According to economists from the Florida Realtors Association, in the first quarter of 2022, half of the new properties went under contract within the first 12 days. This observation is one of the indicators of changing trends in the market.
The analysis by Florida Realtors was based on key market indicators such as the number of closed sales, median sales prices, affordable housing stock, and etc.
In the first quarter of this year, the median time to close a sale agreement (note: any type of property) dropped to just 12 days in Florida. This means that half of the new housing units on the market are bought in the specified period.
For comparison, a year earlier, in the first quarter of 2021, it took 24 days for the same volume of real estate. Thus, the sale time was halved in year-to-year terms. The change in the median of this indicator can be monitored using the interactive SunStats tool by Florida Realtors.
Another metric, cumulative sales frequency, also supports the information provided by the median sales time. A change in this indicator is noticeable among all types of dwellings.
On this basis, it concludes that 68% (or 2 out of 3 properties) in Florida are sold in the first 30 days from entering the market, according to the data for the first quarter of 2022. For the same period in 2021, this could be relevant for 54% of units. In 2020, it was true for only 41%. A rapid increase in the number of properties sold in the first 30 days becomes obvious.
There are several factors behind this increase. These are the growing role of the home in the life of an average US resident and the image of real estate as a safe buy-to-invest option in turbulent times. A huge role is also played by the growing interest rates on mortgage lending, which urges people to buy a home while the loan conditions are still favorable.
This is particularly the case with the young people of Florida. Rising interest rates push this age group to buy a home “here and now”.
People who can still purchase a house in the state are under increasing pressure caused by rising interest rates on mortgage lending. About 36% of people in the Millennial age group said that the moment when interest rates rose in the U.S. was unexpected and happened earlier than they expected.
According to rental portals, about a third of homeowners indicate that rising interest rates have had a significant impact on their sales plans. The number of requests has especially increased from younger people.
In comparison, Generation X and Baby Boomers, with only 19% and 13%, respectively, reported the need to hurry up with the purchase.
About 13% of Millennials are ready to wait for a better state of the market, with lower, competitive prices. There are about 5% of people with similar thoughts among Generation X.
New buyers in the market are much more sensitive to interest rate changes in the market compared to previous ones. Previous buyers were looking for housing before and during the pandemic. Currently, about 28% of home buyers say that interest rates play a major role in determining when to buy a property. Previously, only 18% of potential homeowners mentioned interest rates.