He now combines that experience with professional brokerage resources and national industry relationships to identify qualified Realtors in other markets.
Eric personally interviews a select group of those professionals and can then provide approximately three introductions, allowing the client to choose the Realtor who appears best suited to represent the property.
This service allows Greenfield Waters clients to receive broader real estate portfolio advice, even when part of their property portfolio is located outside Palm Beach County.
Understanding National and Florida Real Estate News
We advise our clients to be careful when reading real estate news that is designed to capture attention through dramatic headlines and sweeping statements.
General claims that real estate is rising, falling, strengthening, or weakening often fail to explain what is actually being measured.
A report may be referring to the total dollar value of properties sold, the number of properties sold, average home prices, median home prices, listing inventory, price reductions, or the amount of time properties remain on the market.
These figures can all describe different market conditions.
The most important consideration is the specific property and transaction being evaluated.
National real estate statistics may provide useful economic context, but they can have limited relevance when determining the value of a home in Palm Beach County, a condominium in West Palm Beach, an equestrian estate in Wellington, a waterfront property in Boca Raton, or a luxury residence in Palm Beach.
Why Average Home Prices Can Be Misleading
A simple mathematical average can be particularly misleading in the Palm Beach County real estate market.
Extraordinary oceanfront, Intracoastal, waterfront, golf, and equestrian estates can raise or stabilize average sale prices even when middle market properties are experiencing very different conditions.
This is especially important in communities such as Palm Beach, Gulf Stream, Boca Raton, Delray Beach, Wellington, Palm Beach Gardens, and Jupiter, where a relatively small number of exceptional luxury property sales can materially affect reported averages.
The average, which is mathematically called the mean, is calculated by adding all sale prices and dividing that total by the number of sales.
Another useful measurement is the median. The median represents the exact middle value after all sale prices are arranged in numerical order.
We also study the mode, which identifies the price or price range that occurs most frequently within a particular market.
The mode can be especially revealing when evaluating smaller geographic areas, gated communities, condominium buildings, country clubs, waterfront neighborhoods, and other local market niches.
The mean, median, and mode can each tell a different story. That is why a proper real estate market analysis requires more than repeating one headline statistic.
Palm Beach County Is a Collection of Distinct Markets
The Palm Beach County real estate market includes a wide variety of property types and price levels.
Palm Beach Island is internationally recognized for luxury estates, oceanfront property, privacy, and access to Worth Avenue.
West Palm Beach includes single family homes, luxury condominiums, investment properties, historic neighborhoods, waterfront residences, and rapidly developing downtown areas.
Boca Raton includes waterfront homes, country club properties, gated communities, luxury condominiums, and estate residences.
Delray Beach combines downtown living, waterfront property, historic neighborhoods, luxury homes, and gated communities.
Gulf Stream is known for privacy, oceanfront estates, Intracoastal residences, and limited luxury inventory.
Wellington has one of the country’s most recognized equestrian real estate markets, together with horse farms, estate properties, gated communities, and family neighborhoods.
Palm Beach Gardens includes golf communities, luxury gated communities, new construction, waterfront property, and established residential neighborhoods.
Jupiter offers waterfront homes, golf communities, gated neighborhoods, luxury residences, and access to the ocean and Intracoastal Waterway.
These markets should not be evaluated through one countywide average. Even within the same city, two communities may have very different inventory levels, buyer demand, sale prices, and annual turnover rates.
Should You Sell, Hold, Downsize, or Rent?
Today’s buyers are no longer acting purely on emotion. They are becoming increasingly mathematical.
Owners of large estate properties who are financially minded are selling to capture profits, make shorter term plans, and position themselves for opportunities that are beginning to arise.
Owners in the upper middle market are doing the same. Some are discovering through our advice that selling and renting for a period of time can be an intelligent strategy.
Renting is not a dirty word.
Even individuals with substantial wealth strategically rent properties when doing so supports their broader financial plans. Renting can provide flexibility, reduce carrying costs, preserve capital, and allow a buyer to act decisively when the right purchase opportunity becomes available.
The correct decision depends on the owner’s equity, debt, monthly obligations, income, credit, tax considerations, future housing needs, and overall real estate portfolio.
Carrying Costs and Consumer Financial Pressure
One of the guiding principles at Greenfield Waters is that privacy and discretion must always remain paramount.
While honoring that commitment and speaking only in broad terms, it is fair to say that carrying costs are creating pressure for property owners at several levels of the market.
This includes owners of middle market homes in gated communities as well as high net worth individuals who own multiple properties across several states.
Property taxes, insurance premiums, association fees, mortgage payments, maintenance expenses, and the costs associated with owning more than one residence can consume a meaningful amount of capital.
Within the middle and upper middle markets, we are also seeing credit card balances increase while minimum payments consume more monthly cash flow and available credit begins to decline.
For real estate owners experiencing this pressure, selling a property with substantial equity may provide an opportunity to relocate, find better value, downsize, eliminate debt, or rent temporarily.
Taking that step can help preserve both credit and capital. When the right buying opportunity eventually presents itself, those owners may be in a stronger position to act quickly and win the transaction.
“Today’s buyers and property owners are becoming more analytical. The correct real estate decision is not always to buy, and it is not always to sell. The answer may be to hold, rent, downsize, reposition capital, or sell one property while retaining another. Our responsibility is to examine the complete financial and real estate picture before offering advice.”
Eric Gunther Managing Broker Greenfield Waters Worth Avenue, Palm Beach
A Private Real Estate Portfolio Review
Greenfield Waters is available to help property owners understand their options and make informed decisions within the national housing market, the Florida real estate market, and the many individual markets throughout Palm Beach County.
To arrange a complimentary and private discussion with Eric Gunther, contact Greenfield Waters and request a real estate portfolio review.
A review may include property values, equity, carrying costs, local inventory, recent comparable sales, annual turnover, expected marketability, rental considerations, and the potential advantages of buying, selling, holding, or repositioning a property.
In this unusual and evolving real estate economy, the property owners with the best information are likely to emerge in the strongest positions.
You should be one of them.
Eric Gunther and Greenfield Waters are here to help.
Glad to help and advise, as always,
Eric Gunther Managing Broker Greenfield Waters
www.greenfieldwaters.com
[email protected] Call or Text 561-400-8474
Eric Gunther of Greenfield Waters examines national, Florida, and Palm Beach County real estate trends and when owners should buy, sell, hol