After 12 Months – Home Sellers May Be Back In Charge of this real estate market…
(If you missed my essay last week, I wrote about the tide turning for a handful of things happening in Florida real estate. You can read it here).
Today, I’m going to flip the narrative with convincing national information that may help you understand where this real estate market may be heading (Data below comes from real estate industry publications, long-term industry professionals and other inference readings). Let’s get to it:
* “There’s no doubt the real estate market has reignited from a price perspective”, said Black Knight (A real estate data and analytics firm) Vice President of Enterprise Research Andy Walden. “Firming prices have now fully erased the pullback we tracked through the last half of 2022 and lifted the Black Knight HPI to a new record high in May.”
* Walden added, “Active listings have deteriorated in 95% of major markets so far this year and, overall, we’re still down more than 50% from pre-pandemic levels.
* Home equity in the US is about $29 trillion – the most in history. Take a look:
* 39% of home are owned free and clear
* 29% of homes have 50% or more in equity
* 82.4% of homeowners have a rate below 5%. 62% have a rate below 4%.
* Days on Market (DOM) in July 2022 (the zenith of that market) was 34 days. Then bumped up to 72. In 2023 it’s down by about 50%.
* There are 3 million households that make over $150k in annual income and are still renting (pent up demand?)
* Experts believe with inflation falling, and mortgage rates in the 7% range again… they may be peaking and we should see rates begin to drop in late 2023 and throughout 2024.
* And foreclosure rates in the US are down from 2.23% in 2011, to 0.23% today. That’s 90% less today.
That’s a firehose of data to consume. But, that’s the looks of a strong real estate market. Meaning; low inventory… pent up demand… high household equity… rates potentially going lower.
All this to say, you could argue there’s a lot going for the real estate market looking forward. All this year I’ve been writing about the markets weaknesses. But, is the tide turning again? Will sellers gain the upper hand?
Regular readers know I’m bullish on the real estate market for the next 2-3 years. There’s just much data proving demand isn’t slowing, and supply is wound up so tight that it’ll be hard to break it open. To repeat a huge point above, 62% of homeowners have a rate below 4%. That in itself is a data point you must fully digest. It’s a power-punch. Why would homeowners in this real estate market leave that for a rate almost double… while prices show strength.
A slip of the 30-yr mortgage and prices could be off to the races again…
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*** Photo above: last Saturday at South End Delray Beach before the rains came.
*** As of this morning, there are only 4 downtown Delray Beach lots for sale. if you know anyone who wants to buy and build, consider this 9,503 ft2. Double-Lot.
*** My latest video dropped last weekend. There’s important information about living in Delray Beach & Florida you may find useful, or entertaining.
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*** Your Weekly South Florida Real Estate Market 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 27,347 available… a 102% rise in 17 months
* This morning’s Inventory is 27,445 .
*** Inventory is DOWN 22 of 24 weeks***
