Low Sales Volume, Increased inventory, & Higher Prices are a strange mix ...
The market across the country and here locally has stayed flat over the last month. We are experiencing an odd mix of low sales volume, increasing inventory, and rising home prices. Usually, when inventory goes up and sales volume stays flat this means lower prices. But we are in odd times. Although we saw a spike in year-over-year inventory for single-family homes (2981 up from 1445) you have to remember we are still bouncing off record low inventory numbers and have a ways to go before reaching pre-2020 inventory numbers. In practicality, what I am seeing are beautiful turn-key homes if priced correctly are selling very fast, but if a house has any flaws it sits for months waiting for the right buyer. This is how things have been for a while now and until something shakes up the market I do not see it changing.
All this flips when you are talking locally about townhomes and condos. Inventory is way up, sales are way down, and prices are dropping. Lots of reasons why but it boils down to we just built a lot of condos and townhomes and the supply is way up in proportion to the number of buyers. This will change as we slow down on building projects. So if you are thinking of buying a condo or townhome and are not actively shopping over the rest of 2024, there is a real chance you are going to miss a pretty big buying opportunity.
A couple of things to keep in mind...
6.95% - This is the current average interest rate on 30-year fixed mortgages. It is what the data says and what I am seeing in my closings.
7.8% appreciation - Year over year the average home in St Petersburg has increased in value 7.8%. This appreciation and the tax benefits are why for decades now home ownership has been the number one driver of personal wealth growth in this country.
Is the market going to crash? - By far the number one question I am asked. This makes sense since most of us still have 2009 echoing in our ears. But one data point pushes hard against a coming crash. Homeowners are at an all-time high record in debt-to-home value ratio. Meaning, that the average homeowner has a lot of value in their home. Prices could drop 10% and very few homeowners are going to be underwater and have to sell. The dominos are just not lined up like in 2009. Could a different black swan event occur? Of course! But homeowners are more prepared now for a surprise to the housing market than at any other time in history.
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Here is a 30-day snapshot of a few St. Petersburg areas:
INDIAN ROCKS BEACH
Active Statistics
Active Listings: 81
Pending Listings: 13
Avg. Days on Market: 86
Avg. Listing Price: $1,278,000
Avg. Listing Price per sq.ft: $709
Sold Statistics
Total Sold: 11
Avg. Sold Price: $1,100,000
Avg. Sold Price per sq.ft: $579
MADEIRA BEACH
Active Statistics
Active Listings: 146
Pending Listings: 38
Avg. Days on Market: 129
Avg. Listing Price: $973,000
Avg. Listing Price per sq.ft: $676
Sold Statistics
Total Sold: 23
Avg. Sold Price: $877,000
Avg. Sold Price per sq.ft: $613
GULFPORT
Active Statistics
Active Listings: 76
Pending Listings: 10
Avg. Days on Market: 66
Avg. Listing Price: $482,000
Avg. Listing Price per sq.ft: $319
Sold Statistics
Total Sold: 9
Avg. Sold Price: $375,500
Avg. Sold Price per sq.ft: $403
Want info on a specific neighborhood? Email me at ao@aaronoetting.com and I will send it over!