Is the Florida Real Estate Market About to Crash?
Lately, there has been a lot of buzz and speculation about whether the Florida real estate market is on the verge of a crash. The short answer? No. However, the market is shifting, and it’s essential to understand what’s happening both statewide and right here in St. Johns County.
Florida Real Estate Market Overview
Single-Family Homes
Recent data indicates that single-family home sales have increased for two consecutive months, up 3.5% year-over-year. This marks the first steady growth in over a year. However, new pending sales are down 4%, likely due to buyers hesitating because of high mortgage rates.
Despite this, some buyers are re-entering the market, realizing that interest rates are not expected to drop significantly anytime soon. In fact, a recent client secured a 5.875% rate, which is relatively favorable compared to the 7% rates seen in recent months.
What does this mean for sellers? Homes are still selling, but buyers are becoming more selective. Proper pricing is crucial to avoid multiple reductions, which only give buyers more leverage.
Condo & Townhouse Market
Unlike single-family homes, condos and townhouses are facing more challenges:
- Sales have declined by 3.7% year-over-year.
- Pending sales have dropped by nearly 14%.
For condo owners looking to sell, pricing aggressively and having a strong marketing strategy will be key to attracting buyers.
Inventory on the Rise
One of the biggest shifts in the market is the increase in inventory:
- Over 35,500 single-family homes were listed in January, the highest since mid-2022.
- Condo and townhouse listings surged to nearly 18,900, the highest since 2008.
With more inventory, buyers have more options, and price growth may slow. However, unlike the 2008 crash, most sellers today are not in distress. Median home prices are holding steady:
- Single-family home prices have risen by 1.2%, now averaging $410,000.
- Condo prices have dipped slightly by 2.3%, now averaging $312,500.
For buyers, this shift presents more negotiating power, particularly in the condo market. Sellers, on the other hand, must price competitively to attract buyers.
St. Johns County Market Trends
Zooming in on St. Johns County, some homes are sitting on the market longer, leading to potential price drops and better deals for buyers.
- The median sale price for single-family homes has increased by about 1% over the past year, translating to a $5,300 rise in value.
- Homes have been selling at an average of 96% of their list price, showing that negotiation opportunities exist.
Areas with Longer Days on Market
Certain locations have seen homes linger on the market:
- Downtown St. Augustine: 45 of 70 homes have been listed for over 100 days.
- Crescent Beach: 10% of active condos have been on the market for over a year.
- Davis Shores & Vilano Beach: Some homes have been on the market for over 500 days.
The common factor? Many of these properties were initially overpriced, leading to multiple reductions and a loss of seller leverage.
Best Deals Right Now: Condos
With over 1,300 condos currently on the market in St. Johns County, buyers have plenty of options. Many condos remain unsold due to uncertainty over rising HOA fees and upcoming special assessments for maintenance and repairs.
For buyers who prefer a maintenance-free lifestyle, this could be a great opportunity. The best deals are often found in vacant units and properties with high days on market.
What This Means for You
- Buyers: Now is the time to target high-DOM listings with multiple price reductions. Strategic offers could lead to significant savings. If you want a list of the best deals in your price range, reach out to [email protected].
- Sellers: The market isn’t crashing, but it is taking longer to sell in some areas. Pricing correctly from the start and making your home stand out is crucial. Check out our Seller’s Prep Guide for tips on maximizing your home’s appeal.
Final Thoughts
The market is always evolving, and while we can’t predict the future, current trends indicate a shift rather than a crash. Since January, market activity has increased, making it a good time for both buyers and sellers to make a move.
If you’re considering buying or selling in today’s market and want expert guidance, give me a call. I’d be happy to help you navigate these changes and make the right decision for your needs.