The Federal Reserve finally graced us with a lower interest rate bone on Sept. 16 that should make everyone happy. The reason this ¼ point reduction is important is that the Federal Reserve all but promised two more rate reductions before the end of the year.
Nevertheless, there are homeowners with low-rate mortgages who are still reluctant to sell and move on as much as they may want to. A quarter point or even a half point is just not enough encouragement for them to give up a once-in-a-lifetime 3% mortgage. So, the market may continue to be locked up with prices still pushing up for those properties that come on the market, and there aren’t too many of them.
However, there are still benefits to modest lower rates, especially for a first-time borrower, enough to qualify many buyers at the lower rate to be approved for financing. Here on Anna Maria Island and all of the other coastal communities in the area, including our neighbor, Cortez, buyers in these areas are less affected by mortgage rates. Therefore, the market for high-end properties will be less influenced by mortgage rates than by the overall economy.
Many if not most high-end buyers are all cash and even if they decide on a mortgage to free up more cash, they will likely not decide on buying because of a quarter or even a half point reduction. They’re eyeing the health of the general economy and the position of the lawmakers, particularly in Congress, to business and the stock market.
Nevertheless, a healthy real estate market generally is good for all of the real estate market. There is a trickle-up effect of a robust lower-end market positively impacting all price points in the marketplace.
August may be one of the slowest real estate months of the year, but sales are made nonetheless. These are the sales statistics for August reported by the Realtor Association of Sarasota and Manatee:
Single family homes closed 5.7% more properties this year compared to last August. The median sale price was $467,640, down 5.3%, and the average sale price was $665,577, up 9.1%. The median time to sale was 101 days compared to 103 days last year, and the new pending sales were up 16.7%. The month’s supply of available properties was 4.6 months compared to 3.9 months compared to last year.
Condos closed 7.0% fewer properties this year compared to last year. The median sale price was $291,250, down 11.7%, and the average sale price was $354,958, with 8% fewer properties compared to last year. Median time to sale was 120 days this year compared to 139 days last year. New pending sales were 213 sales compared to 175 sales last year. The month’s supply of available properties was 6.4 months compared to 5.7 months last year.
According to the Realtor Association, there is modest growth and stability in the single-family market, with the condo market down. Single family homes continue to be competitive, and the condo market is becoming more and more buyer friendly.
Will the Federal Reserve move the needle on more rates as indicated or will it just be more of the same old same old? The outcome is evolving, so stay tuned.
