The Current Real Estate Market
Selling in this market is a little unusual. A lot of sellers are still hoping, or are in the mentality of where we were last year, where they list their home and it’s going to fly off with multiple offers and getting top dollar for their home. That’s not quite where we are anymore. In fact, a shift started happening around end of May- June of 2022, where we started seeing things drastically slow down. Obviously, the Feds raising the interest rates had a huge, huge effect on the way that buyers were pursuing homes.
We saw buyers take a sideline, but sellers still need to realize that the pool of buyers is a lot smaller than it was before. They are a little more weary, and don’t want to spend as much. So they’re seeing that if they wait, maybe these prices are going to go down.
Well, as a result of so many doing that, we have seen prices drop a little bit and we’ve seen days on the market increase.
It’s still a seller’s market, but it’s a little ironic because it’s kind of a buyers market as well. I’ll explain why. Typically a seller’s market, in order to stay a seller’s market, inventory months of supply has to be between 1-3 months. We are there. We are still at about a two months supply.
Now, once it hits between 5-7 months, that’s where it’s a neutral market. And then after seven months and beyond, it becomes a buyer’s market, where homes are staying on the market a lot longer. And we’re talking months. We’re seeing right now 30 to 45 days in some areas as the average days on the market.
The last couple years, what we experienced was an unusual market. I don’t even know if we can call that a seller’s market. That was pandemonium. That was absolute madness with homes flying off the market above asking within hours of going live. What we can say is that it is a seller’s market.
Inventory numbers are very low, so there are not a lot of options for buyers. There are opportunities, but not a lot of options. So if buyers really want to buy, they can. There’s enough inventory for them to make a decision and not a lot of competition necessarily the way it was last year. But it still gives sellers a little bit of leverage because inventory numbers are low.
Now, they can price it whatever they want, but that’s not what buyers are paying. The houses that are flying off, even in today’s market, are the ones priced a little bit below market value and that is why they get multiple offers.
Market value is a tricky phrase. You hear that thrown out all the time. What is market value?
Market value is what a buyer is willing to pay for a house. The end.
It’s not what a seller thinks their home is worth. It’s not what an agent thinks they should list the house for. It’s not even what an appraiser thinks the home is worth.
It is what a buyer is willing to pay. Which is why last year our market value/ property values all skyrocketed. Why? Because the seller wanted a number. The agent listed a number and then buyers said no, we’re willing to pay even more than that. And another buyer would say I’m going to pay more than that. That’s how that continued increasing prices and why it became a little bit like the wild, wild west of offers. That is not normal.
Never seen that before and I don’t think we’re going to see that again.
But what we do see is that people are constantly moving into Florida. Florida is not experiencing a lot of the same shifts that other markets are because we still have a lot of people coming in and wanting to live here. We also have an affordability problem and we have a housing crisis. We do not have sufficient homes for everybody that’s moving in.
We have so many people moving in on a daily rate in Florida that we cannot actually handle. So we are seeing that we have housing crisis. Rents are so high in our area in fact, some people are shocked when they hear that it’s comparable almost to Miami and to other metropolitan markets. But this area has become a place where people want to move and raise families and grow and have their careers.
Even if they can work remotely, they’d rather be in Florida, right?
Those drastic shifts that people thought were going to happen still haven’t really happened here in Florida because we have an amazing state that people want to live in. We have great weather, which a lot of people love. We do see a lot of northerners coming back or coming here because especially during this time, because they’re sick of the cold; they’re sick of winter.
So those are the considerations that people are looking at when they’re making a move. So with all of that, sellers have to be realistic about what they price their home if they want to sell.
Yes, there’s low inventory, yes, there are buyers, but the pool of buyers is much smaller than it was before.
We have seen that sellers either are not realistic or they’re just not in a rush. They have equity in their homes and even if the market goes down, they still have equity because all home values went up significantly over the last few years
So people have equity. Even if the market drops a little bit, it hasn’t dropped to where we were pre-pandemic numbers. As a result, sellers are realizing they don’t have to move, so they’re going to sit right here on overpriced homes. And there are others that do have more of an urgency and motivation to sell and that’s where you’re going to find opportunity.
Is there opportunity? 100%.
You have to work with professional advisors like myself and my team that can help guide you through the process, help connect you with mortgage professionals and lenders that can help you get that 2-1 buy down that can help you get the best interest rates out there on the market right now and help facilitate a plan if it’s in the next month, or three to six months. We can help facilitate your homeownership goals and selling your home. So give us a call if you have any questions.