By Gwinn Volen
The NE Florida real estate market is holding strong. Real estate is a network of micro-economies, and NE Florida, unlike other parts of the US, has moved through the macroeconomic downturn relatively unscathed.
Though we experienced a dip in prices starting in Q3 2022, and prices were down another 5% in Q1 2023, prices were up 8% in Q2 2023. My expectation is we are normalizing, as illustrated in the graph below.
MEDIAN SALES PRICE RECOVERS IN Q2 AFTER DIP
Nationally, standard appreciation is 4% annually, though our area typically sees a higher appreciation, averaging ~8%, excluding the last few years. This is the direction we are moving barring an unforeseen economic event.
We now refer to 2021 and 2022 as the “unicorn years” of real estate – record-breaking appreciation and frenzied buyer activity. That said, inventory in our area remains low and there are definitely buyers out there. We can expect prices to hold, with more moderate increases for the foreseeable future.
CLOSED SALES REMAIN DOWN IN Q2, THOUGH UP FROM Q1
Though Q2 closings were down 18% versus Q2 last year, there was a 27% increase in closings in Q2 versus Q1 of this year.
Some of the quarter-over-quarter improvement is due to seasonality, but its still a healthy sign. Nationally closed sales are still significantly down from 2022, at approximately -23%
With affordability still a challenge, and some sellers locked in and loving their low interest rate loans, we expect prices to maintain while sales remain down until mortgage rates dip below 5.5%.
Once mortgage rates drop (which they eventually will), competition will increase and drive pricing up even further.
Lastly, days on the market dropped in Q2. It’s at a very healthy 31 days vs the long term average of ~40 days which means sellers still need to prepare for quick sales.
MEDIAN DAYS ON THE MARKET REFLECTS HEALTHY SALES CYCLE
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