Market Update February 2023
With Brad O’Connor Ph.D.
TRT: 4m 29 sec
Video Transcription

Brad O’Connor Directly addresses camera:  After a difficult January, Florida’s home resale market showed some slight signs of improvement in February, according to the latest statistics from Florida Realtors. 
Homebuyer demand continues to suffer nationally in the wake of last year’s rapid rise in mortgage rates. In January here in Florida, closed sales of existing single-family homes were down 32.5% year-over-year. That said, the national average 30-year fixed mortgage rates did come down from its recent highs and settle in the 6 to 6.5% range for much of December and January. That sparked a little bit of renewed buyer activity, and it showed up in the closed sales numbers for February, which were only down by 21.3% compared to a year ago. The trajectory of sales this year still seems to be paralleling the path of sales back in 2019, our last full pre-pandemic year. Sales this February were within 2% of February 2019’s totals.
Over in the townhouse and condo category, we continued to see larger year-over-year declines in closed sales than in the single-family market, but there was improvement here, as well. In January, townhouse and condo sales were down nearly 41%, whereas in February, the year-over-year decline was only a little above 30%. Compared to February 2019, though, townhouses and condos still underperformed by 4%.
One area where the home resale market did *not* improve in February is new listings. In January, single-family new listings were down almost 5% year-over-year, but in February, this worsened to a decrease of 12.6% compared to a year ago. This decline was significant enough that the inventory of single-family homes listed for sale actually fell by 2.4% from the end of January to the end of February. Single-family inventory is still more than twice what it was a year ago, but it also remains over 23% lower than the level it was at the very beginning of the pandemic at the end of February 2020.
The year-over-year drop in new listings was more modest in the townhouse and condo category, but it also worsened in February compared to January. In January, new townhouse and condo listings were only down 2.4% compared to a year ago, but in February, this expanded to a 7% decline. As was the case in the single-family category, the level of townhouse and condo inventory at the end of February remained significantly greater than where it was a year ago, but compared to three years ago, it is still down by over 40%.
The only upshot to our persistently low levels of new listings is that it is helping keep prices relatively stable by preventing the ratio of buyers to sellers from shifting too rapidly. The median sale price for closed sales of single-family homes in February was 3.5% higher than a year ago, rising to $395,000. Over in the townhouse and condo category, the median sale price was $315,000, a year-over-year increase of 8.6%.
Mortgage interest rates have climbed in recent weeks, but they are currently volatile as the markets are trying to figure out what to make of the recent turmoil in the banking sector. This uncertainty might have the effect of making some buyers hop back on the fence for the time being, so there’s no guarantee that we'll continue to see improvement in sales for March and April. The 2023 spring buying season will be a bumpy ride, so be prepared to buckle up!
Anyway, we’ve covered the statewide numbers here, but what about your local market? Is it seeing the same trends? It’s easy to find out if you’re a member of Florida Realtors. Just go to sunstats.floridarealtors.org and log in to view the latest market data for your area. We have the whole state covered down to the city- and ZIP Code-level. Thanks for watching! I’ll see you next month.