Why Buying or Selling a Home Helps the Economy and Your Community in Palm Beach County

  If you’re considering buying or selling a home in Palm Beach County, it’s essential to recognize that your decision doesn’t just affect your personal life but also has a significant impact on the local economy and community. The National Association of Realtors (NAR) publishes an annual report that highlights the economic activity generated by home sales. The following chart illustrates the magnitude of this impact: As depicted in the visual, when a house is sold, it can make a substantial difference in the local economy. This impact primarily stems from the workforce involved in constructing, renovating, and facilitating home transactions. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), explains how the housing industry creates jobs within a community: “The economic impact means housing is a significant job creator. In fact, for every single-family home built, enough economic activity is generated to sustain three full-time jobs for a year, per NAHB research… And one job for every $100,000 in remodeling spending.” Given the various industries involved in the housing process, it’s evident that housing is a major driver of job creation. A recent article from Fortune emphasizes that housing activity has a more extensive impact on the economy than commonly perceived, as it is intricately linked to multiple facets: “Housing has three direct linkages to economic activity (GDP): the construction of new homes, the remodeling of existing homes, and that of housing transactions… consider the activity associated with home sales – think broker fees, lawyers, etc. – which are a sizable contributor to housing’s GDP footprint.” When you buy or sell a home in Palm Beach County, you collaborate with a team of professionals, including contractors, specialists, lawyers, and city officials. Each individual plays a vital role in facilitating the transaction. Therefore, when you make a move in the housing market, you not only address your own needs but also make a positive impact on the broader community. Recognizing this empowers you with a sense of purpose and contribution as you navigate the decision-making process this year. The bottom line, every single home sale has significant importance for the local economy in Palm Beach County. If you’re ready to make a move, let’s connect. Your decision won’t just transform your life; it will also have a substantial positive effect on the entire community. Together, we can contribute to the economic growth and well-being of Palm Beach County.

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A Drop in Equity Doesn’t Mean Low Equity: Palm Beach County

  You may come across media coverage discussing a decline in homeowner equity, but it’s crucial to understand that equity is closely tied to home values. When home prices appreciate, equity tends to grow, and when home prices decline, equity follows suit. Let’s explore how this dynamic has unfolded recently in Palm Beach County. During the ‘unicorn’ years, home prices experienced rapid growth, providing homeowners with substantial equity boosts. However, it was inevitable that the market would eventually moderate, as we witnessed in the fall and winter of last year. As home prices in Palm Beach County slightly decreased in the latter half of 2022, homeowner equity was impacted. According to the latest report from CoreLogic, there was a 0.7% dip in homeowner equity over the past year. However, it’s important not to let the headlines overshadow the full picture. Despite the depreciation in home prices during the second half of last year, homeowners in Palm Beach County still possess near-record levels of equity. To illustrate this point, let’s refer to the graph below, which represents the total amount of tappable equity in the country since 2005. Tappable equity refers to the equity available for homeowners to access before reaching a maximum 80% loan-to-value ratio (LTV). The data clearly demonstrates a significant equity boost during the ‘unicorn’ years when home prices appreciated rapidly (indicated by the pink section in the graph). What’s crucial to recognize is that even though there has been a slight dip, the total homeowner equity in Palm Beach County is significantly higher than it was before the ‘unicorn’ years. Moreover, there is more positive news to consider. Recent home price reports indicate that the worst of the price declines is behind us, and prices have begun to rise once again. Selma Hepp, Chief Economist at CoreLogic, explains: “Home equity trends closely follow home price changes. As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home price growth accelerated in early 2023.” This quote emphasizes a crucial aspect that the news often overlooks. Experts further suggest that home prices are forecasted to appreciate at a more typical rate over the next year. Hepp adds: “The average U.S. homeowner now has more than $274,000 in equity – up significantly from $182,000 before the pandemic. Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.” Although Odeta Kushi, Deputy Chief Economist at First American, refers to a slightly different figure, her statement further validates the fact that homeowners in Palm Beach County currently possess a significant amount of equity: “Homeowners today have an average of $302,000 in equity in their homes.” This means that if you have owned your home in Palm Beach County for a few years, you likely have much more equity than you did before the ‘unicorn’ years. Even if you have owned your home for a year or less, the forecasted more typical price appreciation over the next year should indicate that your equity is already on the path to recovery. Bottom Line Context is crucial when interpreting headlines. Although homeowner equity has experienced a slight decline compared to last year, it remains at near all-time highs in Palm Beach County. If you are planning your move this year, let’s connect and ensure you get the answers you deserve from an expert who is dedicated to assisting you in Palm Beach County.

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