Would you rather know where the Delray Beach Florida real estate market is going or where it’s been. Below I discuss four leading indicators that’ll give you a glimpse where the real estate market is heading now.
To do that I break it down into two groups of lagging vs. leading indicators.
For lagging indicators, I look at the average to median home price, absorption rate, sold-to-list ratio, and the number of sold listings. These are good data if you want to look at what happened in the past. For example, if you want to know what the house sold for on your street, we look at its sold price. That’s an indicator of the past. It lags.
That’s great, but what’s important to you is what’s going to happen in the future with Delray Beach Florida real estate market. That’s where we look at leading indicators.
For leading indicators, I look at the number of new listings, pending listings, active listings, and the continuous days on the market. For example, pending listings are listings that went pending. These show how many properties went under contract These will be closing 15, 30 45 days in the future – it’s a true leading indicator for you to watch.
(If you prefer to watch and not read about this market update, you can watch this video I put together for you…)
Let’s look at a series of charts and graphs that will give you an idea of what’s going to happen in the the future. Take a look at this spreadsheet. It looks at leading indicators: active, new, and pending listings, and days on the market.
As you can see in the columns at the top, it’s just for Delray Beach Florida. A year ago active listings were 1,434. Today, it’s 641. Now look at its gradual reduction every month over the last year. Over the last four or five months, they’re not dropping as much as last year. So, that might be a sign that active listings could be in for a turnaround and increase in the 4th quarter of this year.
Now let’s look at new listings. It’s almost flat from about 493 to 421. And as you look on the horizontal grid, you can see it’s down 21% from last September to this September. Year over year, it’s down about 7. Here’s why: It’s the post COVID era, and sellers are thinking prices are high. If they list their Delray Beach Florida property, where are they going to go. So right now sellers are saying they’re not putting their their properties on the market, yet.
The next indicator is pending listings. You can see in September of 2020, there were 439 in Delray Beach Florida. This September, it was 376 listings pending, which is a 14.5% reduction. But what’s more important is the year over year data. There’s a 29% increase in listings pending. That means demand is high, buyers are everywhere, there’s more contracts this year than last year. People are free to travel. It’s a post COVID thing. As we look forward this number remains positive. That tells us demand is in trench. Buyers are gobbling up inventory, which correlates back to the number of active listings.
Now look at the continuous days on the market (CDOM). Delray Beach Florida peaked at 90 in December of last year and is falling fast. The average days on market is down almost 62%. So the velocity of sales is on fire.
On to a couple new charts…
The first one is active and new listings. As mentioned, the number of new listings is flatline over the last year. That says sellers are not ready to list their properties. So, until things change where Delray Beach Florida sellers feel comfortable… we’ll continue to see this flatlining for the months ahead.
But active listings crashed. Down 57%. Since July, June, July, August, September, it’s starting to flatline. So, as I look out future, you can see the guillotine effect where the numbers crashed, and now we’re seeing listings stabilize. We might see this trend change in fourth quarter. If we start to see these numbers rise a little bit, then we will see the seller focused market easing into a normalized situation.
Next is the days of market. It shows this market is absorbing inventory at a rapid rate. Until we see this change, well…
If you’re a buyer, there are things to consider. It shows this is still a seller’s market. Data hasn’t changed – hasn’t shifted in your favor. I know you don’t want to hear this, but we need to look at the facts. And looking at the leading indicators, we haven’t seen data to prove that over the next quarter we’re going to see change.
Bottom line, the Delray Beach Florida real estate market has never been this strong.
I believe the remainder of 2021 is going to be a seller’s market in Delray Beach Florida. This doesn’t mean you can’t buy homes. Get your finances in order. Get with your lender. Get pre-approved right now. Don’t wait. When we are putting in an offer we need to be creative. Right now cash buyers are in the market. They’re offering more than listing price. But we can still compete with that.
There are things like the appraisal and the inspection contingency. I’ve been writing a lot about that in my blog, you can go to www.mrdowntowndelray.com and look at articles I’ve been writing that are specific for you, buyers.
You can waive the inspection contingency. Why? Well, if the average repair done from inspection reports is about $5,000 around the country, then it’s almost like saying, “hey, I’ll just get rid of that inspection report just to ease friction with sellers. The more friction you ease when you putt in an offer, the more ability you’ll have to win and buy the property.
We need to look at new ways of doing business. It’s not the old way. There’s a new norm of doing ways of doing business today.
I encourage you to take a look on my blog so you’re prepared to go into battle. (And you’ll find lots of goodies about Delray Beach Florida that you might not find elsewhere)
If you are a homeowner or a potential seller, it’s the best time in history to be selling your your home. All the indicators – lagging and leading – show right now is perhaps the peak of the market. Days on market are low. Active listings are lowest in history. We’re talking 50% down over last year. So you sellers are in the driver’s seat.
But leading indicators can change. If interest rates start to climb… the market can change quick as we saw in 2007.
So don’t wait too long.
Right now you are in that peak moment at the end of 2021. Consider putting your Delray Beach Florida property on the market because buyers are everywhere.
What do you think about these indicators? Let me know via text, email, or call me at 561-777-4089.
And if you’re in the Delray Beach Florida area, let’s get together… coffee is on me!
