July 2023 Market Report – June 2023 Data
Results are out from the latest Florida Realtors analysis bringing us some good news for the data of the month of June 2023.
First, it appears that the impact of the interest rate hikes has finally started to settle, and people are starting to get used to the idea that rates are higher for the foreseeable future. Now that we have accepted this new world, people are starting to move forward with their real estate purchases but are adjusting how much they can now buy, potentially putting down more money to keep the loan-to value ratio low and other strategies as we discussed in the past. “Date the rate, Marry the house” as what goes up will eventually come back down and refinancing down the road is most likely a part of many homeowners’ strategy.
Second, the gap between this year’s closed sales and last year’s closed sales is starting to shrink. If you recall in my market report from the early part of 2023 it showed a very large differential of closed sales from same time last year. In fact, if interest rates start to stabilize after this latest increase, it is possible we may surpass 2022 closed sale results for the second half of the year in South Florida.
Third, pre-pandemic times brought a slower real estate market in the summer months, and we are once again experiencing this seasonality. Summer has been quiet around town but It is once again wonderful to see people taking summer vacations and traveling around the world.
With summer coming to an end, our activity has increased quite substantially in the past few weeks. Public schools reopen next week, and private schools are getting ready for opening just a few weeks away. Life is coming back to South Florida, and I fully expect the waits to rise in all our local restaurants once again – but again, this is a great problem to have.
We are anticipating the influx of people back to our area will bring a change to the current inventory situation we have been experiencing.
Inventory in the market of $600,000 and below is low but stable as compared to the past few months.It is still a strong seller’s market with an average of 2.3 months of inventory.
Inventory in the market $600,000 to $999,000 is 3.25 months which still boosts a strong seller’s market; however, inventory has dipped from the past few months.
Our luxury market shows some interesting trends. First, inventory is down in this category as well but still in a balanced market with neither the seller nor the buyer having an advantage. Listings are taking longer to sell, and a large percentage of sales happened well below the listed price. Both the median and average sales prices have dropped year over year.
What does all this mean for you as a Buyer or a Seller?
First, Sellers, while inventory is down, one may think that this gives the sellers an advantage. I would say yes, it does, but only if you price your home right. The buyer’s sense of urgency and desperation is no longer what we experienced during the pandemic. If your home is priced too high, in this market, it does not typically result in a lower offer, the listing will simply sit. Once a reduction occurs to a price point that the market deems appropriate, then the showings and offers come. Ensure you put your best foot forward regarding staging, pricing and who you partner with to sell your home. Marketing, advertising, and good old-fashioned sales 101 will make a difference.
Buyer’s, be patient. There is not a lot of inventory in most price points, so this is a great opportunity to learn about communities and determine where you want to be. This is a market in which we, as Realtors, end up spending a lot of time out in the communities with our clients educating them on the various areas so that when inventory does pick up and there are more choices, our buyers have already narrowed down to the areas they want to live. This does not mean you cannot get into a home today, simply stating that when they are priced right, they are still going quickly and it most likely will take more time to get you into the right home at the right price.
Selling and buying simultaneously is a challenge in a lower inventory market. Our suggestion to our Sellers in this situation is to consider selling your home, pocketing the profits and then being free to make an offer when the right one comes along. Of course, there are other strategies in this scenario and ones that we evaluate on a case-by-case basis with our clients.
Our market is trending in the right direction in most categories, we simply need more inventory and expect to see an increase in this area over the next few months.
Whether you are selling or buying or both, we would love the opportunity to be your real estate partner.
Amy and Noreen Team of Lang Realty
Want to know what top events are happening in Palm Beach County in the month of March 2023? Listen to Noreen Payne’s video overview. Join us every month for highlights of top events in the area! Call us with any questions at 561-571-2289
Want to know what top events are happening in Delray Beach in the month of December 2022? Listen to Noreen Payne’s video overview. Join us every month for highlights of top events in the area!
It was a bit shocking to see the change in numbers this month related to inventory and balance of market – we have “felt” the change in the market but still surprised to see the uptick on the higher end market tipping the scales at the million dollar price point and beyond to the verge of a buyer’s market.
It is official, at the higher end market we are back to prepandemic seasonality, time to contract/closing and the skills needed to sell a home (now you have to actually have them😊). While we are still above pre-pandemic price points, as to be expected, we are leveling off. The demand in Florida is still stronger than most of the country – we attract the 2nd home, vacation home, rental market and those from up north that simply want our weather and lifestyle. However, there are changes ……
Cash sales are down significantly, inventory is up across the board and new listings on market have slowed. The mortgage rates and stock market portfolio losses are impacting all markets and Palm Beach county is not immune to these changes. Don’t get us wrong, homes are still selling – we are in fact busy realtors – but the homes are taking longer to sell, our costs to market homes has increased significantly and our time for showings (yes, we personally show our listings) and open houses take more manpower. Of course, we’re not complaining as this is what differentiates great agents from the pack. We’re sharing because it is a distinction from what has occurred over the past several years.
