Some of the most common questions that we receive from clients are: “Is this a good time to buy?” or “Is this a good time sell?” Much like the stock market, we are always trying to time things perfectly. The reality is that even the professionals in these respective industries do not know when to pick a top or a bottom in any market. The past few years in the housing market have seen a low inventory of housing combined with strong buyer demand resulting in rapidly rising prices. At the same time, we are now seeing record-level inflation and what many believe is a recession. Needless to say, we are seeing some changes in the housing market as a result.
Market update for Boca Raton and Delray Beach
It’s helpful to start with market data to get an understanding of where we are now. Here we have results for Boca Raton and Delray Beach through May 31, 2022. For both Boca Raton and Delray Beach, we see higher sales prices compared to last year and low inventory of properties for sale for single family homes, townhomes, and condos. Sales prices are very close to asking prices and properties go under contract quickly.
Reductions in asking prices for home listings
During the past several years, it was extremely rare to see a price reduction on a home listed for sale. In fact, many sellers could even overprice their homes and still receive offers. For perspective, in a normal real estate market we generally see about one third of listings taking a price cut. In the summer of 2022, we are seeing rapidly rising interest rates combined with out-of-control inflation that is resulting in approximately a quarter of home listings implementing a price reduction. This is a sharp increase from the 14% of home listings that reduced their prices in the spring of 2022.
Most experts believe that we should not see a housing market crash, however it is safe to assume that we will not see much, if any, home price appreciation through next year. In some markets, it is also not unreasonable to expect to see a small price correction in home prices depending on local economic factors. This will be more commonly seen in local markets where home price appreciation greatly exceeded wage growth.
As for timing the real estate market, there are opportunities in any market. If you are a home seller, you likely missed your opportunity to cash in on the buyer frenzy of the past few years. With this said, an appropriately priced home that is showcased professionally, will still sell relatively quickly in this market. For our clients in South Florida, this is particularly still the case because we are still experiencing significant population growth from those wanting to relocate to paradise.
If you are a home buyer, you may be able to take advantage of less competition from other buyers in the market. It is estimated that approximately 18 million home buyers have been priced out of the market this year as mortgage rates have essentially doubled. For more on this topic, read our previous article here. Whether you are buying or selling, you will need expert local knowledge to navigate the current housing market. If you are in South Florida, contact Natasha at Live South Florida Realty, Inc. today!
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our trusted “Florida Home Search” app is available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!