South Florida Housing Market Update [March 2024]

Hey, it's Andy with the Mandel Team and I'm here to bring you your March 2024 South Florida Housing Market Update.

As always, for the purposes of these videos, we're going to be talking about single family homes only in Boca Raton, Parkland, and Coral Springs. Those are the areas where our team does the predominant amount of our business. And when we talk about single family homes, we're talking about all ages, no country clubs. So no townhouses, no condos, no 55 and over communities, and no country clubs.

It's been a little bit since we've done one of these videos, so I just wanted to recap what happened in 2023 and where we think the market's going to go in 2024.

In 2023 prices were up 5%, on average, compared to 2022. That is a major slowdown in price growth compared to 2022. For reference, 2022 saw a 21.6% increase in prices compared to 2021. So we're now much more in line with the historical normal range for price growth than what many people got used to during the pandemic.

My prediction is that we're going to continue to see home price growth this year in the 3% to 5% range. And that's still very healthy, but nowhere near the crazy rate of price appreciation that we saw in 2022.

Now, this all depends on interest rates.

The Fed has pushed back the date from the first expected rate cut from March, and it's currently expected that rates might drop a little in July. This all depends on the overall economy and inflation. If rates drop multiple times in 2024, that might cause the market to heat up later in the year. But for now, it doesn't appear that inflation has gone down enough for the Fed to start lowering rates yet. So let's get into the stats for February compared to February of 2023.

The first stat we'd like to look at is the number of new listings hitting the market. That is up 48%. So supply is way up. That is great news if you're a buyer. There's a lot more to choose from. There's a lot of people who have pent up demand. They want to move, but they didn't want to when the market was crazy. They didn't know where they're gonna go. But they're clearly putting their home on the market now. We're also getting into the spring selling season which normally means a lot more homes on the market.

The next stat we like to look at is the number of pending sales.

This is the number of homes that were on the market that accepted a contract and came off the market. That would be what I consider the demand. That is also up, but only 5%. So supply is up significantly higher than demand. That's going to put a downward pressure on prices. It's good for buyers. You have a lot more to choose from.

Sellers, it doesn't mean that prices are crashing. Same for you buyers. Prices aren't going down significantly. They're just going to be much more flat and as we have a lot more inventory on the market than buyers in the market. It will give you more negotiating room and Sellers are going to have to come to terms with this new softer market where they don't hold all the cards any longer.

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

So right now on average across the three cities, that's 45 days, which is much longer than what everyone got used to during the pandemic. In the height of the craziness, homes were selling on an average in 6 or 7 days. So 45 days is significantly longer than what it used to take. But historically, that's about where homes, how long it used to take to sell.

I remember in 2015, 16, 17, 30 days wasn't crazy at all. It's all just about having the right perspective and reframing your mindset of what is normal. We forgot what normal was for a while.

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

So on average across all three cities, that's 94.7%, up only .7% from this time last year. There's really no significant change. Buyers have been able to negotiate about 5% off the original list price. Now keep in mind buyers and sellers - this really depends on the property, the neighborhood, the location, and the condition.

If a property is listed, if it's worth $500,000 and you listed at $250,000, obviously it's going to sell significantly above the asking price. So it really depends on the property, how it's priced. Typically, if it's priced well - fully updated, modern, turnkey houses are still selling fast and for a premium - but it really just depends on the house.

The next stat we like to look at is arguably the most important. And that's the month's supply of inventory.

What that stat tells me is if no more homes were to come on the market - if there here was no more supply - at the current pace of sales. How long would it take for all of the homes on the market to go under contract and sell? So anything less than five or six months is generally considered a seller's market. Anything more than six months is generally considered a buyer's market, and five to six months is generally considered a neutral market.

So in Boca, we have 4.09 months of inventory. Thats much closer to a neutral market than any of the other cities. So that's much closer to a neutral market than any of the other cities.

Parkland is 0.23 months of inventory.

So less than one week of inventory in Parkland and 2.

So on paper, Parkland is a very strong seller's market. Coral Springs is still a strong seller's market.

Boca is much more neutral, but what I'm seeing is for reference, when the market was at its craziest moment, all three of these cities were under one month of inventory.

So currently right now, it certainly feels like more of a buyer's market than the numbers would indicate, at least from our experience on our team, homes are sitting for much longer.

There aren't anywhere near as many buyers as there used to be. And a home has to be priced really well in order to sell.

Again, it depends on the home.

I've seen a lot of times where if you price a home really well and it's a good location and it's priced accurately, it still sells fast and with multiple offers.

But it really depends.

If you're a seller, what does this mean?

You gotta have an honest conversation with yourself on what your house is actually worth.

You really can't just have that number in your head, Oh, I'll only sell if I get this price. I really want to get this.

We all want a lot of things, but if it's not in line with where the market says the home is worth, I'm telling you right now that home is going to sit on the market, you're not going to get offers, and it's not going to sell.

That's just where the market's at.

Buyers, what does this mean for you?

Well, it does not mean that you can go in there and lowball the hell out of every seller and expect to get, you know, homes for 80%, 70 % on the dollar. That's just not the market that we're in either.

You have to be realistic, but the buyers are starting to get more of an upper hand than what they've had over the last, you know, a couple months.

It still, again, depends on the house, depends on how it's priced, but there's good negotiating room for buyers.

There's a lot more to choose from now than what you may have gotten used to over the last couple years and last couple months.

So if you've been putting off buying a home and we're getting to the spring selling season, there's going to be a lot more buyers coming out.

There is more to choose from, so don't get discouraged based on, you know, what happened last year or the last couple of years.

There's good properties on the market. You're able to get a much better deal.

Depending on the property, you might still be able to get the seller to cover some of your closing costs or buy down your interest rate, whatever you might want.

And there's always the hope that you might be able to refinance if and when rates drop later in the year or into 2025.

The general rule of thumb to refinance, rates have to drop about 1 % from where your rate is currently for it to make sense to refinance.

So, it just depends on how fast rates do drop when they drop.

But there are good deals to be had in this market if you're aggressive and you're out there writing offers and looking at property.

So hopefully that helps.

If you have any questions on the housing market, we'd love to be your realtor of choice.

If you're moving here to South Florida, remember we got your back and I'll see you next month.