The Delray Beach real estate market took a turn for the worse in November.
Welcome to my “How’s the Delray Beach Real Estate Market Report for November 2022. Today I’m going to share 3 important pieces of data:
1) Days On Market (DOM)
2) List-to-Sold Ratio
3) Absorption Rate
Delray Beach Real Estate Market Statistics
DOM
In my October report I showed DOM and List-to-Sold… but in November both got worse – a lot worse.
Look at Nov’s DOM. It’s gone UP each month since July. Back then it took an average of 20 days to sell. It’s more than doubled to almost 42 Days! But from Oct to Nov it went up from 33 to 42 Days, or up 28% in One Month! This is a Dramatic Slowing in sales velocity.
Absorption Rate
I look at this monthly, but it’s the first time I’ve reported on it. Here’s what Absorption means and how it’s calculated…
Now look at this chart…
During the peak of this Delray Beach real estate market, it hovered near 40 days of inventory – or less than 1.5 months. Since January it began a slow rise, but in April it started rising fast! This is a clear sign of increasing supply AND slowing demand. So, if not one new listing hit the market, in November we’d have enough supply to last about 90 days or 3 months! Back in Q1 that was about 40 days or 1.5 months.
List-to-Sold
Like I reported last month, buyers have been getting the upper hand on this Delray Beach real estate market. Back in May sellers were getting their asking price with no issues. That’s no longer the case. Today closed sales are averaging 92% from the list price.
So, on a property listed at $500k, the closed prices will average about $460k. On a $350k property, that’s $322k.
All 3 of these data points are smashes to the face for sellers. It’s leaving many of them in disbelief that a market can turn around this fast.
Delray Beach Real Estate Market Takeaway
Sellers are nervous. In meetings with homeowners about the value of their home, or “what can we get for our home today”, it’s not going well. I mean, we can justify higher prices so we can feel good, but that’s a bad strategy. It’s more important now than ever, to do a thorough Comparative Market Analysis, and look at what your property has or doesn’t vs. others.
As the Delray Beach real estate market is one of the hottest in Florida, spend the time up front to understand what your property value is – guessing is not an option.
I stand by my viewpoint of “the first day your home is on the market is the day with its highest value. After that, the value erodes in the marketplace – especially as inventory continues to rise. Don’t believe me? Look at this of a recent listing. The first three day had excess of 50 views per day. After that it dropped…
And with our high season now underway, each day that goes by is one day closer to off-season. Sure, we still have 5 months until then, but we need to price property for right this moment.
Buyers remain patient. Buyers are chomping at the bit to buy at even lower prices in 2023. It’s the narrative with buyers on every phone call. And, with the recent pull back in mortgage rates from the low 7% range, not in the mid-6%’s… buyers are more active now than ever.
When showing buyers property today, their body language is more relaxed. “Let’s see more” is their M.O. They have more time, more options.
As we close 2022 the tide has changed by a lot!
Sellers are still living in the past, while Buyers are more present. With that disconnect in the market, I anticipate sales to continue slowing until some alignment between both parties comes back to equilibrium.
Then again, January will bring more folks to the Delray Beach real estate market… and an uptick looks inevitable.
See you next month!
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Delray Beach Real Estate Market Update November 2022. My Delray Beach real estate market for November is a must watch. This month I share charts and current information critical for sellers and buyers. The real estate market is changing fast. It’s more important than ever to stay current.
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