To those of us who work in the real estate industry every day, it is clear that a change is underway in the local real estate market. Now, having said that, I would say that change is nearly constant in the real estate market - conditions typically are
never static, that's for sure. In light of this, we are experiencing not just a normal change in the market that we might typically see from month to month, but we are seeing something that represents a change of another kind - a shift.
To recap where we have been in the last year to year and a half, we have, in Northeast Florida, like most places in the country, been experiencing a streak of limited inventory levels. This has posed several challenges, primarily for those who have been
in the market to purchase a home. With limited inventory, there are not as many houses on the market for buyers to choose from, and the competition for the limited homes that are on the market is strong, which has served to drive prices up. We have seen
this in the past 18-24 months. This coupled with the low interest rates that we have been experiencing for that length of time has led to a market that has been very active and with price increases month after month.
If you have been a seller in this period of time, the leverage has been in your favor, with strong demand for your home. Multiple offer situations have been common with short marketing times. Buyers have had to complete and submit offers quickly and aggressively
in order to get a home under contract for purchase.
Now that we are entering a different phase of the market, some key elements are changing. Inventory levels, although still rather low, are increasing. The average days on the market is ticking up, and as interest rates rise, we are starting to see more
price reductions. What does this mean for you if you are a buyer? Well, it means that the see-saw may be starting to tilt a little more in your favor, as some buyers drop out of the market after being discouraged by the difficulty of the process and the
fact that interest rates are now rising more and more, and are predicted to continue doing so. The downside is that as interest rates continue to rise, the affordability of obtaining a mortgage will decline. If you were approved to purchase a $175,000
home several months ago, that qualification might only be good for $160,000 or so depending on the particulars.
For sellers, it means that homes that sold like hot cakes a few months ago, might take a bit longer to sell, or in order to sell quickly, might require a slightly lower price to so do. In my opinion, we are moving towards a more balanced market - one
that is more evenly split between buyers and sellers in terms of advantages and disadvantages.
We here at Belle Époque LOVE to talk about the market. If you have specific questions about your own prospects, or if you are envisioning the sale of real estate in your imminent future, whether you be a buyer or seller, please feel free to reach out
to us. We have lots of useful information that you can put to good use. As my father always said, in order to make a well-informed decision, you need all of the relevant information - that is what we are here for. Contact us for market information today!