It’s an unexpected trend for summer in Florida

Treasure Coast home sales are continuing to slow, in some areas down nearly50% in July compared to the same time last year — an unexpected trend a ssummer typically is prime time for people to relocate to Florida.

Simultaneously, housing inventory is more than double what it was last year, according to market data released Aug. 18. It’s a welcome sigh of relief as the area experienced critically low levels mid-2021 that continued into this year.

This additional inventory could be helping to stabilize prices. The tri-county region saw a decrease in its median sale price last month. July was also the third consecutive month prices declined in Martin County.

Consistently rising inventory and decreasing sales may indicate the Treasure Coast housing market cool-down is here to stay. Here’s what industry experts predict:

Home sales continue to slow

Summertime, when school is not in session, is the most convenient time for families to move, and closed single family home sales typically increase this time of year. That hasn’t been the trend so far.

They’re down compared to July 2021 by: 46.9%: Martin  •  24.3%: Indian River  •  18%: St. Lucie.

June sales fared roughly the same, dropping: 32.7%: Martin  •  28.6%: Indian River  •  13.5%: St. Lucie

There are a few reasons home sales have declined in the last few months, said Joe Rosen, of EXP Realty based in Port St. Lucie: Higher mortgage rates, less competition and inflation.

“We were expecting higher (summer) sales,” Rosen said. “It’s just so many things added together that create this very intense, very high anxiety feeling.”

Prices stabilizing, but still high

Median home sale prices aren’t increasing at the same staggering rate seen last year and have even been fluctuating this year in Martin and Indian River counties.

All three Treasure Coast counties saw the median sale price dip from June to July, but overall this year, prices have increased: 1.4%: Indian River  •  8%: Martin  •  13 .1% : St. Lucie

One reason prices aren’t escalating as much is because of additional inventory slowing competition.  Before, buyers were vying for properties in high demand but low supply —forcing buyers to act quickly and pay top dollar.

Prices are still high, though, and likely won’t decrease significantly any time soon, experts predict. In July, the median sale price was: $565,000: Martin  •  $396,950: St. Lucie  •  $360,000: Indian River.

People are still being priced out of the Treasure Coast, Rosen said, because of higher sale prices, rising mortgage rates and overall inflation that has been forcing residents to spend more on other necessities such as gas and food.

Mortgage rates have been steadily increasing throughout the year. In Florida, a conventional, 30-year fixed mortgage
rate was 5.6% as of Aug. 19, according to financial services company Bank Rate.

“This is scaring people who can buy, and can afford it, but just have high anxiety so they’re not going to make that move in this market,” Rosen said.

Housing inventory increasing

The housing inventory has been increasing throughout the year — up every month since January in Martin County, and consecutively since March in St. Lucie and Indian River.

There are a few reasons why more existing homes were going on the market:

• More locals selling to relocate during summer
• Sellers capitalizing on high sale prices before the market cools
• Loosened CO VID-19 restrictions nationwide. People aren’t feeling the need to move to Florida, and newcomers are moving back to their home states.
• Houses aren’t flying off the market as fast because of rising mortgage and insurance rates.

From January to July, active listings in the Treasure Coast market jumped: 224%: Martin  •  140%: St. Lucie  •  96%: Indian River.  The tri-county region is inching closer to having a “healthy real estate market,” defined as about three to four months worth of supply.

In July, there was: 2.6: Martin  •  2.5: Indian River  •  2.3: St. Lucie.  The additional supply is pushing the market to stabilize, Rosen said. There is less competition for buyers, he added, who now aren’t having to offer tens of thousands more over asking price.

“We’ve kind of trended from a strong sellers market — a record-setting sellers market — to now it’s more of a neutral market,” Rosen said. “Data is trending downward, so it wouldn’t surprise me at all if in a month or two we’re over four months worth of inventory.”

Is the real estate market cooling?

The short answer: Yes, Rosen believes.

Houses are still selling fast — the telltale sign demand is still there. It’s not as competitive as it has been in past months though. In July, the median time to go under contract — meaning when the seller accepts an offer from a buyer —was: 11 days: St. Lucie  •  14 days: Martin  •  19 days: Indian River.  This shift in the real estate market is still early, Rosen said, and it could be months before significant changes take effect. But it is imminent.

“I would absolutely say that it’s cooling,” he said. “We’ll see blips … but we now have multiple months of trending data with increasing inventory, increasing (mortgage) rates and stagnant or even decreasing sales. There’s no catalyst to change that in the foreseeable future.”

Catie Wegman is TCPalm’s housing and real estate reporter. You can keep up with Catie on Twitter @Catie_Wegman, on Facebook @catiewegman1 and email her catie.wegman@tcpalm.com.