National and local real estate data is beginning to line up in unison.
The National Association of Realtors (NAR) Chief Economist, Lawrence Yun, came out with this statement last week talking about how inflation is seemingly under control and housing demand is holding strong against higher mortgage rates. Yun is declaring this housing recession over, with the expectation that real estate is on an upward trajectory.
Yun, “The housing recession, I would say, is essentially over. Furthermore, from a homeowner’s perspective…I think we have essentially reached the low point (for home prices), and we are set for some increases.”
Additionally, the national average number of offers on a home today is 3.5, down from 5.5 at the peak of the 2020-21 selling frenzy. Back in 2015, the average number of offers was 2.4.
Delray Beach Will NOT Experience a Housing Recession
As for our local market, there are four charts showing how our market is strengthening just like the national market. All of these data points suggest there’s no housing recession on a local level…
1. Listing Prices – going up
2. Sold-to-List – going up
3. Number of Listings – going down
4. Days on Market (DOM) – going down
Regular readers know DOM is one of my favorite data points. It’s the supply-side of real estate. And although it hasn’t fallen back to 2022 levels, the “flat-lining” effect baffles experts. With demand strong, why are properties selling faster? If we see DOM rise from this point it could be the one indicator of a pending housing recession. But with the other three charts aligning… chances of this are slim.
And here’s the kicker: all four charts took the exact same turn beginning Q2 this year. So, there’s only one way to interpret this data – our local market is getting stronger, not weaker.
In my new Market Update Video just published, I show these four charts in greater detail. You’ll also get an inside look at strengthening buyer demand via a metric I watch like a hawk for my business. If buyer demand continued falling like it did in late 2022, I’d be thinking housing recession. But the Q2 one-eighty proved otherwise.
Plus I show you an update on The Sundy Village construction progress. I share information on Florida’s economy, employment, and tourism growth prospects.
I’ll end today with two final thoughts:
1. There are still plenty of properties that never adjusted their price during last years’ correction. Those owners are being punished as their properties are not selling. Negotiations continue on both sides, and with the deep summer months here… we may see more price drops as homeowners lose patience.
2. The phrase, “is that your customer’s best and highest offer”, has yet to become the norm. But, as this market continues to strengthen, it may not be too far away.
Just knowing that phrase exists today if further evidence a housing recession isn’t even close to final approach or has landed.
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*** Cover Photo: Atlantic Crossing Phase II demolition is official. The buildings next to Veterans Park will be history soon. You can see Phase 1 in the background that should be completed by end of year.
*** Looking for more great Mexican food in Delray? Check out Papamigos just south of Trader Joes on Fed Hwy. Their Birria Tacos are out of this world.
*** This week I’ve seen a rise in the number of Duplex properties hitting the market. If that’s your flavor, call me to get more info.
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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 27,589 available… a 102% rise in 18 months
* This morning’s Inventory is 27,588.
*** Inventory is DOWN 23 of 28 weeks***
