A famous philosopher (Green Day) once said, “Wake me up when September ends”, but seems as though our local real estate market isn’t going to sleep. It seems like it just keeps chugging along.

The median sale price of a home here in Central Florida as of the end of September was almost $340,000. That is down from $355,000 last month, which IS a notable decline, but it’s been hovering around this number over the last year and is up from almost $319,000 back in January when everyone was freaking out about rising interest rates.

Speaking of interest rates, September ended with the highest interest rates we’ve seen in some time, at 7.44% as the Fed has had only moderate success slowing the economy. Yes, inflation has slowed, but other factors such as unemployment have refused to budge, keeping mortgage rates high.

The evening news keeps telling us how bad the real estate market is BECAUSE OF these high rates, but homes are still selling. I suspect that interest rates won’t come down until unemployment rises, which will leave some that are waiting for lower rates (now unemployed) to look for homes when they cannot afford them.

A lack of availability of homes for sale persists as we currently have just two months’ worth of housing available before all the homes available are gone. A stable market is SIX months’ supply. This tells us that despite stable housing prices and increasing interest rates, demand still exceeds supply.

At the end of September, it is taking Sellers a median of 16 days to accept a contract on their residential home. That’s fast! It is up from about 5 days back in the spring of 2022, but over the last 10 years, a 40 or 50-day period was not a problem.

Of course, the market could crash, but people have been waiting for that to happen since 2018 and those that waited are still paying the price. Back in the 80’s buyers purchased homes at 16.63% and MADE MONEY doing it! These buyers simply refinanced when interest rates came down.

Given the historical returns of around 4%, prices are right about where they’re supposed to be. So many still lament that prices are over-inflated, and I feel their point from an emotional perspective, but the data simply does not support it.

Published on October 10. 2023 / no comments.