Each month, Florida Realtors releases a detailed report that lays out major real estate statistics from the preceding month and compares those numbers with statistics recorded over the last 5 years. At Thomas Group Realty, we use this information to determine how the Florida real estate market is performing and to help our clients decide when seems like the best time to buy or sell their home.
It’s always interesting to see where the market has fluctuated over the past year and how
Florida Real Estate Closings Are Slightly Down
From May 2017, closed sales were down 5.8% from 463 to 343. Though this may seem disappointing, there are a few reasons things may have slowed down this year.
For one thing, the Federal Reserve recently raised benchmark interest rates by 0.25%. This isn’t a substantial hike, but it can cause some buyers to be more reserved about purchasing a home, especially if it’s their first. Homes are also more expensive now than they were a year ago which can make buyers a little hesitant.
When we look at the other numbers that fall under “closed sales,” we take the following into account:
- Median sale price was up from $218,700 in May 2017 to $241,000 in 2018, a change of 10.2%.
- Dollar volume was slightly up (the total dollar amount sold by Alachua County real estate agents). Last month, the total was $93.9 million, up from $93.2 million in May 2017 – that’s just a 0.8% difference.
- Average time to contract was down from 48 days in 2017 to just 34 days, a nearly 30% reduction that led to homes spending less time on the market and moving faster toward closings.
- In a single month, the number of closed sales went up by 25%. In May, 343 homes closed. In April, just 274 homes sold.
From these numbers, we can see that despite the small dip in the number of homes closed in May 2018, the Florida real estate market is still doing well. So how can we determine whether it’s a better time to sell or buy?
Lower Demand for Florida Housing
Sale prices were up and average contract-to-closed times were down – both of which are great pieces of news for real estate agents and home sellers. Additionally, the May 2018 numbers tell us more of the current state of affairs:
- New home listings were up to 442 listed homes in May 2018 from just 371 homes in May 2017. That’s an increase of nearly 20%!
- Active listings, meaning overall home inventory, was down by 1.9% from 2017. Last month, just 945 homes were on the market while there were 963 in May 2017.
These numbers by themselves tell us that the seller’s market has cooled a bit since April 2018 and there’s a bit less of a demand by buyers for homes than there are sellers who have listed their homes on the market. The change isn’t significant, however, so arguably, it’s still a seller’s market.
Industry Clues about Inventory
May 2018’s “Months Supply of Inventory” held steady over the past year at 3.8 months – there was zero change in May, though we’ve seen some changes in the previous months this year.
So, what does “months supply of inventory” mean?
This number refers to how many months’ worth of housing inventory is available on the market at any given time. Ultimately, this tells real estate agents how the market is performing and whether buyers or sellers are favored. Typically, a 5.5-month supply of inventory doesn’t favor buyers or sellers. However, a rating above 5.5 months is said to favor buyers while below 5.5 months is said to favor sellers.
The current climate is still in the sellers’ favor, though things may be slowing down and moving into a buyer’s market. Since the start of the year, we’ve watched the month’s supply of inventory steadily rise to its current rate. We’re eager to see what the summer months will tell us as they tend to be “busy” times for the real estate market.
As the demand for housing in Alachua County is fairly high, it’s also still likely that homeowners who are selling will receive offers closer to their listing prices, see faster contract-to-closing times, and ultimately feel satisfied with the entire process of selling. Homes have gained in value over the last year, too, so it’s possible that sellers will come away better off than expected.
If you’ve been considering selling your home but have been on the fence, the numbers from May 2018 are still indicating that the market is in your favor. We expect June’s numbers to be in a similar place as May 2018’s and have high hopes moving into July.
To start the process of putting your home on the market, get in contact with our office. Thomas Group is here for you every step of the way. We’ll help you close faster and get the best price for your home.