South Florida Housing Market Update [June 2023]

Hey, it's Andy with the Mandel Team at RE/MAX. I'm here to bring you your June 2023 Housing Market Update.

As always, for the purposes of these videos, we're gonna be talking about single family homes only. No condos, no townhouses, nothing in a 55 and over community, and nothing in a country club. Those are definitely different markets.

And when we give you these stats, we're giving you the leading indicators, showing you what happened in the real estate market last month so you know what's gonna happen this month and next month where the market is headed, not where it's been.

When you hear these stats from the national media, typically what they're telling you is closed sales price, which is really indicative of what happened 30, 60, sometimes even 90 days ago. So we're giving you the leading indicators showing you 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. That is down 31.4% from May of 2023 compared to May of 2022. So we're seeing fewer homes hit the market, which is making the supply shortage worse. And when you think about it, almost everyone who has a mortgage refinanced, if they own their house pre-COVID or during COVID, they refinanced and then got an ultra low rate.

Most homeowners in America either have no mortgage or they have a sub-4% rate. So it's very difficult to want to sell your house with a 2.75, 3.5 rate and then wanna move up and buy something bigger with today's prices and today's interest rates.

So people are staying put and they're not putting their homes on the market, and that's partially what's making these prices go up. It's in imbalance in supply and demand.

The next stat we like to look at is the number of pending sales, so homes that are going under contract.

Believe it or not, even though a lot of people are saying, "Oh, the market's slow, there's no buyers," pending sales are up 11% in May of 2023 compared to May of '22. So way fewer homes on the market, but more homes going under contract because people still want to move.

People are moving to Florida in droves. There are still homes that are selling and there's way more demand than there is supply. Obviously that's going to lead to a continued increase in prices.

The next stat we like to look at is the number of days on market.

So in May of 2023, that was 23 days, so that's up from 13 in 2022. So fewer homes coming on the market, more home selling, but it is taking a little longer than it was last year. The good homes, though, they are still selling in record time one day, two day, three days. If they're priced well in good neighborhoods, you know they don't back up to a major street and they're relatively updated, those homes are still selling very quickly.

The next stat we like to look at is the closed price to original list price.

And so this is, to be fair, a backwards looking stat. But I like to look at the close price to original list price to factor in price reductions.

So in May of 2023, the close price to original list price was 97.8%. In May of 2022, it was 98.9%. So buyers are negotiating a slightly better deal this year on average compared to in 2022.

Now the next stat we'd like to look at is the number of months supply of inventory. This is what I think is the most important stat.

So on average across the three cities, we're seeing 2.36 months of inventory. So a balanced market is where there's six months of inventory, meaning if no more homes hit the market, how long would it take for all the homes there to sell? A balanced market is about five to six months. We're currently at 2.36 months on average.

During COVID, we were at one month or less. There were a lot of months where on average across those three cities, we were seeing two weeks of inventory. So really, really low inventory.

There is slightly more inventory on the market right now, but it really varies from city to city. For example, Boca has 3.13 months of inventory at the current pace of sales. Parkland, .22 months of inventory, literally one week of inventory in Parkland at the current pace of sales. And Coral Springs is 1.38 months. So, a seller's market in all cities, but Boca definitely has more inventory, and what I'm seeing anecdotally in our business are the listings that we have and the buyers that we have looking in Boca, they're taking longer to sell, there's more price flexibility in Boca than we're seeing at least in Parkland and Coral Springs. So it really depends on what city you are looking in.

You know, how good of a deal are you really gonna be able to negotiate?

Boca, if there's more homes for sale, it's gonna have a little more flexibility than a Parkland or a Coral Springs as far as what you can negotiate as a buyer, can you negotiate a better deal? So what does this all mean?

If you're a buyer, it's still a good time to buy a house if you need to buy a house. You shouldn't buy just for the sake of buying to rush in and get FOMO. But prices are continuing to go up.

We're not seeing any sort of crash, any market slow down whatsoever in this market here in South Florida. Prices bottomed at the end of, you know, probably beginning of January. And if you look since February, the number of sales has continued to go up. It's more than it was happening this time last year. So we're seeing a lot of buyer activity there.

If you are thinking about getting in the market, buying sooner than later is gonna be in your best interest, 'cause the longer you wait, the higher prices are going to continue to go.

You know, I'm not protecting a 25% price appreciation this year like we were seeing in those crazy years of COVID, but I think three, four, 5%,, which is historically very normal, is very likely in this market here in south Florida.

We have 1,000 people a day moving to the state of Florida, with the majority of them coming to southeast Florida and the Greater Miami region. We have the Everglades to the west, so you can't build on the Everglades. We have the ocean to the East. You obviously can't build on the ocean. So we just are land constrained.

Supply and demand says that we're going to have an increase in prices as more people come here and there's just not enough homes for all the people who live here.

As a seller, what does this mean for you? It's a great time to be a seller. If you're thinking about selling and moving up, buying a bigger house. Ideally, if you own a house that, you know, you had rented out for years, the price has gone up 150%, you know these crazy price appreciations. If you don't need that house anymore, it's a great time to capitalize, take some money out of the game, sell it to a family who would really like to be there, and you know you're gonna get multiple offers if you price the house correctly and do all the crazy marketing things that our team does to market our properties, you're gonna get a really good price.

So the best sellers right now are the ones who, you know, have, they've already bought a house maybe in a slightly cheaper location, or they've relocated outta the area and they just don't need the house. They don't want the headache of being a landlord. Now is a great time to capitalize on the continued demand of buyers here in South Florida.

If you have any questions about the market, whether you're buying, selling, renting, or investing, feel free to reach out to us, give us a call, shoot us a text, or send us an email. Always remember we got your back when moving in South Florida.