South Florida Housing Market Update [July 2023]

Hey, it's Andy with the Mandel team at re max, and I'm here to bring you your July, 2023 housing market update. As always, for the purposes of these videos, we're talking about single family homes only in Boca, Parkland and Coral Springs. Those are the areas where our team does the predominant amount of our business. And what we're doing is we're giving you the leading indicators, showing you where the market is headed, not where it's been. So we're not gonna talk about closed sales price because if something closed last month, realistically it went under contract 30, 60, maybe even 90 days ago. And that's a lot of times what you end up hearing from the media. We're telling you what happened right now last month, so you know where the market is headed, not where it's been. So let's get into it. The first stat we like to look at is the number of new listings hitting the market or the supply that is down on average between the three cities, 46.6%.

So we're seeing way fewer homes hit the market and we'll talk about why that is. Towards the end, the next stat we like to look at is the number of pending sales. So the demand, how many homes are going under contract and coming off the market. That's down only 2% from this time last year. So you're seeing way fewer homes hitting the market, but demand even with interest rates significantly higher than it was last year. You know, demand is basically flat compared to supply. So with way less supply and demand staying the same, you're going to see an increase in prices. That's just what it is. So the next stat we like to look at is the number of days on market. So last year that was 11 days. In 2023 it was 22 days to sell on average. So it's taking twice as long.

That's still not a lot of time, realistically. And you know, if you're in this market, if you've been shopping around, I'm sure you've probably seen the good houses, the ones that are fully updated or in good neighborhoods, good lots, you know, all the things that would make a home desirable. Those homes are selling significantly faster than 22 days. Still, you know, 1, 2, 3 days with multiple offers is really what we are seeing. The next stat we like to look at is a backwards looking stat, but I think it's important to know. So this is the closed price to the list price. So that is 96.4% in June of 2023 compared to a hundred percent in June of 2022. So we are seeing buyers get a slightly better deal. Sellers are coming off of their list price a little bit more so than they were last year, but that's still not a significant discount.

Homes aren't selling for, you know, 70, 80 cents on the dollar. Sellers are still getting very, very close to their asking price on average. So the next stat we like to look at is the number of months supply of inventory. So what this stat tells me is, is it a buyer's or a seller's market? In a balanced market, you'll see six to seven months of inventory. Right now between the three cities we see 2.46 months of inventory. So that's still very much a seller's market, but even that stat is a little bit skewed because it really depends on the city. Boca has 3.33 months of inventory. Parkland is just 0.2, two months of inventory. So that is one week of inventory in Parkland. And then Coral Springs is 1.38 months. So during the pandemic, when the market was

Really just about every city was give or take one month of inventory, we're still seeing that in, you know, Parkland and Coral Springs. Boca has significantly more inventory. So you're gonna see on most houses on average, you're gonna see a little bit more wiggle room for a negotiation in Boca because there's more inventory. But across the board this is still a seller's market by far. Like I was saying, six months is a neutral market. So anything less is a seller's market. At 2.46 months, we really are still very much in a strong seller's market. So what does this mean? Well, let's talk about why we're in this situation. When the pandemic happened and interest rates went to crazy historic lows, below 3%, everyone refinanced. So 80% of homeowners in America either have no mortgage or a mortgage rate less than 5% with a very large number having an interest rate in the twos and threes.

So think about it, with rates now between six to 7%, depending on the day as they do change every day, it's gonna take a lot for people to want to sell a home with a 2.75 interest rate, a 3.25 interest rate and then buy up a different house at six and a half percent. You really gotta be motivated to do that. So what we're really seeing is a lot of sellers saying, I'm just gonna sell, put I'm trapped in my current house. Maybe they still need to, you know, they would love to sell their house and buy something bigger or better for their family, but they just, it doesn't make sense. They, it's hard to justify trading in a 3% rate for a six and a half percent rate. So a lot of people are choosing not to put their home on the market, which is really making this inventory problem that we've had since the pandemic much, much worse.

So, you know, almost 50% fewer homes on the market this time of year compared to last time with demand staying basically the same. Yeah, there's a supply and demand and balance for sure. Way fewer supply than demand, meaning home prices are going to appreciate. And what we are seeing in our business is that the good houses that are priced correctly, they're fully updated in good neighborhoods. All the things that would make a house desirable, those houses are selling with multiple offers still above the asking price. You know, it's still very, very competitive for those properties. So if you're a seller, don't be scared. You know, if you do have to make a move, obviously the numbers have to make sense, but we can walk you through that to see if it does make sense and it's something that you can afford on that next property note, if and when rates do drop in a year or two, you're gonna be able to refinance cuz prices are going to be up compared to where they are right now.

As long as you're still employed and you still have income coming in, you'll be able to refinance. Take advantage of the lower interest rates when they are here. It's the same for buyers. Don't think about just an interest rate. If you can afford the payment, you'll be able to reduce that interest rate in the future. But whether you're paying your mortgage or someone else's mortgage, your landlords, you're still paying the mortgage, you might as well lock in the price for your house Now cuz prices are going to continue to go up if all these things remain the same and there's really nothing in the market that says this is gonna change. So if you gotta buy or sell, it's still a very good time. Let us walk you through that process. We can help you make an informed decision. Whatever's best for you is really what we want. So if you're looking to buy or sell in this market, make sure you give us a call, shoot us a text, or send us an email and always remember we got your back. We're moving to South Florida.