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Prices rise, market slows during holiday season

December 18th, 2023 · Leave a Comment

As the housing market continues to recover from the pandemic, market numbers for November are fairly typical for the holiday season.

Closed sales in November were down 14.5% to 1,384, and this was also mirrored in the number of new listings, which fell 5.8% to 2,418. However, prices continued to creep upwards, and November’s median price of single-family homes for the region registered at $390,280, which was near the high of $395,000 that it posted in July 2023. Also, the median number of days homes lingered on the market was 42, a 5% increase over October.

“Not only were buyers pausing, so were sellers,” said 2023 NEFAR President Diana Galavis. “New listings slid down slightly from the previous month. But if you compare year over year there are more new listings on the market in November 2023 than at the same time last year.  The monthly supply of inventory for November was up to four months, and this is a significant increase from 3.2 months in October,” she said. “A stable market is six months’ worth of inventory. More available inventory on the market is good for buyers as they search for a home in North Florida.”

Pending sales dropped to 1,304 for the region during November, a slowdown of 5.8%. “Watching pending sales slow for the month of November and higher median days on market showed a direct reflection of higher interest rates,” Galavis explained. “Buyers paused as the market was in high fluctuation,” she said.

Perhaps the biggest indicator of a shifting housing market is reflected in the Active Inventory and the Months’ supply of Inventory numbers for November.  The Months’ supply of Inventory for single-family homes in the six counties of Northeast Florida has been steadily climbing. In November, it increased 26.2% to four months, while the Active Inventory for the region rose 7.8% to 5,579 homes. This shows that Northeast Florida is getting closer to a balanced market of 5-7 months of available homes, that was normal prior to the pandemic.

Although homes took longer to sell in November 2023 than the previous month, homes are spending less days on market than they did the same time last year, which is surprising.

“Even with higher interest rates and a significant dip in closed sales, the median sales price increased by 4%.  Buyers are finding that North Florida is a place where they want to work, play, and call home,” Galavis said.

Even with the increase in inventory, the region still has a way to go before it can be considered a buyers’ market. Homes continue to be expensive in Northeast Florida, with the region’s Home Affordability Index for single-family homes continuing to hover at 63, an all-time low.

The Housing Affordability Index measures housing affordability for the region. In other words, it measures 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.  This index measures affordability factors for all homebuyers making a 20% downpayment. An index of 100 is defined as the point where a median-income family has the exact amount of income needed to purchase a median-priced existing home. An index value over 100 means that the family has more than enough income, while a value below 100 means that a family doesn’t have enough income to qualify for a mortgage loan.

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

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