There’s plenty of reasons why this is the most complex real estate market I’ve ever seen.
Let’s start by looking at the active median list price for the greater Delray Beach real estate. As you can see in the chart below, it peaked at $464,000 last July. Since, it’s been a downhill slide the last eight months in a row, and at the end of March it was $360,000.
That’s a 22% drop in the active median list price in the Delray Beach real estate market.
That means sellers got the message and they’re doing what they can to attract buyers, but as you’ll see in the next chart, this market is complex. So to make sense of it, I put together a spreadsheet for you. Take a look at this.
You can see pending listings are down 15.5%. (Pending listings are listings that are under contract but may not close for another 15, 30, 45 days). It’s a leading indicator. Then, sold listings are down 30%. Well, if sellers are dropping their price, yet we’re closing 30% less transactions year over year… that’s something to make your head scratch. Then, active listings, as you can see, is up almost 27%.
So, the future’s not looking good with pending listings down. Sold listings are down. Even sellers are dropping their price. We’re not selling as much, and active listings are building up all our place.
That says one thing: buyers are still nervous about what’s happening in the marketplace. Maybe that has to do with interest rates. I’ll keep an eye on this moving forward.
Delray Beach Real Estate Trends
Here we go again, back for the 8th month in a row is Days On Market (DOM). For eight months in a row it’s going up. It went up from 57 to 58 days from February to March. And here’s the thing; while sellers are dropping their price, listing price is down 22% since last July, DOM is going up, and prices are coming down.
Delray Beach Real Estate and Inflation
This leads me to believe inflation is the obstacle.
Gas prices are higher, insurance costs are going up, food and grocery prices are going. Buyers are just not pulling the trigger and it’s going to take more movement from sellers and the prices to get this real estate market back on track.
Now let’s take a look at affordability across the country.
As you can see, over the last few years, the number went from 170 to 104. The number is going down. That means it’s getting more difficult for the average individual in America to make their monthly payments. And as you can see near the bottom, in January 2023, it’s crept up a tad.
Bottom line is this. A year ago when interest rates were at 3% and prices were high, it was easier for people to make a monthly payment and affordability was higher. But now that prices have come down and interest rates have gone higher, it’s more difficult for people to pay the monthly mortgage payment. That’s because of inflation, the cost of food, and the cost of insurance.
Now, let’s take a look at the final chart. Take a look at the national number of new listings on the market.
If you go back to January 2019, there was a negative listing of about 5%. If you put a ruler all the way to today, except for a brief period in 2020, the new listings coming to the market has been negative. It shows 34% down, 25% down, and a slew of 10 and 15% quarters where the numbers are down.
That says one thing.
Homeowners are locked into low rates over the last three years. These homeowners don’t want to sell. The reduction of listings across the country is like a listing shortage pandemic.
Buyers want buy, but sellers are not putting their property on the market.
I write about Delray Beach real estate inventory in my weekly e-letter. The last 13 weeks in a row, inventory is down about 14% from the holidays, and it’s not changing. Sellers are not putting their properties on the market because they’re locked into low interest rates and they’re in fear of selling their price property to go buy new property at higher rates. This is making the real estate market complex.
Sellers are doing what they can to lower the price. And buyers want to buy but are stepping away from the market. It’s a complex Delray Beach real estate market.
Analyzing the data is more critical now than ever before. Back next month to see how the beginning of the second quarter begins.
Delray Beach Real Estate Market Update March 2023
Delray Beach real estate, like most real estate in America, is confused and challenged. In this real estate market update I share local and national news that affects our real estate.
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