One of the reasons I moved to Florida was because when I’m cold the only thing I can think about is how cold I am. I was really cold in January, but not as cold as the national real estate market, which apparently couldn’t think of anything else either.
In January, national home sales fell 8.4%, the biggest monthly decline since February 2022. Remember that what happens on a national level does not always affect local real estate trends, but there certainly is an influence, particularly when it comes to the overall financial health of the country. A little bit further in this column we’ll look at the Manatee County sales statistics for January, which will be an interesting comparison.
So, why was January so bad? Snowstorms and freezing weather all along the east coast certainly didn’t help; and neither did the erratic economic reports coming out of Washington. Which is too bad since the housing market was starting to show signs of recovery, fueled by a slight drop in mortgage interest rates. The decline came after sales rose in three of the previous four months. Even the surveyed economists were surprised, since they were predicting a much smaller decline of 4.6%.
Although December home sales rose, home prices also rose. In addition, the 30-year mortgage rates are hanging out at just above 6% and making no sign of moving, which is giving buyers another reason to sit back. Lawrence Yun Who is the chief economist for the National Board of Realtors. He indicates that improving affordability should bring buyers back to the market, but it’s not because of the public’s lack of an improving comfort level. Also, home prices continue to rise because of historic low levels of available properties, which is not improving the comfort level of potential buyers either.
In January, the national medium single-family existing home rose to $396,800, a 0.9% increase from last year. Manatee County’s median existing home price in January was $480,495, a very slight decrease from last year.
As far as mortgage rates stand, 6.1% is the current average, which is down from about 6.9% last year. Days on the market are also increasing. Therefore, many sellers are deciding to remove their property from the market rather than cut prices.
It’s time to look at the sales statistics reported by the REALTOR Association of Sarasota and Manatee: single-family homes closed 10.8% fewer properties this January compared to last. The median price was $480,495, down 0.1% from last year, and the average sale price was $647,324, down 2.3%. The median time to contract was 58 days, compared to 49 days last year, and the month’s supply of available properties was 4.6 months, with no change from last year. The bright spot was pending sales, which were up 17.4%.
Condos closed 1.7% fewer properties. The median sale price was $305,000, down 9.2%; and the average sale price was $366,887, down 10.1% from last year. The median time to contract was 65 days, compared to 60 days last year; and the month’s supply of available properties was 7.2 months, compared to eight months last year. Pending sales were also up from last year by 3.2%.
The Association of Realtors is sticking by its position that during the last several months the market has settled and everyone is adjusting to the “new normal.”
A final word about interest rates: 6.1% is not a terrible interest rate. Yes, it’s about double what the average was in 2020, and because of that, we may have created a generation of buyers who expect artificially low interest rates. I’ve said this before, but the likelihood of seeing 3% to 4% interest rates again is about the same as me moving back to the northeast, so it’s time to jump in the market.
