Hard to believe the holidays are here! Wishing you and yours a healthy, happy holiday! During this special time of year, enjoying family, friends, and fellowship gives reason to appreciate life. Taking a deep breath and being grateful for this beautiful world blesses each of us. The real estate market is taking a breather by adding inventory and more than doubling Days On Market in recent months as a result. Active inventory is up 30% for single-family homes in Florida from a year ago and 50% across the state from 2020, when the migration from the north and west began in earnest to leave restrictive states for sovereign rights. Those moves have slowed down significantly.
The current market is a more balanced market for buyers and sellers in Florida. Sale prices have stabilized and the trajectory has softened from its meteoric rise during the Covid Era. Historically low interest rates and other market factors benefited buyers between late 2007 and April 2022, when interest rates began to climb. While inventory remained low, this put the squeeze on and we bubbled up with some fast equity and dreams of a never-ending bull market in real estate. Markets are cyclical.
Those "inflation-preventing" tactics of the past are coming home to roost, as we say in the South, and in some areas locally, such as Sewall's Point, in Martin County, FL, this ratio shows a 10%+ reduction in List to Sale Price. The same town's Dollar Volume is trending up as more properties come on the market. This is a high-end town and sellers are experiencing pain as they reduce pricing to get ahead of the market, even though the Median Sale Price is up substantially from a year ago.
Real Estate is returning to a more "normal" market. It doesn't FEEL normal for many reasons. It's been in a tight seller's market for many years seeing Days On Market at less than 11 days in some counties in Florida for extended periods of time.
Some buyers from other parts of the country feel Florida's real estate market is in free fall. Waiting for the bottom to fall out, some investors are looking for increased foreclosures and "deals." This isn't happening which speaks against a collapse in real estate like in the subprime debacle of 2007-2008. It's a different market, maybe the likes of which we've never seen. Selling because of increased taxes and insurance is far more likely than defaults on mortgages. With retirees on fixed incomes and inflation rampant, selling a primary residence may become a necessity. Inflation is a hidden, monetary tax on the people. It can be devastating.
Florida, overall, and Martin County are at five months of inventory. Palm Beach, St. Lucie, and Indian River Counties are hovering between five and six months of inventory. The median sale price in the state, four years ago, stood at $305,000, according to FloridaREALTORS.org. It now is up to $420,000, an amazing 27% increase in value in four years. That doesn't mean that trend will continue, especially if inventory keeps rising. Homeowners considering selling must take the market trends into consideration to get the most value from a home's sale.
With active inventory up by double since November 2020, and 30% from just one year ago in Florida, we're not likely to see increasing sale prices soon and may see a flat market and stagflation moving forward. Geopolitical factors, as well as central bank maneuvering, will throw in factors that are unpredictable. The debt ceiling is a non-issue until March, so there are lots of things happening quickly.
The immigration or de-immigration policies being implemented by the Trump administration will shift the market somewhat, especially in sanctuary cities, as those government and non-government (NGO) programs become irrelevant. If successful, that means less housing needs here in the US for those sent home, to their countries of origin.
Still, with potential shifts in manufacturing back to the US, while supply chains adjust, and talk of peace in some war-torn regions, our future looks bright. This shift in the real estate market isn't a bad thing. Homeowners need to be realistic in their expectations of value, especially when thinking of selling. Get professional real estate advice before making major real estate decisions!
Compared to a year ago Florida's closed sales are down only 3.5% and the median sale price of single-family homes is down only 0.6% over the past year. Active inventory on the market is up 27% compared to a year ago at 100,788 units for November. The dollar volume is flat at 10 Billion and new listings are up 7.2% at 28,076 units. Supply of Inventory is up from 3.7 months to 4.8 months. In real estate terms, a balanced market is six months' supply of inventory, so we're still in a "seller's market."
This is very selling and indicates a healthy Florida real estate market. It also shows more homeowners are interested in selling and perhaps are hoping prices continue to rise. In fact, sale prices are stable and increasing at a much slower rate compared to the last four years.
This holds true with more Florida facts as the median price is down to 95.8% from 97% a year ago for the percent of the asking price received. That means sellers are getting less for their homes than they anticipate. The median time to contract is up to 47 days from 29 days a year ago. Properties are selling a little more slowly and buyers are more cautious.
The free guides, Seamlessly Sell One Home and Buy Another, Selling for More, and Relocating Smoothly to Florida's Treasure Coast are all available at monaleonard.com/selling absolutely free and no obligation.
If real estate is on your mind, schedule a customized free consultation to catch up on what's happening in your local market.