South Florida Housing Market Update [July 2024]

Hey, it's Andy with the Mandel team and I'm here to bring you your July 2024 housing market update.

As always, we're going to be talking about single family homes only. So no condos, no townhouses.

We're going to be primarily focusing on Boca, Parkland, and Coral Springs. That's the area where our team does the predominant amount of our business.

So when we talk about these areas, we're talking about no country clubs, no 55 and overs, we want to give you the leading indicator showing you what happened in the real estate market last month, so you know where the market is headed, not where it's been.

A lot of times when you hear these stats from the media, you're hearing about you know, closed sales price, which is really indicative of what happened 30, 60, sometimes even 90 days to go.

We're telling you what's going on right now, so we can talk about where we think the market is headed based on real stats. nSo let's get into it.

The first step we like to look at is the number of new listings hitting the market. That would be the supply. Now across all three cities on average, that's up 15.11%. So we are seeing more homes hit
the market, which is a great thing. Buyers always want to have more to choose from. So it's good to have more options.

At the same time, pending sales, so the demand, the number of homes that are going under contract, across all the counties, because it varies city by city, the swings are too dramatic.

For Broward and Palm Beach County, the average is up 4% compared to last year. So there are 4 percent more homes selling this year than there were last year.

That's contrary to what a lot of people have been thinking or hearing in the media.

We are seeing in this part of South Florida, more home selling compared to last year. Remember, real estate is hyperlocal. So we are seeing way higher inventory, way lower demand in the areas like Fort Myers and Cape Coral. But in Southeast Florida, 4 percent increase in the number of homes going under contract.

The next stat we like to look at is is the number of days on market now on average, that is 26 days up from 20 days last year.

So homes are taking a little bit longer to sell as there's more inventory. there's more for buyers to choose from. They want to see more houses before they're ready to pull the trigger, which is understandable. If the options are there, why wouldn't you look at them? So it's taking a little bit longer to sell a house now than it did last year.

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

I like closed price to original list price because it factors in potential price reductions.

So right now we're seeing 94.9% which is down from 96.9% from last year.

So in 2024, buyers are getting a slightly better deal. Sellers are a little bit more negotiable as far as price goes, or at least the ones that are closing, they are having to be a little bit more negotiable. So buyers are able to get a slightly better deal now than they were last year.

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

So this is arguably the most important stat.

This shows if no more homes were to hit the market, if inventory stopped coming on the market, how long would it take for all the properties on the market to go under contract?

They say a balanced market is somewhere between five and six months of inventory. Anything less than five months is a seller's market. Anything more than six months is a buyer's market.

So Boca, we're seeing 4.3 months in inventory, Parkland 3.1 months in inventory, and Coral Springs 3.55 months in inventory.

So what does this mean? We're much closer to a more neutral market, especially in Boca than we've seen in a very long time.

Parkland and Coral Springs still definitely a seller's market, but nowhere near as strong as we were during the crazy heights of the pandemic.

Sellers have to be much more realistic about the price that they're willing to sell their house for. The days of just naming your price are over and homes aren't flying off the market.

Pre pandemic, we were sitting around the same inventory levels three to four months of inventory, give or take. So we're right back to where we were pre-pandemic as far as inventory levels go at the current pace of sales.

You know, no one said that the market was crashing and the sky was falling in 2019. This was a very normal market and in fact, it was still a seller's market where prices were appreciating. Just not appreciating at 20% a year, 25% a year.

Like, you know, it was over the last couple of years here in South Florida, that is not sustainable, it's not healthy for anyone, buyers or sellers. So I personally am very glad to see appreciation back to historical, normal levels, inventory at normal levels.

So let's talk about generally in the market interest rates are roughly 7%. So as you can imagine, as a seller, the buyer who qualifies for prices where they are right now at a 7& rate, those people are making really good money.

I'm seeing most of our buyers in these price points are you know, we'll call them white collar workers or workers in general who are making, you know, $200,000+ a year to qualify for a median price house.

So that buyer is going to be, as you can imagine, very particular about where they're investing their money and how much they're willing to spend and for what.

So we're seeing a Fully updated houses that are modern and turnkey, those are still selling really quickly and with, you know, for very good prices.

The homes that were updated 10, 15 years ago or need a lot of work, those are taking a lot longer to sell and they're selling for less money than they would if they were, you know, more updated.

Buyers right now don't want to put a ton of work into properties. That's just what we're seeing. So, you know, you have to price your property correctly. But as long as you price correctly, the homes are still selling. Good homes and good neighborhoods that are priced correctly, you know, on good lots, those are still selling much quicker than the average.

So the moral of the story is sellers, be realistic about where the market is. It may not be what the number that you want, but think about where we came from a couple of years ago, you're getting unbelievably high prices compared to what it was. Buyers are understandably picky.

And buyers, let's think about this. Everyone is hoping and the economists are all projecting that interest rates will be cut at least one time in 2024 with probably more to come over the next couple of years.

If you buy before rates go down, you're taking advantage of a slower market and you're able to lock in a price now. If you are on the fence about, "I want to wait until, you know, rates come down."

How many other people do you think are in the exact same position, saying the same thing?

I can tell you how many people we speak to on our team who are all saying, "Oh, we're just going
to wait until rates come down. We're going to wait until rates come down."

If everyone's doing that, when rates do come down, and they will, no one has a crystal ball on when, bu they will come down a little bit.

You're not going to see 2, 3%, but probably back into the 5's. You know, when rates hit that mark, buyers are going to flood back into the market and it's going to cause crazy demand again.

Prices are going to go up. It's going to be much more competitive. So what we are suggesting to our
buyers is if you can afford it, don't overextend yourself and buy a house, just hoping that rates go down so you can refinance.

Make sure you can afford the house at today's rate and today's price. But if you're able to lock it in now, you're locking it in at a probably lower price in our opinion. And you can refinance if everything else is the same with your financing in the future.

And you're avoiding a much more competitive market that will inevitably come when rates do come down, whenever that is. So, that's our suggestion.

If you have any questions about navigating the South Florida housing market, don't hesitate to reach out. Call, text, email, smoke signal, carrier, pigeon, however you want to communicate.

Just remember, we got your back when moving in South Florida.