Market Update March 2022

West Volusia Monthly Market update (Deltona, Deland (inc. Lake County), Debary and Orange City)

Do you live or own real estate here in Central Florida? If so, you’ll want to hear the latest about our local real estate market. A great philosopher once said “The times they are a changing…so you’d better start swimming or you’ll sink like a stone”…or something like that (Bob Dylan). Well these times are IN FACT changing. I’ll tell you exactly what you need to do to succeed in our local real estate market today.

At the end of March, the median sale price of a home in the West Volusia area was $298,900, that’s up almost $5,000 in just one month and up almost $56,000 in just one year! As I’m pricing homes, I’m a little more cautious than I’ve was just a couple months ago.

HOW MUCH
The selling price to listing price ratio is still at 100%, but you may remember last month when I addressed the concept that this 100% number is a cap-the MLS doesn’t actually show the ratio for those that sold above 100%. I am certain that the number of homes selling above 100% has declined from my experience, and from other professionals in the area.

HOW FAST
It took sellers a median of 6 days to get their homes under contract. That’s flat since last month, which is still a very good number, but this doesn’t mean there isn’t some pushback from buyers. Sellers are aware of the power they’ve held, but they’re also aware that they need to sell while the sellin’ is good. That 6 days is still faster than it was three months ago when it took 7 days for sellers to accept a contract.

HOW MANY
Next, let’s talk about how many homes are available for purchase.

At the end of March there were just 335 active listings on the market. That’s down from 476, or 30% in just 3 months! A year ago, there were 381 homes available. We actually had an increase in number of available homes last summer, but the number of available homes has been on the decline since last September.

INTEREST RATES
Freddie Mac’s interest rate at the end of March was 4.67% I know that number will cause some Millennials to lose their minds, but that is still a historically very low number. That’s up from 3.11% at the end of the year and it’s been in that range for the last year. Check out this chart and see how the rates have skyrocketed since the end of December.

WHAT ABOUT OUR LOCAL MARKET?
So, what’s impacting our current local market? The interest rates are the big news and the talking heads on the news outlets all say the rates will continue to rise as the Fed raises its rates to combat the out-of-control Inflation. I read one article that the war in Ukraine has actually kept the rates a bit lower. The lack of available homes is the one thing that I believe has kept the days on market steady and kept prices moving upward and the inventory down. As for US, employment is good. Disney and the attractions, Amazon, the Lake Mary and Sanford corporations and the local municipalities all continue to struggle with hiring, so there are plenty of jobs out there for those that want to work. More workers usually equates to more buyers.

SO WHAT’S THE PROBLEM?
This lack of inventory is a good thing, right? Well, if you’re a seller, yes. If you’re a buyer, heck no! As these rates rise, many of the buyers we’re seeing are now being priced out. It’s important to remember that if a buyer is approved for a purchase for a given home price and rates rise, they can no longer afford that home. Many of these buyers are turning to rentals, but that just exacerbates the rental shortage. I’m getting several calls every week of people looking for rentals, and I don’t even know how to help them.

Thus far, sellers haven’t felt too much pain despite my listings sitting just a bit longer, but we see that buyers ARE feeling it. As such, as rates rise and this lack of inventory burns itself out as all these new homes are completed, we’ll surely see a balancing of the market.

WHAT’S COMING?
Given that I’m already feeling the turn in spite of the positive numbers, I anticipate that we’ll start seeing more price reductions and a balancing of power in this market by mid-summer. I don’t expect the market to fall off a cliff or anything like that, but I’m confident we’ll see changes by then.

WHAT DOES THIS MEAN FOR ME?
Sellers, I encourage you to pay attention to what’s happening and get while the getting’s good. Buyer’s, stop worrying about overpaying because appraisals are helping many of you and worrying about a home being overpriced by, say $10, could cost you another $40k in higher interest rates IF you’ll even be able to afford a home tomorrow.

If you have questions about the market’s future, or if you have any questions about the real estate market here in Central Florida, reach out to me directly.

 

 

 

 

 

Published on April 14. 2022 / Tags: Central Florida, Real Estate, real estate trends / no comments.