West Volusia Monthly Market updateJune 14, 2022 | By Chuck Shaver
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, what JUST HAPPENED in our local real estate market is something you’re going to want to hear about. Today I will 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 May 31, 2022.
The median sale price here in the West Volusia area of $316,000 was up just $1,000 over the last month, but it was still up $21,000 over the last 3 months and those of you that purchased in June of 2021 are up about 19% equity in just one year! There’s no huge news here, but that smaller increase over the last month appears to show that things are slowing a bit here in this area.
It took a seller a median of 6 days to get their home under contract. This is one day slower than last month and one day slower than a year ago. Again, no huge news here, but it’s a second piece of data that shows things have slowed just a bit.
At the end of May we had 466 homes on the market that were available for buyers. Now, that’s a VERY low number from a historical context, but that is 65 more homes that were available at the end of April – now THAT’S BIG news! That’s a 16% jump in just one month and a 10% increase in 3 months, putting us back where we were at the end of June 2021.
The other data I shared suggested that there MIGHT be changes in our market, but this says the same thing in spades! If you’re a buyer, it’s a bit of welcome relief as now you’ll have more than ONE home to choose from. If you’re a seller that’s sitting on the fence it should be a wake-up call to make a decision IF you’re thinking of selling.
At the end of May Freddie Mac’s interest rate was 5.1%, that’s actually down a bit from where it was in the middle of May when it crested at 5.3%. Take a look at this graph and you’ll see that the rates at the first part of March were just 3.76% and those same rates were about 3% a year ago. Of course, there are ups and downs in any market, but the upward trend is now clear.
So, it’s pretty clear to most of us that the interest rates are having an impact on our market that data can show. You may remember last month that I wrote about how we “Felt” changes, but weren’t seeing them – well now we see them in stabilizing prices, more days that it takes to get a home under contract and a huge increase in inventory. It seems that everybody is sounding alarms about inflation, putting additional pressure on The Fed to “fix it”. Let’s just hope they can do that without sending the economy into a tailspin by overreacting.
With all this doom and gloom, we should be expecting this bubble to pop and head to another recession, right? Well…no… First, I don’t believe we are in a bubble and most of what I’m reading says that an economic slowdown should be slow to come. However, some, like Elon Musk believe we’re already in a recession and there are others that believe this is the case too.
A recent article by Fannie Mae says that we still have a housing shortage that will take TEN YEARS to burn off. If that’s the case then I’m feeling even better about our future, although that’s a bit more optimistic that I really think will be the case. However, that ten years could help to insulate the housing market from the impact of a coming recession.
Although rising rates are a hindrance to buyers, many buyers may benefit from a market stabilization in spite of higher rates. For the last couple years, sellers have been VERY reluctant to help with buyer’s closing costs, making it more difficult for them to get into a home.
As buyer’s regain some control of the market, sellers will have to re-think this old way of thinking if they want to sell their homes. These higher rates and higher prices have ALREADY priced many buyers out of the market, but that will change as supply and demand stabilizes and works its magic. I do expect that interest rates will continue to rise and that these rate hikes will help to stabilize our market for the foreseeable future, barring some weird catastrophic event.
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.