Welcome back to my “How’s the Delray Beach Real Estate Market Update” for April, 2024. This is for you local homeowners and sellers.
As for active inventory, this first chart is from our Delray Beach real estate market MLS.
If you go back to August of last year, inventory was around a thousand units. Throughout the Delray Beach real estate market, it rose 82% to over 1800 units, and last month, you can now start to see the curve taking place.
Where is it going to go from here? Well, with the way the interest rates and certain other market conditions are taking place, we might start to see a little bit slowing in the overall surge of inventory this summer.
The next chart is what is the supply rate of increase on a national basis. This data is from realtor.com.
It glares right at you. Florida, shows an increase of 64% over the last year. What does that mean for you homeowner and home sellers? There’s more competition. So it’s becoming more important each day if you’re planning to sell to price your property the right way. Price it for today’s market.
Delray Beach Real Estate Data to Memorize
The next chart is the sold to list ratio. Look at the right side. It dropped to 89%.
What that means is if you listed your property for a million dollars, it sold for about $890,000. Why such a drop? Well, we’ve been talking about active inventory the last year. Inventory is up 82% in the last nine months. So, we have a flood of inventory creating more competition for homeowners and sellers.
And guess what? Buyers are being scrutinizing inventory. They’re looking at it with a fine-tooth comb. Buyers are making offers and are getting an upper hand in the marketplace. Buyers are seeing massive surge in inventory in the Delray Beach real estate market. They’re becoming more patient because to them, they have a bias of what was taking place just a couple years ago when there was “no inventory.” They’re getting better offers as you can see in the sold to list ratio.
Now look at the Delray Beach real estate, Days On Market (DOM) graph. It’s at 73 days. 5-6 months ago, it took properties about 47 days to sell.
Again, buyers are more patient today. They’re evaluating interest rates to determine if now is a good time to buy.
They’re seeing a Delray Beach real estate flood of inventory and are taking their time to see as much as they can. So, until a seller drops their prices, which we’re seeing more, but not enough for buyers to make offers. So, DOM continues to rise.
The next Delray Beach real estate chart shows the last two and a half years. As you can see, back in May of 2022, it took about 20 days to sell a property. Now we’re at 73 days. Obviously, the market has changed from a seller’s market, and it’s moving deeper into a buyer’s market.
Now look at the two and a half year chart of interest rates. It shows the 3% days. It peaked last October at just over 8%. That is when inventory was surging. But as we hit the fourth quarter, interest rates fell from 8% to 6.6%. Buyers took charge while there was also a rise of inventory.
How This Delray Beach Real Estate Info Will Affect You
So if you own a home, what are you going to do with all this data? Well, let me help you a little bit. We’re seeing the rise in inventory starting to ease. Now we have price reductions in the market ramping up… and these reductions are not slowing down. Homeowners are starting to scratch their head and say, “wow, days on market is rising… I need to drop my price… and we’ve talked about how Dutch auctions – pricing high then dropping as needed – doesn’t work in this kind of market. That’s not a good strategy as we transition from a sellers to a buyer’s market. When you listing your home, you need to price your property to the market price, not inflated because it’ll linger on the DOM.
Delray Beach Real Estate Changes With NAR Settlement
Now, let me share a bit about the National Association of Realtors (NAR) Class Action Lawsuit, which is now a settlement. It’s a big, big deal. Most likely you’ve seen headlines in the news and you’re probably scratching your head thinking how’s this is going to play out.
Well, it goes into effect throughout the United States on August 17th.
The lawsuit was to eliminate, or what they call “decouple” the cooperative compensation in a listing agreement. Normally I would take your listing and we’d have an agreement for agreed upon price and a compensation of – let’s say 5 – 5.5%. That’s standard in today’s marketplace.
I would then put that in the MLS so that the buyer’s broker knows what their compensation is going to be for your property.
Well, the class action lawsuit said they want to decouple that. They don’t want that to be visible to buyer’s agents. The want buyer’s agents to work with buyers and get their commission established on their end.
Just like listing agents get their commission when they take the listing. So, on August 17th, it’ll be the law on how the compensation’s going to play out.
So, if I come to you, Mr. and Mrs. Seller, and I take your Delray Beach real estate listing at an agreed price, we also agree on a compensation. I’ll then share disclosures and options you have about compensation. For example, you can give the buyer a concession on the price. This is a way to offer a compensation to the buyer’s agent.
If you say no, then you and I agree to some commission for me to sell your listing. Now, when the buyer’s agent calls me, I’ll let them know the seller is not offering any compensation to them. The buyer agent will need to obtain a commission from your buyer.
What will happen in that scenario, you as a seller, are not going to get thousands of agents to help sell your property because you’re not offering anything to the buyer. Or, maybe you can increase the listing commission – compensation – from 3%, to 4%, or 5%, just like it was in the past.
Now, when the buyer agent contacts me, I inform them the seller’s offering the buyer a concession of X dollars, or it might be 2X%, whatever we agree to. Now there’s full transparency. Everyone knows that for the listing you have made an agreement with me on what we can offer to the buyer.
And on the buyer’s side, here’s what’s going to happen. Buyer agents need to sign a buyer-broker agreement with their buyer prior to buying Delray Beach real estate. It’ll be just like when we take a listing agreement. The buyer agent going negotiate a compensation on their side. We’re going to work through this, but all this will come into play on August 17th.
The good news is that this scenario has been law in 18 states. So for those states, real estate will continue as normal. It’s the other states like Florida where things will be different and we will all need to adjust.
If you have questions, if you’re thinking about selling… there’s a lot going on with this lawsuit. I would be glad to sit down with you and share everything we know about how things will play out beginning August 17th. Ultimately, it’s a positive step in the right direction for the industry.
And for us working in the Delray Beach real estate market, we welcome this change that will improve how business is done.
We’ll get rid of a lot of riffraff. We’re going to be increasing professionalism, and we’re going to be able to serve you much better.
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Delray Beach Real Estate – Your APRIL 2024 Market Update.
The Delray Beach Real Estate market is strong, yet has now converted from a sellers, to a buyers market. It’s all in the data. And in this video I bring out a bunch of data for you to consume. It’s a critical time in our market with the slowest selling months of the year now here. Watch this video from start to end to get current.
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