Is our local real estate market crashing? Keep reading for some fact-based data for the West Volusia real estate market and what really happened in July 2022. I’ll be addressing the residential West Volusia real estate market including Deltona, Deland, DeBary, Lake Helen and Orange City, as I review the market for the month ending July 30^th, 2022.

At of the end of July the median sale price here in the west Volusia area was $327,500. That’s actually up again about $8,000 just in the last month, about 12,000 in the last three months and about 70,000 from July 2021. From a data standpoint, all this is nothing new. Next let’s take a look at how long it’s taking sellers to get their home under contract because this is where things really start to get interesting. In the month of July, it took sellers a median of eight days to get their homes under contract. Now eight days is fast from a historical context. But when you consider that the last time it took more than eight days was March 2021, well that’s a big deal. That eight days is up from just five days a month ago and up from the same five days a full year ago. Now given that nearly all of my business comes from listings, I’m really confident that this will be up even more when we have this discussion again in September. Remember, those of us in the business see things before they actually happen.

I’ve noted before that the lack of inventory is really the bedrock on which this entire seller’s market is planted. Now, oddly enough, the number of new listings in July actually decreased here in the west Volusia area. It’s odd to me because I listed more homes in July than I’ve listed in quite a while. There were 558 new listings to hit the market in July, which is actually down about 12 percent in the last month but up about 10 percent in the last three months, and up about 12 percent in the last year. Despite this month’s increase, inventory is on the rise and if the real estate market will be able to weather the storm of the recession that we’re currently facing, the lack of inventory is going to have to be what does the heavy lifting.

We’ve all heard the news that interest rates are skyrocketing. In spite of the fed’s repeated interest rate hikes mortgage rates have actually decreased from their June 23 high of 5.81 percent and at the end of July were around 5.3 percent. It’s important to note that the mortgage rates that buyers pay for their homes tend to be in line with the fed’s actions, but they don’t necessarily replicate them and this is really a prime example of that. Yes, interest rates have risen quite a bit from that 3.22 percent that they were back in early January, and I do expect they’re going to continue to rise, but rates in the low fives are still historically great rates.

So, what’s impacting our local market? Rising interest rates have influenced this market, but I really wonder how much the media impacts the way people think. Everyone I talk to seems to be an expert on how the real estate market is imploding and I wonder where everyone’s getting this information. Is it Zillow? Maybe it’s the nightly news. I don’t know, but everybody seems to be talking about it and everybody seems to be an expert. I’m not saying that our real estate market is all rainbows and unicorns because it surely is not. I’m saying that as of today things really aren’t so bad. Buyers are regaining a bit of control as sellers are now being forced to come off some of their ridiculous demands and they’re taking advantage of regular price reductions. At least that’s what I’m seeing. When you couple this with lower interest rates than we had back in June, it’s really a pretty good deal for buyers. Inventory levels remain low and that provides some balance for sellers as well. It may not be an issue moving forward but maybe you read about the federal trade commission slapping a 62 million dollar fine on Open Door for reportedly misleading their customers about the actual cost of selling their home with Open Door. It’s something I’ve heard about more than once from the public so I’m really not too surprised. If this did happen it surely had an impact on our local market. Perhaps artificially inflating the number of sales we’ve had, especially down in areas closer to Orlando like Deltona.

Finally, where’s the market heading? The purpose of this blog is to tell you where the market was at the end of the most recent month. However, there are times when I believe that this data is still out of date. July was one of the best months I’ve personally ever had for closed business, but I can tell you that things are changing. Many of my listings had price reductions and they’re struggling to get showings and offers. Now I’m afraid that those that didn’t get their homes on the market in May or June may have just missed the boat. Other professionals in the industry are all seeing a slowdown to some degree and it’s my belief that we’re going to see that show up more when August concludes. On the negative side, interest rates are sure to continue to rise and the market will face headwinds from the current recession. On the positive side, interest rates are very low, unemployment remains very low, and the lack of inventory really could provide a cushion against those negatives I spoke of.

It’s important to remember that the data that I’m reporting on is for the west Volusia real estate market which differs quite a bit from that of even east Volusia, Seminole and Lake counties. Black Knight, for instance, speaks of quite a bit of cooling that has already occurred on a national level. They note that the yearly rate of price appreciation dropped from 19.3 percent to 17.3 percent, and that 25 percent of the major US markets saw significantly slowing growth. If you have questions about the real estate market in central Florida, please feel free to contact me.

Published on August 17. 2022 / no comments.