PALM BEACH COUNTY HOUSING MARKET APPROACHING PEAK IN CYCLE

MEDIA CONTACT: Jim Hellegaard
561-319-2233, jhellegaard@fau.edu

BOCA RATON, Fla. (July 30, 2019) – Palm Beach County appears to be approaching the peak of its current housing market cycle according to a market analysis of Palm Beach County housing from faculty at Florida Atlantic University and Florida International University.  

The current Housing Price Index (HPI) score for the county is 311.32, which is slightly below the peak achieved for the county in the second quarter of 2006 of 318.31.  Housing Price Indexes are similar to stock indexes such as the S&P 500 Index and The Dow Jones Industrial Average and allow for the tracking of price changes. Residential property price appreciation for the county in the first quarter of 2019 was just .15 percent, while the prior two quarters were 1.35 percent and 2.79 percent, respectively. 

“Housing prices move in a cycle and slowing property appreciation rates typically indicate that a market is approaching the peak of a cycle,” said Ken H. Johnson, Ph.D., a real estate economist with FAU’s College of Business.

Currently, housing in Palm Beach County, based on data from the Federal Housing Finance Agency (FHFA), is 18.11 percent above its long-term pricing trend. While this level of overpricing seems substantial, it is significantly less than the degree of overpricing experienced in the county in 2006, when overpricing reached 66.59 percent above its long-term trend. 

Other evidence supporting the possibility of a housing slowdown comes from the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, which is currently indicating moderate downward pressure on the demand for homeownership in the county. 

“The downward pressure on the demand for ownership is clearly translating into slowing property prices across the county,” said Eli Beracha, Ph.D., real estate economist with the Hollo School of Real Estate at FIU.

Johnson and Beracha both agree that the county seems to be at an inflection point in its housing market and what happens next is hard to predict. However, both feel that strong employment, low mortgage rates and the rapid influx in population should serve to moderate the impact of the approaching housing slowdown.

- FAU -

About Florida Atlantic University
Florida Atlantic University, established in 1961, officially opened its doors in 1964 as the fifth public university in Florida. Today, the University, with an annual economic impact of $6.3 billion, serves more than 30,000 undergraduate and graduate students at sites throughout its six-county service region in southeast Florida. FAU’s world-class teaching and research faculty serves students through 10 colleges: the Dorothy F. Schmidt College of Arts and Letters, the College of Business, the College for Design and Social Inquiry, the College of Education, the College of Engineering and Computer Science, the Graduate College, the Harriet L. Wilkes Honors College, the Charles E. Schmidt College of Medicine, the Christine E. Lynn College of Nursing and the Charles E. Schmidt College of Science. FAU is ranked as a High Research Activity institution by the Carnegie Foundation for the Advancement of Teaching. The University is placing special focus on the rapid development of critical areas that form the basis of its strategic plan: Healthy aging, biotech, coastal and marine issues, neuroscience, regenerative medicine, informatics, lifespan and the environment. These areas provide opportunities for faculty and students to build upon FAU’s existing strengths in research and scholarship. For more information, visit www.fau.edu.