Perhaps the biggest frustration for home buyers in the current real estate market has been the lack of homes for sale. Needless to say, this has caused prices to increase at a faster pace than normal while making the competition for homes more intense than ever. In particular, first-time home buyers and other buyers obtaining financing have found themselves at distinct disadvantages against many cash buyers.
In South Florida, home buyers are not only competing against their fellow Floridians either. In the past 15 months or so, we have seen a dramatic increase in the number of out-of-town buyers. Furthermore, this is in addition to the already high number of out-of-town buyers moving to South Florida prior to the pandemic. Of course, the question on everybody’s mind is: Will the housing inventory improve anytime soon?
What does the data show?
The month of May brought upon the first uptick in housing inventory since July 2020. In fact, compared to April 2021, the housing inventory increased by 3.9% in the month of May. For perspective, this is only the fifth increase in the last 24 months. When considering the top-50 largest U.S. markets, only six experienced lower inventory since April. With this said, the overall U.S. housing inventory is down 31.2% since May 2020. Although this is not good, it is an improvement over the 32.8% year-over-year decline seen in April 2021.
The bad news for home buyers is that housing inventory numbers continue to remain at historic lows. The good news for home buyers is that these numbers are improving in most markets. As of April’s data, unsold inventory was at a 4.2-month supply, which is up from 3.8 months in March. For perspective, a balanced real estate market typically has about a 6-month supply of homes for sale. The time properties remained on the market dropped to an average of 24 days in April from 36 days in March. Of the homes sold in April, 53% of them were on the market less than a month.
The South Florida real estate market continues to be as competitive as ever. With an increase in the number of people relocating to the area, this has added to the demand. Now more than ever, it is critical that buyers have a team in place that is able to work together swiftly in order to successfully purchase a home. Of course, this all begins with a local and knowledgeable real estate agent that is able to act swiftly on your behalf. In addition, your winning team should also include a mortgage broker (if applicable), a real estate attorney/closing agent, & dependable home inspection contractors.
At Live South Florida Realty, Inc., our team of knowledgeable and responsive real estate agents combined with our trusted partners will ensure a smooth home buying experience. Give us a call today. We are looking forward to assisting you in paradise!