REAL ESTATE MARKET UPDATE FOR WEST VOLUSIA | AUGUST, 2022September 16, 2022 | By Chuck Shaver
Is our local residential real estate market imploding? I’m going to reveal the FACTS about the numbers of our local real estate market and that will reveal the damage or growth. I’m Chuck Shaver with The Shaver Group at Keller Williams Heritage Realty and today I will be addressing the residential West Volusia real estate market including Deland, Deltona, Debary, Lake Helen, and Orange City as I review the market for the month ending August 31, 2022.
First, we see that the median sale price of a home here in West Volusia fell to $325,00 in August. That’s down just $2,500 in the last month, which isn’t huge news even though we’ve had just one other similar decrease in the last 2 years. That $325,00 is still up $6,500 in the last 3 months and up $55,000, or about 20% in the last year. Historically, we’ve seen about a 4% appreciation in real estate values year over year, so dropping just $2,500 in a month is really pretty insignificant. Do I expect we’ll see more decreases? YES, I’m sure of it.
Next, it took a seller a median of 11 days to get their home under contract in August. Now, you may be thinking that that is a very short period of time, and it is, but that 11 days is up from just 8 days and up from 6 days a year ago. Yes, it’s taking almost twice as long to get an acceptable contract, but when we look at the big picture, 11 days says that we still have a strong real estate market.
Those of you that have been following me for some time know that I’ve been preaching that inventory, or the lack of it, would be our best hope for a cushion for whenever the market cools off. Well, we’re now starting to work on changing that lack of inventory issue. At the end of August there were 942 homes available for purchase here in this area. That’s up from 924 homes in the last month-no biggie, right? Well, that’s up over 50% in the last 3 months and over 60% in the last year.
Freddie Mac’s interest rate at the end of August was 5.66%, that’s up from 4.99% in the last month, and up from 5.1% at the end of May, both of which are insignificant increases. Of course, a year ago these rates were below 3%. I’m all about being realistic. As such, this is a huge increase in the last year; however, if we’re doing to look at all the facts, then we must also acknowledge that rates in the 5’s are FANTASTIC interest rates from a historical perspective.
So, what’s impacting our real estate market? It’s surely not unemployment, which remains under 3%, well under the 3.5% national average. Of course, the rise in interest rates is the obvious culprit, but there are others playing some role including the War in Ukraine and the psychological and practical impacts of the national debt we’re incurring and inflation, which I believe has finally made one small step in the right direction. Although I spoke before of the big increase in housing inventory, I believe we’re still running low on options for buyers, which continues to add strength to our local market.
Where is the market heading? If you watch the nightly news, the real estate market is destined for doom, along with just about everything else, so I don’t watch too much of that. However, what I read on a daily basis has a mixed bag of opinions on where the market is heading. Inflation is the key. IF, and that’s a BIG IF, we can get inflation under control, then we could avoid a significant housing crisis. On the other side of that coin, if Florida’s insurance carriers’ ratings are downgraded as expected, and Florida doesn’t have a plan to fix it-and QUICK LIKE-then it could get pretty ugly. I have to believe they’ll come up with something BEFORE that happens. Because I believe that they WILL come up with a plan, I’m not too worried about our market in the long term, although I do expect more price decreases and it taking longer for sellers to sell their homes for at least the remainder of 2022.
If you have questions about the real estate market here in Central Florida, please feel free to reach out to me by phone or email.