Mortgage rates appear to be controlling the real estate market across the country. My new favorite term is “rate sensitive.” This means that a buyer who would have been happy at 6.75% ran for the hills when the rates rose to 7%, about where they are as of this writing for a 30-year, fixed-rate mortgage.
I’m not dismissing the importance of rate increases in real money to buyers’ budgets, but nevertheless, a lot of them are walking for not a lot of money. To be fair, a one-point increase in a mortgage rate would have the same effect on affordability as a 10% increase in home prices, per First American Financial Corp. This could eliminate the buyer from qualifying for the home they are currently considering, lower their home buying expectations or cause them to disappear completely from the marketplace.
Earlier in the year when the rates were solidly in the 6% or a little over range, buyers were on the move. This may explain why our Manatee County statistics this
month show more pending properties in February 2023 compared to January 2023 even though the annual trend has been going down monthly. This was a surprise to many professionals in the housing market who now think that gain may be given back. The general consensus is that buyers now are much more cautious and are paying more attention than the people that were buying last year.
Here are the February sales statistics for Manatee County reported by the Realtor Association of Sarasota and Manatee:
Single-family homes closed 10% fewer properties than last year. The median selling price was $490,000, up 2.5% from last year, and the average selling price was $639,562, down 7.7% from last year. The median time to contract was 39 days compared to six days and the month’s supply of properties is 3.1 months compared to 0.6 months last year.
Condos closed 21.1% fewer properties than last year. The median selling price was $369,900, up 13.8%, and the average selling price was $435,748, up 17.3% from last year. The median time to contract was 29 days compared to 5 days and the month’s supply of properties was 3.4 months compared to 0.5 months last year.
March and April generally are busy months for closings in Florida before buy- ers return north. The next two months may tell a slightly different story, but there is no doubt that higher interest rates are having an effect.
One quick note about your home’s as- sessed value. Property taxes across the country have risen in recent years based on the increased value of your home. When you receive the new assessment and tax bill, don’t just file it in one of those folders that you’ll never look at again. Read it over for errors that could be anything from the size of your lot to the size of your home and the size of your new pool. Don’t be afraid to contact the assessor’s office and review this with them.
It’s also a good idea to stay on top of the recent sales in your neighborhood. Zillow, Trulia and Realtor.com will give you just about anything you need to know in addition to the Manatee County public records. If you really feel your home has been appraised higher than it should be, you can ask a licensed Realtor for an evaluation or a licensed appraiser. A Realtor may prepare an evaluation as a goodwill measure, but a licensed appraiser will charge a fee, however, an appraiser’s evaluation may hold more weight. And don’t forget to apply for any exemptions you may be entitled to.
We are living through a sensitive time for just about anything related to finances. Keep the tissues handy and your head on straight.