Potential homebuyers in South Florida have been waiting with baited breath for signs that more inventory might hit the market, and ease the fierce competition.
Lack of inventory during the pandemic fueled high home prices as the region saw an influx of buyers from other parts of the country. That momentum, in turn, created a fear of missing out, resulting in an even greater shortage.
Experts now say that there are indications that more inventory could be coming to the market, and that buyers may be pumping the brakes.
For South Florida, new listings have seen a slight improvement, said George Ratiu, senior economist at Realtor.com.
“We are still seeing new listings down compared to a year ago, but that decline has moderated,” he said.
In January of 2022, new listings were down by 18% compared to the year before. In February, new listings were down by 10%; March was 12% and April was 9%.
“The trend here shows that we expect to see more homeowners bring homes to the market as the pandemic comes down,” he added. “We are moving back to the single-digit decline and it seems to be moving in tandem with the national level. Towards the late summer [and] fall we might see increased inventory in South Florida.”
Agents seeing slight increase
Real estate agents are seeing slight uptick in inventory coming to the market in South Florida, though it is not enough to meet demand or create balance in the market.
“It’s still very much a seller’s market,” said Jeff Grant, realtor with ReMax in Palm Beach Gardens. “The inventory gains have been modest. I would guess that there are 10-20% more homes for sale than there were 3 months ago.”
Other agents also report seeing small increases of inventory coming to the market when compared to the year before. According to real estate agent David Gunther with Lang Realty in Delray Beach, there were about 7-8 single-family homes available for sale this time last year priced in the $700,000s in central Delray Beach. Now, there are about 22 properties listed.
“Properties are still being absorbed quickly, but the confidence is lower,” Gunther said. “The interest rates are probably bringing sellers to the table.”
Interest rates pushing sellers, quelling buyers
Inventory is still imbalanced, with not enough properties out there to meet buyer demand. But real estate agents say that they have seen more sellers motivated, in part, by rising interest rates.
Interest rates have climbed to about 5.6%, rising rapidly over the past six months. Some sellers are putting their homes on the market sooner rather than later, believing that the higher rates will make buyers less interested.
“Buyer demand is less than normal this year as compared to last year, which isn’t surprising given that interest rates have been raised several times already this year and prices have increased so drastically,” said Brian Peal with the Pearl Antonacci Group in Boca Raton.
Realtors say that the sellers most active right now are those with more flexibility in their lives, who don’t need to immediately find a new home in the area.
“Most people that I’ve worked with that are listing their homes have been retirees and investors that are starting to sell off their investment properties, second homes, or leaving the area for a less expensive market,” said Grant.
Though buyer demand has slightly tapered off recently, the buyers that remain in the market are still competitive, experts said.
“There may be fewer of them, and it’s not as much of a frenzy, but it’s still a super seller’s market,” Gunther said.
He recently had an open house for a townhome for sale priced around $1 million and about six buyers came to the viewing. A year ago, he said there probably would have been a rush of 25-30 people showing up.
“I expect the market will still be a seller’s market but inventory will normalize. It should take a little pressure off of buyers,” Grant said.
Celebrating PaytoLet's one-year anniversary! Learn how we've grown and surpassed unexpected challenges in real estate home search.