02/26/2021
SWFL REAL ESTATE MARKET UPDATE
☀️🌴🌊🏡😎
Wondering what the Florida real estate market is going to do in 2021? I’m hearing from a lot of home owners who are wondering when the right time to sell will be. There’s a few things to consider here. 👇🏼
Demand. We’ve seen a large influx of out of state buyers coming to Florida as a result of lockdowns in other states as well as people who were eager to make moves after our few months of busy, snowbird season was effectively canceled. We’ve also had families who made the move from smaller rentals to single family homes that better suit their needs now that so many are teaching their kids at home and/or working from home indefinitely. Single family home sales are up 18% from January 2020. However, sales were higher over the fall months of 2020 than they are currently. So while the number of sales are still quite high, they are not currently trending upward. This could be due to post lockdown buying enthusiasm finally balancing out.
Supply. Home inventory has been extremely low compared to recent years. Single family home listings are down a staggering 51.1% from January 2020, with condo listings down 26.3%. A balanced market has about 6 months worth of listings available and we currently have about 7 weeks worth available. Meaning, if no new listings were added to the market than what we currently have right this second, that’s how long it would take for every last listing to sell. Experts have not yet concluded as to what all is contributing to the low inventory as we’re still gathering data, but many are speculating that it has been largely due to the future being especially uncertain due to the effects of Covid. Often people are afraid to sell too soon if they see prices rising, but it’s worth considering some factors that are at play here, which leads us into our next point.
Mortgage interest rates reached an all-time, historic low last month at 2.7%. Economists have varied opinions on the interest rate forecast for 2021, with some predicting a rise back up to 3.6% by the end of this year. But the vast majority are in agreement that the rates have bottomed out and will only rise from here, though likely not too rapidly. If that’s the case, the amount of buyers will begin to balance back out. And it could very well be that the post lockdown rush to buy homes will also continue to level back out as pandemic conditions slowly return closer to normal. And as things continue to get back to some level of normal, confidence of local home owners will likely rise and we may see more home owners begin to make moves again. So demand is likely to remain good, but gradually lessen over the course of the year rather than rise.
Something else to keep in mind is that the luxury market in Florida has actually significantly contributed to the recent rising of median sale prices, so the typical home isn’t necessarily getting as high of a price compared to recent years as it would seem. Seeing quickly rising total median sale prices can put stars in the eyes of home owners, thinking that if the median price is rising relatively quickly, that it may be smart to hold out for a while before listing, assuming the trajectory will continue upward for a while before peaking. But in this area, luxury home prices don’t usually rise as fast as more typical home prices do, so when the median luxury sale price IS suddenly rising more quickly, it can create an illusion that typical homes’ prices are rising higher than they are. There also comes a point with rising home prices where the average buyer pool is priced out and then the market can shift again. So the smart move is to strike while inventory is at it’s lowest, buyers are still abundant and can still afford to buy, and mortgage rates are at their absolute lowest.
Though it’s generally never really a bad time to sell in this area with our year round sunshine and beautiful weather, historically, the best time to sell your home in SWFL is May-July. So the historic trends and current trends considered, if you’ve been thinking about selling your home, NOW is the time to start prepping your home to list it. Do the projects and do your spring cleaning NOW so that you don’t miss this rare seller’s market while you have the opportunity. My guess is that the first half of this year (and the sooner the better) is going to be the best time to sell, more so than the end of the year and beyond.
Please reach out to me with any questions on starting the selling process and for help on how to get your home ready to sell. I have clients who are looking especially for waterfront, single family, pool homes, so please let me know if you are thinking of selling and I’d be happy to give you a free estimate on what your home is likely worth. Time to make moves, home owner friends! Let’s take advantage of this!! 🙂
