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Housing prices drop yet Northeast Florida becomes less affordable

October 12th, 2022 · Leave a Comment

The Northeast Florida housing market continued to show a minor drop in prices in September. With the holidays on the horizon, a market slowdown in the fall is typical, but considering the historic heights that prices have risen during the recent pandemic, the question remains: How much of this slight slippage is due to seasonal change or rather by current economic conditions driven by rising interest rates?

Following the same trend that it has experienced over the past several months, prices continue to inch down, while month-to-month days on the market, active inventory, and months of supply trend upward. Even with slightly lower prices, housing continues to be less affordable in Northeast Florida, according to the Housing Affordability Index, which measures housing affordability by evaluating whether a typical family earns enough to qualify for a mortgage on a typical home based on current interest rates, median income, and median home prices. A higher number means greater affordability. In September, the Housing Affordability Index for single-family homes, condos, and townhouses slid 3.9% to 74 from 77. Affordability for only single-family homes declined by 4.2% to 69 in the region.

Considering the combined single-family, townhouse, and condo market’s month-over-month numbers for September, the median price was $354,990, down 2.7%, while days on the market rose to 37 days, up from 31 days in August, and the end of summer’s active inventory registered at 6,421 listings, increasing from 6,348 since August. Months of supply rose to 3.4 months, slightly higher than 2.7 the month before. Closed sales tumbled to 1,921 in September, and pending sales took a dive to 1,979 from the month before.

 “Closed and pending unit sales suffered from Hurricane Ian’s impact when the powerful storm interrupted services during the last week of the month, a time when many properties close and/or go under contract. Many of the properties scheduled to close in that last week should shift to close in the first half of October. With that said, these indicators are down 23.3% and 17.4% month over month respectively,” said Mark Rosener, president of the Northeast Florida Association of REALTORS®.

“The thoughts and prayers of the entire REALTOR® community go out to our friends and neighbors throughout other parts of the state that suffered the biggest brunt of Hurricane Ian,” Rosener added. “Those in the Southwest region of Florida suffered great losses, and while we had an impact here in Northeast Florida, nothing compares to the devastation in the Southwest part of the state,” he said.

Prices for single-family housing in Northeast Florida dipped 2.6% to a median price of $380,000, while the median days on the market rose 20% to 36 days. Active inventory spiked 12.8% to 5,315 homes a 49.1% rise to a 3.4-month supply of inventory. The affordability index for the region for single-family homes also declined by 4.2% to register at 69.

In contrast, the median price of condos in Northeast Florida in September inched up 2.6% to $254,000, while the median days on the market rose 14.3% to 32 days. Active inventory gained nearly 10% to 493, a 2.6-month supply. The affordability index for condos dropped 8.4% to register at 103.5 in September.

Meanwhile, the median price of townhouses slipped 1.7% to $259,940, while the median days on the market rocketed 42.9% to 50 days. Active inventory rose to 582 homes, a 22.8% increase and a 3.1-month supply. The affordability index for townhouses skidded down 4.7% to register at 101, a 5-point difference from August.

“While still in a “sellers” market the trend continues to move toward a more balanced market,” Rosener said. “Weakening demand due to affordability issues – mainly higher mortgage rates — and growing inventory points in that direction.  The 3% decrease month over month in the median price is expected as the market stabilizes from the frenzied pace that was set in 2021 and early 2022.  I anticipate that the median price will continue to fluctuate month to month in the 3-5% range in either direction for the balance of the year.”

NEFAR’s market reports are available at nefar.com.

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