People often ask us whether this is a good time to sell and/or to buy. The answer is yes; however, the strategy and the numbers change. Specifically, some buyer’s obtaining a mortgage may have to reduce their price point to keep their monthly costs the same. And, what goes into selling your home, from staging to repairs should be considered more so then before. Regardless, there is additional inventory now for buyers to choose from and sellers, there are buyers still wanting to buy. Get ready to work with your Realtor (Amy and Noreen Team preferably) to ensure your home stands out from the rest.
For those of you who follow our monthly market report and follow the numbers indicating the market strength and leverage, they are as follows:
As you recall, balanced market is 6 to 9 months of inventory – meaning if nothing else came on the market how many months would it take to “consume” all of the inventory. Over 9 months buyer’s market..
400,000 – to 599,999 – 4 months of inventory –
599 – 999,999 – 6 months of inventory – recently reached a balanced market and sellers have lost their advantage
1,000,000+ price point 9 months (yes I said it 9 months) – first time in 2022 that we have reached 9 months of inventory – there are now many options for buyers to select from, hence the price reductions we’re seeing on market
Understanding the market helps agents and consumers alike make educated decisions – this is why we spend time every month sharing our research and what it means to you.
If you have questions or would like to discuss the results any further, please do not hesitate to reach to us at 561.571.2289.
Want to know what top events are happening in Palm Beach County in the month of November 2022? Listen to Noreen Payne’s video overview. Join us every month for highlights of top events in the area!
There are many variables that make September results interesting! The final results and evaluation of the next few months are going to be critical to really ascertain and give guidance on our Palm Beach County market.
First, the week leading up to now, Ian, as you can imagine, caused a pause in most of Florida’s market – the path of the Hurricane was unclear and therefore most sellers and buyers chose to wait before taking any action on their real estate decisions. Further, for any buyer under contract to close on a home in September, if they had not yet bound their new insurance policy, insurance agents were unable to complete the process therefore causing closings to be delayed. The above skewed, of course, new listings coming on market, buyers going under contract and closings for the month of September.
Another variable, though may also be the trend for our future, is that we are back to season in our market. Historically and prior to our pandemic years, we saw a drop off in summer months and the market did not typically pick back up until we approached our season – October, November timeframe. For the past 3 years or so, we were strong 12 months of the year with many people desperately wanting to relocate or purchase a second home in south Florida. The lifestyle we offer in Palm Beach County fueled the real estate market. With September’s results showing a decrease in almost all categories across the board, we need to wonder if we are back to “seasons” of real estate in Florida or were we simply impacted by the Hurricane.
Yet another aspect is mortgage rates. Cash sales were down again this month which means more people are financing the homes they are buying. With interest rates higher than we have seen in many, many years and the threat of continued increases in those rates, we know that people are looking at lower price points than they did one year ago, and others are simply not able to purchase or purchase what they want and are holding off for now.
All three (3) of the above variables impacted our September results, we will be closely monitoring the next few months to really ascertain whether we are back to prepandemic market seasons and how much the interest rate will impact our unique market.
With all of that said, Noreen and I had a very busy September with both listings and buyers going under contract. I share that because I do think it is worth mentioning – when homes are priced properly, and buyer expectations are also set upfront – homes move. People still want to sell and people still want to buy but realistic expectations are critical and the market is clearly indicating this fact.
In EVERY price point which we evaluated, months of inventory crept up by at least one month – $600- $900 and then $1,000,000 and up – is officially in a balanced market – for $1,000,000 we are actually approaching (on the cusp) a buyer’s market – but from a recommendation perspective of our team – we caution anyone to get too confident and treat the $1,000,000 and up price point as a balanced market. Too many factors impacted September results to change strategy at this point; however, we currently have the most inventory at every price point over any month in 2022.
I hesitate to share specific numbers as almost ¼ of our month was impacted by the Hurricane (Ian) and we don’t feel that these numbers are truly an indication of where our Palm Beach market truly stands – cash sales down, median and average price points down, new listings and new pending are down as well and inventory was up almost 68% from this time last year.
All of the above said, we are extremely confident that our market is still very, very attractive and is a highly sought-after place to live, work and play. While this month we experienced a shift, we believe it was a temporary shift (as to the degree of which we shifted). We will not continue, at this time, to see unsustainable growth in price points but we will see properties moving at price points higher than the pre-pandemic times.
Our greatest advice in this market, choose your real estate partner wisely😊
AMY STARK SNOOK,
Phone | 561-571-2289
Amy and Noreen Team