Let’s find out. In this April 2023 Market Update, we’ll examine the current state of the housing market in the Parkland and surrounding communities of South Florida.
When evaluating the market, it’s essential to look beyond closed sales prices, which can lag behind the present reality by 60 to 90 days. Instead, let’s focus on what’s happening right now.
The first significant statistic to consider is the number of new listings entering the market. In March 2023, compared to the same period in 2022, there was a decline of 25.4% in new listings. This downward trend in supply has been noticeable recently, with a brief increase in inventory followed by another decline. Many homeowners have opted to refinance their homes, taking advantage of historically low interest rates. As a result, fewer homes are hitting the market, creating a shortage of supply that has become familiar over the past couple of years.
Simultaneously, the number of homes pending and coming off the market has also decreased by 22%. This decrease in both new listings and sales indicates that there are currently fewer buyers actively seeking homes, particularly with the current interest rates.
However, the decline in new listings surpasses the decline in demand, resulting in a situation where supply is lower than demand. Historically, such a scenario tends to drive prices upward.
Another crucial factor to examine is the number of days a home stays on the market before going under contract. In the past month, the average time increased to 31 days, representing a significant rise of 338% compared to the same period last year when it was just seven days. Homes, on average, are taking longer to sell. Nonetheless, well-priced homes located in desirable neighborhoods, updated, and accurately priced, are still selling rapidly and frequently receiving multiple offers within days. So while the overall market indicates an extended sales period, appealing listings continue to attract swift attention.
Considering the close price to the original list price ratio provides further insight. Last month, the close price to list price ratio was 94.2%. This means that sellers are negotiating and offering discounts from the original price, taking into account price reductions and adjustments. In contrast, around the same time last year, this ratio stood at 100.7%. The decrease in the ratio suggests that some sellers initially priced their homes too high and subsequently reduced the asking price to attract buyers.
Lastly, examining the number of months’ supply of inventory is a crucial indicator of market dynamics. A supply of fewer than six months’ worth of homes generally indicates a seller’s market, while anything above signals a buyer’s market. Presently, in the Boca Parkland and Coral Springs areas, the average months’ supply stands at 2.58. It’s important to note that the supply varies between locations, with Boca experiencing a higher inventory and Parkland having a lower inventory. Therefore, depending on the area of interest, buyers may have different degrees of negotiating power. With 2.58 months of inventory, the market still leans toward being a seller’s market. However, compared to the height of the COVID-19 pandemic, when there was only one month of inventory, there is now approximately two and a half times more inventory available. Despite this increase, the limited availability of homes for sale maintains the seller’s advantage.
What does all this mean for buyers and sellers in the Parkland and surrounding communities of South Florida?
If you’re a buyer, it’s crucial to recognize that well-priced homes with desirable features and in good school districts still sell rapidly. When you come across a home that ticks all the boxes, being fully updated with a new roof and impact windows, it’s likely to attract significant interest and sell quickly if appropriately priced and marketed. Therefore, as a buyer, it’s essential to have your finances in order, obtain pre-approval, and be prepared to make strong offers. Despite national media portrayals, the market remains highly competitive for appealing properties.
On the other hand, if you’re a seller, pricing your home correctly remains the key to success. Even in cases where a home requires significant improvements, selling at an appropriate price that accounts for the necessary work can still attract buyers and generate multiple offers. Although prices have slightly decreased compared to the previous year’s highs, aligning your price with market expectations and not attempting to surpass the previous peak will likely result in a successful sale. Some homes that have been on the market for an extended period have experienced price reductions, primarily due to their initial overpricing. However, serious sellers who approach the market realistically can still achieve satisfactory sale prices.
To summarize the April 2023 housing market update for the Parkland and surrounding communities, the supply of new listings has decreased, resulting in a shortage of available homes. Despite this, homes are taking longer to sell on average. Well-priced properties continue to attract quick attention and multiple offers. Sellers who price their homes correctly can expect successful sales, although there have been some reductions for overpriced properties that have lingered on the market. Buyers should be prepared for a competitive market and act swiftly when they find a suitable home. Overall, the South Florida housing market in the Parkland communities remains in favor of sellers, albeit with slightly more inventory compared to the previous year.
If you have any questions about how this market update affects you as a buyer or seller, whether you’re already in South Florida or planning to relocate, feel free to contact Rusty Hanna at 954-444-8686. We’re here to help you navigate the dynamic real estate landscape of South Florida.