EDITOR’S NOTE: This article was published in Sand Castles, July 25, 2024.
How’s the real estate market? Real estate agents are asked this question daily. The answer, of course, depends on who you’re talking to! For homeowners who have no plans to move, the market is great. But, as all first-time home buyers are aware, buying a new home can be challenging in today’s market. Overall, the market is, well, weird! Home prices are up, the number of pending and closed sales are down … it’s a little hard to predict what’s coming next.
According to the Florida Association of Realtors (FAR) and the National Association of Realtors (NAR), the national market is experiencing record high home prices; however, the number of sales is very low and interest rates are still too high.
Here are some important statistics at the national level:
· Home prices are expected to rise 5.7% this year (up from 3.9% in 2023).
· Interest rates were predicted to drop in 2024 to just above 5%. Instead, home loan rates increased and are now just under 7%. The higher interest rates have a large impact on buyers’ monthly costs. This had led to many buyers waiting to purchase their next home until rates fall below 6%.
· New construction homes made up 30% of residential sales (up from 16% before the pandemic).
· Many of today’s homeowners are “locked-in” to their current low mortgage rate and the high equity they have in their house. Financially, it doesn’t make sense for them to sell their current home and finance a new home at the much higher rates.
· According to NAR, 42% of homeowners in the U.S. own their homes and have no mortgage. Many of those people who typically would be moving to a smaller or larger home have decided to stay put, further reducing the inventory of re-sale homes.
· Investors accounted for a staggering amount of home buyers, up to almost 30% of residential purchases (compared to 20% in 2019). This further reduces the number of homes available to traditional home buyers.
So, how does the Ponte Vedra Beach real estate market compare to the national market? According to the Northeast Florida Association of Realtors (NEFAR), at the mid-year mark our market (Ponte Vedra Beach, not including Nocatee) was in a state of flux:
· The median home sale price was down 9.8% when compared to June of 2023.
· Closed sales were down almost 21% when compared to last year.
· The median price per square foot was up 2.4% to $399/foot.
· Pending sales were down 50%. Pending sales are considered a leading indicator, so we can anticipate closed sales to be down again next month.
· New listings and the active inventory are up substantially. Right now, we have almost six months of inventory available — suggesting we’ve made the shift to a more balanced market after the last several years of strong sellers’ markets.
Does all this mean now is a bad time to sell? Not necessarily! Home values are still higher, much higher, than they’ve ever been. So, unless you purchased your home within the last year, you will likely make a profit. Now can be a good time to buy, too. The inventory of available listings is much more robust than in the recent past — you’ll have more to choose from. If the current interest rate makes you nervous, remember you can always refinance the loan in the future when rates (eventually) come down. Or, you can structure your offer in a way that the seller helps buy-down your interest rate.
Now, more than ever, it’s important to have an experienced, knowledgeable real estate agent representing you. Make sure you’re well represented with an agent you trust, and someone who knows our local market.
Mark Dilworth, Team Leader
Keller Williams Realty Atlantic Partners
