A Quick Market Update!

KEY POINT: House prices are still high but we are beginning to see a significant amount of price reductions occurring across the market. Sellers are grappling with the reality of this new market, and some are in disbelief that the market has officially shifted. We are seeing homes staying in the market longer and that trend is expected to increase. Despite the high interest rates, which will likely make some buyers /investors cautious about purchasing a new home, the end result is that the market is shifting into a buyers market!

The Numbers: Active Inventory was on a downward trend thanks to historically low interest rates and the COVID 19 pandemic. However, now that the Federal Reserve has begun to aggressively combat inflation, the effect has sent a shock wave to the housing market. Beginning at the end of Q1, we notice that monthly active inventory has been climbing and new listing have also fallen. This means a couple of things for future sellers or buyers within the real estate market.

First, houses for sale are staying longer in the market, meaning buyers are not jumping into a buying frenzy like they were six to nine months ago. Second, sellers are now becoming cautious about putting their house up for sale. This is mainly because of two reasons. One, sellers are potentially sitting on an extremely low mortgage and are perhaps unwilling to swap out of their low mortgage payments for a higher one.

Second, sellers know that they have likely missed the top of the market and will now have to settle for a little less than what they were expecting. Assuming the Fed does not pivot any time soon, we are expecting the market shift to continue well into next year, and we will likely see other variables such as Days to Sale and Days to Contract to increase.

This means it will take longer for buyers and sellers to come to an agreement, as buyers take advantage of the increasing recessionary pressures in the economy. Lastly, monthly supply will evidently continue to increase and the median sale price for houses will likely decline though at a more moderately slower pace.

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Life In St Augustine FL - The Ortega Group

Saint Augustine, FL 32095


Carolina Samudio-Ortega

T: 617-504-7442

Carolina@ortegagroupre.com

LIC: SL3519275

Emmanuel Ortega

T:978-828-7028

manny@ortegagroupre.com

LIC: SL3524554



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St. Augustine and surrounding area chart data sourced from Florida Realtors SunStats © | As of: September 2022