If you are looking to sell your home now or considering the possibility of selling within the next few years, here are our top five reasons why Florida homeowners may want to consider listing their home now.
1) Strongest seller's market in decades
We are currently in one of the strongest seller's markets seen in several decades. Per the Florida Association of Realtors, the average Florida inventory of homes for sales is -36.1% from this same time last year. Florida is now averaging a 2.3 months of housing supply for single family homes vs 3.6 months supply from August 2019. As a comparison a 5.5 months supply is considered to be a balanced market, favoring neither buyer nor seller. When the number is less than a 5.5 month supply, it signals a seller's market. Higher than 5.5 months indicates a buyer's market. Taking this guideline into consideration we can see that the current 2.3 month supply is demonstrating a strong sellers market.
2) Very low inventory of homes for sale equals higher selling prices
The result of a strong seller's market means higher sales prices for sellers. We are witnessing spikes prices upwards of 10% from 2019. September 2020 is seeing even higher price jumps from August 2020. We are witnessing numerous offers above listing prices for properties as hungry buyers compete to out-bid each other. The low inventory is expected to remain through the remainder of 2020, and may get even tighter if Covid-19 cases rise in the Fall months. This is partly due to both reluctancy on the part of the sellers to list their properties, as well as potential buyers if safer at home mandates emerge. The Covid restrictions from March & early June have led to pent up buyer demand leading to a tremendous surge of home sales with buyers eager to purchase right now, before continued price increases price them out of the market or any potential stay at home orders emerge.
3) Mortgage interest rates at record setting low's below 3%
Interest rates are at a record setting low. We are seeing interest rates in the lower 3% and below. It’s important to note how historic this is, and why it’s sending buyers scrambling. Just 10 years ago, interest rates were above 4%. Twenty years ago, rates were above 6%. And 30 years ago, rates were above 8%. The short story is, buyers’ purchasing power just got a lot stronger raising the ability to purchase properties at a higher price.
4) Home buyer needs in Florida have changed
Buyers are eager to swoop up the larger spaces they now want and need. With approximately 1000 people a day moving into Florida from primarily congested NE Cities and Chicago. Homes with room for offices, larger backyards, and Florida’s Tropical atmosphere are in big demand. Another trend is pre-retirees who are now able to work remotely from these regions, are selling their child-raising homes, and paying cash for appealing Florida condos in order to downsize and avoid the extensive maintenance of a single family home.
5) Mortgage forbearance ends December 31, 2020
Mortgage forbearance is expected to end December 31st, 2020. It is highly possible that when mortgage forbearance ends we will encounter a glut of inventory with a large number of homes hitting the market for sale. It’s uncertain how the market price of properties will be affected at that time. One thing we do know is that an increase of months supply towards the equilibrium can negatively impact the state of a strong sellers market.
Today, sellers can benefit greatly by taking advantage of the current market conditions. With the sudden rise in buyer demand, low inventory failing to meet those demands, and record low interest rates, sellers have a high chance of receiving top dollar for their properties as well as the opportunity to get their properties sold sooner than later.
In our next communication, we'll cover how you can list and sell your home safely during the Covid-19 pandemic.
If you have been considering whether right now might be a good time to list your home, please call us for a free consultation to answer any questions you may have. We are your partners, and we're here to help you navigate safely, securely and confidently, every step of the way.
