Florida Housing Market Update: March 2023

Buckle up, my friends, because the world of mortgage rates has taken us on quite the rollercoaster ride. Just last year, the 30-year fixed mortgage rate in the United States soared from a modest 3% in January to a jaw-dropping 7% in November. It was as if a giant wet blanket had been tossed on the sizzling housing market. This sudden spike threw a curveball at both homebuyer demand and the rate of new listings, casting a shadow on the real estate landscape.

In this fast-paced world of real estate, we've seen it all. Sales activity throttled down throughout the year, and not even sunny Florida was spared from the turmoil. As we step into the time machine to 2023, we find the 30-year rate finally easing off its stratospheric heights of last November, but it has comfortably settled within the 6% to 7% range for the past four months. Consistency, my friends, is a reassuring balm for potential homebuyers, taming the wild uncertainty and coaxing them back into the market.

Yet, let's not kid ourselves; sales levels remain a tad lackluster compared to the previous year. In January, Florida witnessed a sharp 33% drop in closed sales of existing single-family homes, sending shivers down the spines of many. This improved somewhat to just over a 21% dip in February. However, in March, the numbers started looking a bit more appealing, with closed sales slipping by only 15% compared to the previous year. But hold on, there's a twist!

Reading Between the Lines

The reason behind this mellowing of year-over-year deficits in March was partly because the housing market was already showing signs of fragility in March of 2022. Yes, you guessed it, house sales were stumbling back then too. As mortgage rates continued their ascent last year, demand withered away as we danced through the summer and waded into the year-end storm when rates flirted with 7%.

What does all this mean for the real estate enthusiasts? Well, when we scrutinize the year-over-year changes in sales this year, brace yourself for some astonishing improvements. But let's not forget the fine print - much of this apparent improvement is the result of comparing it to the wobbly 2022 market, which was on a steady descent.

In essence, what we're saying is that to gauge our true progress in 2023, we need to use our trusty benchmark, the last full pre-pandemic year of 2019.

A Dance with Pre-Pandemic Ghosts

As we journey through 2023, the sales of single-family homes in February revealed a mere 2% difference compared to February 2019. But when March came around, the winds of change blew stronger, showing a 4.6% increase compared to March 2019. You see, the real estate market has a peculiar way of staying in step with its pre-pandemic self, at least for single-family homes.

In the townhouse and condo category, it's a bit of a seesaw. Sales took a 23.5% tumble year-over-year in March, but before you despair, it's essential to note that this was an improvement when compared to the two preceding months. Additionally, the figures from March 2019 look more promising, with sales up by over 8%.

Inventory Wars and Price Growth

Let's talk inventory, shall we? In both the single-family and townhouse/condo categories, inventory levels have remained higher than a year ago. Single-family inventory surged by an astonishing 116%, and townhouse and condo inventory clocked in at 108% higher. While these numbers might sound intimidating, it's crucial to remember that we're still a far cry from pre-pandemic inventory levels.

As a result, price growth hasn't quite thrown in the towel; it has merely taken a breather. In March, the median price for single-family home sales closed at $405,000, showing a modest increase of just over 2% compared to the previous year. Meanwhile, the townhouse and condo category experienced even more vigor, with the median sale price climbing nearly 4%, reaching $320,000.

A Local Twist

Now, you might be wondering, "What about my local market?" Don't fret; we've got you covered. If you're a member of Florida Realtors, you can easily access the latest market data for your specific area at SunStats.FloridaRealtors.org. We're delving down to the nitty-gritty, right down to city and zip code levels.

So, as we wave goodbye to this chapter, remember - in the ever-evolving world of real estate, surprises await around every corner. Mortgage rates may be on a wild ride, but the real estate market's heartbeat remains strong, adapting and thriving in the face of change. Stay tuned for more exciting developments, and I'll see you next month. Get ready for another thrilling ride!