BREAKING NEWS: There’s a severe imbalance between supply and demand in the Florida housing market.
The Florida housing market continues to shift, bringing both opportunities and challenges for buyers and sellers alike. As of September 2024, there are a number of key trends and statistics that those interested in the real estate market should be aware of, particularly in areas like Martin County. Maria Wells, a seasoned real estate expert, recently provided insights into these trends, highlighting where the market is and what may be expected in the coming months.
One of the main takeaways is that closed sales are up by about 4%, indicating that despite economic uncertainties, people are still buying homes. This is a positive sign that the market has not stalled, but it comes with a caveat—new listings are down by approximately 3%. This reduction in new inventory is putting pressure on the existing stock, making it more challenging for buyers to find properties, especially in more affordable price ranges.
The median sales price in Martin County has dipped slightly to $570,000, a 6% decrease from the same time last year. However, when looking at year-to-date data, prices have risen by about 1.7%, showing that overall, the market is still on a steady climb. For buyers, this slight dip could represent a chance to purchase before prices start to increase again. On the other hand, sellers can still benefit from a stable market where homes are typically selling at about 95% of their listed price, indicating strong demand and realistic pricing.
Inventory continues to be the main issue. The market has about four months of available inventory, which is below the six-month supply needed for a balanced market. This limited inventory has been an ongoing challenge since the pre-pandemic days and shows no immediate signs of improvement. This situation is particularly difficult for buyers looking for homes in lower price ranges. For example, in Martin County, there are only 16 single-family homes available between $50,000 and $250,000. These limited options make finding an affordable home tough, especially when specific criteria like the number of bedrooms come into play.
As buyers look at properties in the $300,000 to $400,000 range, the number of available homes is slightly better but still tight, with only 56 homes on the market. The $400,000 to $600,000 range has 164 listings, showing a bit more flexibility, while the highest number of options is in the $600,000 and above range, with over 450 homes available. This uneven distribution of inventory means that while higher-budget buyers have more choices, those seeking lower-cost housing face significant competition.
One area that is helping alleviate some of the demand is new construction. Builders have recognized the lack of inventory and are working to add more homes to the market. New construction offers buyers a different avenue to consider, especially when existing homeowners are reluctant to sell due to current low mortgage rates. Many people who secured mortgage rates around 3% during the pandemic are hesitant to move and lock into higher rates, contributing to the lack of inventory.
The rental market has also shown signs of stabilizing, which is noteworthy for both renters and potential investors. After a period of rapid growth, rents are currently staying flat. This stability comes after a surge of new apartment buildings and single-family homes designed for rent. However, the construction of rental properties has slowed, which could lead to tighter rental markets and higher rents in the next few years.
A striking number shared by Wells is the 66.4% increase in home prices in Florida since the pre-pandemic era. This significant appreciation has given many homeowners substantial equity. However, it also poses challenges for those considering selling. Even with equity gains, sellers face the issue of higher replacement costs and mortgage rates, making them hesitant to list their homes. This cycle further contributes to the limited inventory, creating a complex environment where buyers have fewer options and sellers are holding onto their properties.
Foreclosures, often a topic of concern during economic shifts, remain nearly nonexistent in this market. In 2023, Martin County saw only one foreclosure, and as of September 2024, there has been just one so far this year. This lack of foreclosures suggests that, despite challenges, most homeowners are not in financial distress.
For those looking to buy, the current market may offer a bit of wiggle room to negotiate, but properties are still selling close to their asking prices. For sellers, the limited inventory works in their favor, making it possible to sell at competitive prices without significant discounts.
The bottom line is that while the Florida housing market is facing some inventory pressures, it remains steady. The slight dip in prices may offer a window of opportunity for buyers, but the limited number of affordable listings makes competition fierce. New construction helps bridge the gap, but not enough to fully meet the demand. This makes it essential for anyone entering the market to work with knowledgeable professionals who can guide them through the local trends and help navigate the limited options available.
Staying informed and aware of these market dynamics is key for both buyers and sellers to make the best decisions in the current landscape. Whether considering a purchase or sale, understanding where the market stands and what trends are emerging can help set realistic expectations and strategies moving forward.
