Real Estate Market Update for South Sarasota
West Central Florida’s real estate market continues to be pulled by counterbalancing forces. Inventory is low and people continue to migrate to Florida in record numbers. Interest rates are fluctuating between 5 ½ and 7% which is about average for a 50 year period but they still feel high after record low rates below 3%. Prices seem high but have remained strong because of low inventory and continued population growth. Let’s look at these factors individually
There are three times as many homes for sale in March 2023 as there were last March. Many current homeowners are hanging onto their current home with the sub 4% mortgage which has tempered the increase in inventory. It will take years and some life event to get them to accept a new home with a significantly higher rate. New home construction has increased helping to increase the supply of homes
Home sales are improving on a month to month basis as the impact of the hurricane fades and the spring season sees sales peaking. In addition to seasonality, it also reflects the need of new Floridians to find a place to live. One factor depressing home sales is the pullback of first time homebuyers, with the double whammy of relatively high interest rates and continued strong home prices. Either one would have caused them to pause, but the two together make it very difficult. Now they have an issue of both coming up with a higher down payment and then accepting higher monthly interest payments. This is a temporary pause for this group and when they return, we’ll see sales increase.
Finally , prices have remained stable since May 2022 when the average price topped out at $440,000. Since then prices have fluctuated between $424k and $386k. We do not anticipate a large price drop in the next 12 months as we continue to work our way toward a better balance between supply and demand.
So what does that mean for the home buyer or seller. I would suggest that the next 12 months represent a relatively stable time in the real estate market. You should be able to sell your home for a reasonable price (significantly more than 2-3 years ago) as well as buy a home with stable pricing and reasonable rates by historical standards. When anticipating a major purchase/sale like a home, stability is a good thing.