It’s a whole year later and we’re still talking about interest rates and low inventory – will it ever end? The sellers are still happy with their values, the buyers are still dismayed with the lack of inventory and it’s not likely things will change much in the new year.
The most recent conversation among real estate analysts is that even though interest rates have dropped slightly, it will make homes more affordable but not affordable enough since the shortage of available properties to purchase is not expanding at the national level.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, rose 3.9% from a year earlier in September compared with a 2.5% annual increase the prior month. September was the highest since the index began in 1987. In addition, according to the National Association of Realtors, the median existing home sale price rose 3.4% in October from a year earlier to $391,800.
So, what is the outlook for the new year? Some analysts feel home prices are feeling the burden of high mortgage rates, which will slow the rate of price growth in the new year. Others agree and think it might be that home prices are going to tread water for a number of years until the economy gets in balance with higher incomes and lower rates.
One nice change for those buyers out there is the increase in the maximum size of home mortgage loans eligible for backing by Fannie Mae and Freddie Mac, which represent the majority of home mortgages. In expensive markets like Hawaii, California and New York, the increase will be a maximum of $1,149,825 from $1,089,300 and for less expensive markets, the cap would rise to $766,550 from $726,200. The increases are set by a legal formula and could make it easier and more affordable for some borrowers, especially in the high-end markets.
Let’s take a look at Manatee County’s November sales statistics reported by the Realtor Association of Sarasota and Manatee.
Single-family homes closed 22.2% more properties compared to last November. The median sale price was $485,861, down 4.1%, and the average sale price was $662,237, up 4%. The median time to sale was 82 days compared to 77 days last year.
Condo sales were up 20.7% compared to last November. The median sale price was $351,500, down 1.8%, and the average sale price was $393,475, up 0.6%. The median time to sale was 83 days compared to 56 days last year.
The month’s supply of available properties for both single-family and condos were up. Single-family properties had a 3.4 month’s supply, up 13.3% from last November and condos had a 4.4 month’s supply, up 63% from last November.
Overall demand is strong for both Manatee and Sarasota counties. With inventories in both counties continuing to increase, we can assume sales will be strong over the winter months when visitors and part-time residents return in force.
The stability of the real estate market really depends on the stability of countrywide and even worldwide economies. And don’t discount the emotional impact of wars and unrest as well. Fortunately, Florida is still a hot market that doesn’t look like it’s cooling off any time soon. We’re going into the busy buying and selling season, which will be the real barometer of how successful our market is.
Happy New Year and much joy and love in 2024.
