August 2023 Market Update

From an overall perspective, August’s real estate market has been more of the same; however, digging in does create some questions. Facts and feelings play a role as we deal with these questions and, at some point, we all need to face reality.

Facts

The median sale price here in Central Florida was around $350,000, that’s up just slightly over July, but remaining generally steady from $344,000 in December. It took a median of 14 days in August for sellers to get acceptable contracts for their homes. That is two days slower than July but continues a general trend downward from back in February, when it was taking 43 days. Homes are selling more quickly, and prices are up. Sellers are still getting well over the median of 99% of their asking prices.

Feelings

Some sellers don’t buy this, and their homes sit on the market for extended periods, and they’re baffled about what’s happening. Unfortunately, if a seller’s home is sitting on the market and they haven’t received a contract, it’s likely that their home is simply overpriced. We continue to have historically low inventory levels, there just aren’t enough homes on the market to satisfy buyer demand. We still have just about two months of inventory. This means that if no new homes were added to the market, it would take just two months for all the homes to sell out. A balanced market is six months, something we haven’t seen in years.

Face reality

But what about interest rates? They’ve skyrocketed and nobody’s buying homes, right? Wrong! The Shaver Group sits at about $18,000,000 year to date volume, our best year ever. While it’s true that interest rates at the end of August were around 7.18 percent, it’s up only .1 percent since October 2022. I hear it repeatedly that some buyers are waiting for the market to crash to buy, but I’ve been hearing that since 2019 and it didn’t work out too well for them. Yes, the market could crash, and prices could tumble. It’s also possible that they’ll continue to rise, and there is plenty of data that supports this option. Rates will likely come down. Will that be in 2023 or 2033?

I don’t have a crystal ball; however, homes should be purchased for residential purposes, NOT investment purposes (unless you can afford rentals or flips). Historically, real estate shows a 4% year-over-year gain. Yes, 2008 was a disaster, but 2022 was the opposite. There will always be ups and downs, stay the course over time you you’ll be just fine. Every day renters rent, they miss out on appreciation and principle buy down and it becomes harder, and more expensive, for them to purchase. TheShaverGroup.net