By Gwinn Volen
We are moving towards a balanced market in Ponte Vedra Beach and its nearby communities.
Real estate market health is best measured by months supply of homes. Months supply measures the number of months it would take to sell all the current homes on the market given the current sales pace. Six months of supply is considered a balanced market where home prices are appreciating at a moderate pace. Lower supply causes home prices to appreciate more rapidly (demand high, supply low). Months supply for single family homes in 32082 for September 2022 was 5.1 months, in August it was 3.6 months and in September ’21 it was 1.7 months.
As supply increases, appreciation is slowing. In the Beaches area, median home prices are up 22% year-to-date over 2021, still phenomenal, but 2021 appreciated 33% over 2020. Closed sales prices for September were up 20% over August 2022 (August was a down month). But, if you compare September 2022 to the spring peak of May 2022 prices are down 13%. There is some seasonality built into that number, but provocative headlines targeting the real estate market combined with rising mortgage rates have tampered buyer enthusiasm.
For sellers, this does not mean this is a bad market to sell in. We have seen the largest and fastest run up in real estate prices in history. The amount of equity in homes in this area is startling. National predictions show an expected average home appreciation of 1.8% for 2023. The historic national average appreciation is 4%. In Ponte Vedra Beach, the average historical appreciation is 5+%. Given recent trends, pricing is a bit of a challenge in this market. Pricing at, or just below, fair market value is more important than ever.
For buyers, we don’t predict a dramatic drop in prices nor do the majority of industry experts. The market is slowing, not tanking. This is because inventory is still low and we don’t expect a big influx of listings. There is no foreclosure crisis like 2008, and people who bought in the last couple of years with historically low interest rates aren’t likely to sell unless there is a life situation change.