A Balanced Market in High Season
We’ve talked about the South Florida market slowdown before - but now, we are approaching a balanced market (roughly equal numbers of buyers & sellers) for the first time in the last 18 months, just as we approach high season.
A housing market is typically considered balanced at 5-7 months of inventory (a measurement of the amount of time it would take to sell through all of the inventory on the market today at the current rate of sales). Miami-Dade is at 4.9 months - up from the 2-3 month territory we’ve seen over the last two years.
Meanwhile, market pricing is continuing to catch up to this new supply & demand dynamic and the impact of higher mortgage costs. The average closed to original list price difference in September was 92%, demonstrating the impact of price improvements & buyers’ broader negotiating power.
What does all of this mean as we approach high season?
- With Hurricane Ian’s impact on Florida’s West Coast, snowbirds are even more likely to look to South Florida for seasonal rentals this year. This means the already sky-high rental market is likely to continue, with particular upward pressure on seasonal rentals
- As rentals continue to grow in price and the market dynamics shift in favor of buyers, buying looks more attractive - even with the higher mortgage rates
- Motivated buyers have a great opportunity now, in a more balanced market with more available inventory, to find a fantastic home and negotiate on key contract terms & pricing
- Motivated sellers (particularly those on a time crunch) will need to be less aggressive on pricing at the outset in order to avoid additional time on market (which may come with more Fed actions & mortgage changes) & multiple price drops
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