25 August 2023
I suppose I should make some comment on the current state of the real estate market. The first half of 2023 is in the books. Looking at the rate of sales June 2022 compared to June 2023, overall we can say that the rate of sales statewide is down by 8%. The mortgage interest rate has increased in that time period from 6.5 to 7.0 %. Today as I write the rate is reported at 7.37%. That is at a 20 year high.
Sales in the state of Florida are at 135,000 which is down 16% compared to the same time for 2022. Single family homes are down by 32.5% compared to the same period of last year. New listings are down 27.4%, June year over year. End of month inventory is up by 14%. Inventory continues to lag driven by a decrease in demand. Detached homes held their value at $420,000 average across Florida.
Closer to home Tallahassee, June 2022 compared to June 2023 reflects closed sales of 388 against 473 for the previous year, That is a decrease of 18.0%. However, the average sales price was $390,142 (’23) against $352,821 (’22) an increase of 10.6%. That is driven by the prevalence of lean inventory driving multiple offers.
Median time to produce a sale 31 days compared to 22 days in the same period one year ago. New listings fell from 549 in ’22 compared to 442 in ’23. That is a decrease of 19.5%. Inventory is at 2.8 months compared to 2.4 months a year ago, an increase of 21.7%.
In the Tallahassee zip code 32309 which incorporates Killearn Estates, where I live, the following is observed. Closed sales through June ’23 were 42 compared to 45 one year ago. That is a decrease of 6.7%. The average sales price in June ’23 compared to one year ago was $521,725, June ’22 was $424,942. That is an increase of 22.8%. That is a matter of lean inventory being chased by steady demand. The median time to contract was 31 days June ’23 vs 18 days June ’22. That is an increase of 72.2%. The inventory increased from 3.2 months supply from 2.5 months. That is up 28%.
In the Tallahassee zip code 32312 which incorporates Killearn Lakes/Golden Eagle the following observations are made. Closed sales June ’23 were 44 compared to 71 June ’22. That is a decrease of 38%. Average sales price in June of ’23 was $539,277 compared to $493,031. That is an increase of 9.4% in value. The median time to contract was 27 days in ’23 compared to 20 days in ’22. That is an increase of 35%. New listings were 60 in June of ’23 compared to 92 in June of ’22. That is a decrease of 34.8 %. Inventory was 2.7 months in June of ’23 compared to 2.2 in June ’22, an increase of 22.7%.
It is absolutely a poorly held secret that real estate across Florida and in our town is in decline. Is that to say it is a correction? Perhaps one could build a case in that direction. We have been in a boom market since we came out of the last recession which was driven by the lowest mortgage rates in history. Once the market adjusts we will see a whole new way of the world in the real estate market. We are already seeing agents leaving the business. Brokerages are closing up. Some are saying that we are in a housing crisis across Florida. It would be hard to argue that point. Increases in homelessness, availability of homes for sale or lease, increase in people coming to our state, etc. all put stress on the real estate market.
The legislature in 2023 passed the Live Local Act which set aside $811 MM immediately and $1.5 billion over 10 years to address affordable housing. Expansion of the Hometown Heroes Housing Program was part of that legislation. Much more must be done.
Property insurance is in crisis driven by higher demand and fraud is making getting a mortgage more challenging. It costs you nothing as a buyer to utilize the services of a realtor. As a seller there are many issues which go into to setting the price, staging property, negotiating a seemingly endless stream of questions and challenges. You will make more profit and sell your home quicker by taking the professional with you.
This broker has been in the business for more than 20 years. He has spent more than 50 years as an executive operating here in Florida. Call me for a free consultation when you decide to buy or sell.
Lee Vass, Broker-Owner