“John, what’s going on with the (low) Delray Beach real estate inventory? I want to see MORE options!”
That’s a common start to conversations these days. But as I wrote last week, sales are down 36% across the country. Along with that, inventory is not making meaningful increases. As you can see in my weekly Inventory Update below, the supply of available properties is down for the 7th week in a row.
For example, from February to November 2022, inventory in South Florida rose 115%. Since then, inventory is down about 5% (see my inventory update in red below). It’s the same in the Delray Beach real estate market, too.
At the same time, mortgage rates went from 3% to over 7%… and now hover around 6.75%.
Knowing this, both sellers and buyers are taking a pause to re-think their strategy in early 2023.
Sellers: “why would I sell now, and get a new home near 7% rates when I have a 3% rate locked in.”
Buyers: “I can’t afford 6.75% so I’ll wait ’til the world craters, then rush in.”
Delray Beach Real Estate – Checkmate
Checkmate. Sort of…
Remember: real estate is all about supply & demand. And right now, neither are cooperating.
I can’t tell you how many Delray Beach real estate buyers are frustrated there isn’t more properties to see.
One customer seeking a 3-bed, 2-bath condo along the beach says to me each week, “you’re kidding, me… there’s only 14 in total to see between Boca and Delray?” Yup.
And conversations with homeowners who are thinking about selling are not easier. Sure they sit on a wad of equity, yet they fear finding someplace that is an upgrade to where they are. So they are unwilling to settle for less, and more willing to wait things out.
And who can blame them? Both sides of the table are paralyzed by the lack of options they face. This could go on for 12-18 months. Everyone is in a “wait-and-see” mode. Interest rates need to fall – but that’s pure speculation as they could go much higher.
And as South Florida has little open land for large scale residential development, we’re at the mercy of existing homes coming to market.
Delray Beach Real Estate AND Cash Buyers
This is not to say real estate is dead. To the contrary, many of my colleagues – and I – are busier than ever in the Delray Beach real estate market. We’re just working with more cash buyers.
Case in point, read this. Quite shocking. So why are there more cash buyers now, buying at peak prices, than there was in 2013 when prices were 64% lower?
The answer may be easier than you thought. Fear of recession still looms. Global economic uncertainty is alive. And what’s the best asset to own in times like these? Hard assets. Real estate.
* Photo Above: Looking south to Dune Deck Cafe and Eau Palm Beach in South Palm Beach.
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*** Your Weekly Inventory Update ***
* 4 years ago there were over 54,000 properties available in S. Florida.
* It bottomed in February 2022 at 14,485… a 73% drop.
* Last week there were 30,812 available… a 115% rise in 12 months.
* This morning’s Inventory is 30,398.
*** This is the 7th week in a row Delray Beach real estate inventory has dropped ***
