What factors have significantly impacted the housing market in Palm Beach County?

There are several critical factors at play. One notable issue is the ongoing shortage of homes nationwide, which totals around 3.8 to 4 million homes over the last decade, resulting in a significant supply shortage. Additionally, millennial first-time homebuyers have been delaying their purchases compared to earlier generations, creating a backlog of potential demand. COVID-19 has also spurred a trend of people migrating from Northeastern cities, seeking to upsize and relocate to areas like Southeast Florida for a better lifestyle. This trend is fueled by the realization that remote work is more feasible, leading to increased demand for homes that offer versatile living spaces for couples seeking separate work areas.

What specific areas are experiencing high demand in the Palm Beach market?

In Palm Beach, communities like Cresswind in West Lake, Alton, and Artistry in Palm Beach Gardens have seen tremendous demand. With approximately 1,400 units in Alton and Artistry and an additional 800 in West Lake, the demand has been unprecedented. To manage this demand effectively, we’re controlling the release of units to maintain quality and meet delivery schedules. However, despite the demand, the industry is contending with rising costs due to challenges in the supply chain and increased commodity prices, leading to substantial price hikes by builders across the region.

Have supply chain disruptions shown any signs of improvement lately?

Unfortunately, from my perspective, there hasn’t been significant improvement in supply chain disruptions. Lumber, metal, concrete, windows, appliances, PVC, and other resin-based materials are still facing shortages. To navigate this, we’ve adjusted our ordering process by placing orders about two months ahead of the actual need. Lumber prices, for instance, surged by 300% over the past year, resulting in an average $36,000 increase in the cost of a home in the U.S. due solely to lumber costs.

What’s your outlook for the housing market in the next 18 months?

Achieving stability in the supply chain and material consistency is crucial for all markets. The uncertainty surrounding the lumber situation needs resolution, especially considering that the supply chain disruptions occurred due to COVID-19 shutdowns and subsequent inventory depletion. Despite record-setting sales this year, the industry’s major concern remains whether these shortages will ease, allowing for better pricing options for customers.