South Florida Housing Market Update [June 2022]

The shift everyone's been talking about and waiting for in the South Florida real estate market, is starting to happen. Hey, it's Andy Mandel, with The Mandel Team at RE/MAX, and I'm here to bring you your June 2022 housing market update. As always, for the purposes of these videos, I'm going to be talking about single family homes only, in Boca, Parkland, and Coral Springs. That's the area where our team does the predominant amount of our business. No country clubs, no townhouses, no condos, no 55 and over. So let's get into it.

The first stat we like to look at, is the number of new listings hitting the market. The supply. Now that's down only 1%. So we're not seeing a ton of new listings, but we're also not seeing a decrease, which is what has been going on basically for the last two years. Every single month is fewer and fewer listings compared to the same time the year before. It's basically flat right now depending on the city, but on average, down about only 1%. Here's the kicker. At the same time, the number of pending sales going... So those homes that were listed that went under contract and came off the market, that's down 26%. So way fewer homes selling compared to the number that's coming on the market. This is kind of what we've been talking about, waiting for this to happen, as interest rates really, really shot up this year. They're up a little over 2% since the start of the year. Buyers have, a lot of 'em have left the market. They say, "I can't afford to buy at these interest rates, "or I don't want to buy at those interest rates." We can have a separate conversation about that, 'cause these are still historically very low, but we're seeing fewer sales happening now than we're happening last year. So the frenzy has definitely slowed down.

The next stat we like to look at, is the number of days on market. That's remained the same at seven days. So it's not taking significantly longer to sell yet, but we think that as it continues to go on, as the year goes on, that it's gonna be a little longer of a process than we were used to over the last two years, homes selling in one or two days. The next stat we like to look at is the close sales price to list price. This is a backwards looking stat, because what closed last month in May of 2022, really went under contract likely in April, maybe even March of 2022 before interest rates really, really shot up. So that closed sales price to list price was 101.4%. So the market is still really, really strong. We're not seeing massive price reductions and prices coming crumbling. Buyers are still have to be competitive in this market. Here's the most important stat that we like to look at, and that's the month's supply of inventory. That's actually up to about 1.5 eight months on average between the three cities. That's about 0.4 months higher than it was last month, and as high as I can remember seeing it going on close to two years now. Part of that's to be expected.

This is the time of year when many people are putting their homes on the market to move between school years. But it also shows that since there are fewer sales going off the market, the available number of homes is increasing, which means more options to choose from. As the year goes on, I think this number's are gonna go up even further, probably closer to two, maybe two and a half months of inventory, which will be double the inventory that we've been seeing for basically the last two years. Does that mean the market's crashing?

Absolutely not. It just means it's getting less competitive, and there are more options to choose from for buyers. We're normalizing, not crashing. A neutral market is six months of inventory. So even if we get to that two to two and a half months, we're still very much in a seller's market, and still, probably less than what we were seeing pre-pandemic before Corona and in this whole craziness in the market, we were seeing three to three and a half months of inventory. So we're still in a seller's market, but it's getting much closer than we've seen in a long time, to a more neutral market.

From my experience on my own listings recently, things that would normally get about 10 plus offers in January or February, or anytime last year, are now getting two to three in the last month. I'm seeing way fewer crazy offers where people are paying significantly above appraised value or waving the appraisal, and all the other crazy terms that the sellers were getting before. And I think that continues into the summer and fall, which is great for the market. What was going on before, was definitely not healthy or fair for buyers. And this is a good reprieve for the market. I'm seeing a lot of price reductions from sellers who had unrealistic expectations from the beginning. Last year, you could literally take the highest sale in your neighborhood, add 5% to that price, and you'd still get multiple offers. While that still may happen occasionally, it's way less infrequent recently, and sellers that have that mindset from the start, are starting to come to reality. Those are the homes that we're starting to see have price reductions. It's the unrealistic sellers from the beginning. The sellers that price their homes competitively from the start where the comps say it should be, and where you know it's going to appraise, they're still selling quickly, and for a great price. Interest rates have also come down slightly from their recent highs. If you're a buyer trying to time the market, now would be a good chance to scoop in, to come in, scoop up a home while interest rates are down a little bit.

As the year goes on, rates will continue to increase, and we think substantially, and affordability will end up being worse. If you're a seller, take advantage of the market while it's still really good, and take advantage of this dip in the interest rates. While we think the market's still gonna be good all year long, and we are definitely not predicting any sort of crash, waiting until there's even more inventory and interest rates are even higher, will only make the sales process drag out longer. And we think by the end of the year, the days on market is gonna go up a lot more. It's gonna take a lot longer to sell a home than what people have gotten used to in the last two years, with things selling in literally one day with 15, 16 offers. This is a great time to be a buyer and a seller. If you've been on the side lines, now is your time to make a move. If you have any questions about how this affects you, and any questions about the south Florida real estate market, make sure you give us a call, shoot us a text, or send us an email. We got your back when moving in south Florida, and I'll see you on the next video.