Here is the lowdown on the 2023 market trends for real estate in Central Florida as we move into 2023. There are some things to look out for (like rising insurance premiums in Florida) but also some positive trends that could make it easier to buy a home this year.
Market Slowdown
After real estate sales set records in 2021, the 2022 market has definitely slowed due to a number of factors including higher interest rates and inflation. Sales have dropped 45.5% compared with November of 2021.
Prices of Homes
The median price of a home is $360,000, up 11% from this time last year. Despite a strong year-to-year gain, this median price reflects a slight drop over the last few months.
Time it Takes to Sell
Homes are taking longer to sell. In November 2022 homes were on the market for 34 days, up from 20 days in November 2021.
Number of Houses for Sale
The number of houses for sale is still low, but climbing. We’re now at a 3.61-month supply (a 6-month supply is a balanced market.
The Rising Cost of Insurance
Insurance costs will continue to rise due to recent storms. We can all expect a 10% rise in premiums this coming year.
What this Means for Buyers and Sellers
Certainly, as the market cools, the price of homes will at least not accelerate as quickly. For buyers, more inventory and longer days on the market mean more options, and higher interest rates and insurance premiums mean a smaller pool of buyers because some hopeful buyers can no longer afford to purchase. The days of multiple competitive offers are over.
For sellers, attracting a buyer means realistically pricing your home and expecting fewer offers and more time on the market. The bigger question for the coming year is what happens in the economy: interest rates, inflation, and employment all have direct impacts on the 2023 market trends in real estate.
The bottom line in real estate ownership is affordability. The recent softening of prices reflects the pressure interest rates put on that affordability – insurance premiums will reflect that too. The good news is that employment remains strong, inflation is coming down some, and mortgage interest rates are still low historically. And Florida remains a place people want to live. Like most investments, the long-term view keeps the ups and downs in perspective. Real estate remains a solid investment.
