Real Estate Market Report Summer 2023

Residential Home Markets in US

The residential home markets across the US continue to reflect the Federal Reserve’s uncertainty regarding inflation. The Fed has waged a year-long campaign to grind down inflation, which peaked last summer at 9%. They have raised interest rates in rapid succession to the current level 5.25%, the highest level in two decades. Upcoming decisions will be based on reports of inflation and the job market. (High rates undercut inflation by slowing the whole economy — particularly in the home market where mortgage interest rates are directly affected.)

We’re anxiously awaiting the Fed’s next meeting in September. Although most of the components of inflation seem to be stabilizing, there is no consensus yet on how the Fed will choose to act. For the time being, we can expect fixed 30-year mortgage rates to continue above 7%.

According to the New York Times and the Wall Street Journal, nationally, the trends in home sales are as follows:

• Fewer homes are selling. The number of home sales is down 18.9% when compared to last year.
• Median sale prices have slipped a little. The median sale price of $410,000 is down, but only slightly (0.9%), when compared to a year ago.  
• Inventory of available homes is still low nationwide.

North Florida Housing Market

The North Florida market reflects many of the national trends, with a continued high number of buyers moving from out of state making our market even tighter.  According to the Northeast Florida Association of Realtors:

• Closed sales in July were down 10.6% from a year ago.
• Months’ supply of inventory is still low at only 2.7 months of inventory.
• Median price per square foot was $210 up 3.4% from last year.

Ponte Vedra Beach Residential Housing Market

In Ponte Vedra Beach, the numbers are even more striking:

• The median sales price in July was $1,223,000, up 1.9% from July of 2022, with a median price per square foot of $430 (up 15.9% from a year ago).
• While closed sales were up in July, pending sales are down from a year ago.
• Median days on the market are tight at 36 days.
• Active inventory is “up” but still below the national average with only 3.0 months of inventory on the market. 

Nocatee Residential Housing Market

Trends in the Ponte Vedra and Nocatee area are slightly different, with Nocatee data showing:

• The median sales price, $750,000, is flat when compared to a year ago.
• Closed sales are down 14.1% from a year ago, but flat to last month.
• Median days on the market is only 22 days.
• Nocatee inventory is even tighter, with only 2.5 months of inventory on the market.  

New Home Sales

New home sales are ramping up again in Northeast Florida:

• Large residential communities like Nocatee, Shearwater and Seven Pines remain very popular with buyers. In fact, Nocatee was rated the #1 place to raise a family in Florida by Niche, an online publisher of nationwide rankings and reviews for schools, cities, neighborhoods.
• Builders are seeing significant improvements in material availability, and prices for raw materials are stabilizing. 

Here’s what our team is seeing: 

• The limited inventory is still frustrating for potential buyers, whose purchasing power has been greatly reduced by higher interest rates.
• When houses are priced appropriately and staged, they’re still selling quickly. 
• We’re no longer receiving multiple offers on all our listings, but our sellers are still benefiting from a seller’s market.
• Most buyers are expecting some room to negotiate, but within reason. The list-to-sale ratio in our area is approximately 96%…so we’re prepping our sellers to expect an agreed upon sale price in that range. 
• We are encouraging our new construction buyers to engage a third-party inspection service to monitor the progress of their new home. While most of the builders in our area are excellent…the third-party inspectors have caught mistakes that could have potentially been disastrous to our buyers. 
• Prospective sellers, who also wish to buy, are facing limited inventory; and, in many cases, mortgage rates far higher than their current rates. Not surprisingly, many are choosing to sit tight.

The Summer 2023 real estate market has seen significant shifts influenced by the Federal Reserve's actions and the broader economic landscape. While there are challenges due to increased interest rates and limited inventory, certain areas like Ponte Vedra Beach are still witnessing growth. As the market continues to evolve, both buyers and sellers need to be strategic and informed to navigate the changing dynamics successfully.

If you are looking to purchase or sell your home and are in need of strategic advice, we can help. How you approach this time can significantly impact your bottom line. Please feel free to reach out to the Lisa Barton Team.