Traditionally, with the approach of Thanksgiving, the housing market slows as both buyers and sellers begin to reflect on the holidays. However, observing a longer data history, this is by far the biggest seasonal slowdown seen at this time in many years.
With few exceptions, the number of days houses sat on the market increased along with active inventory throughout the region. And prices remained high.
“The monthly supply of inventory in the region increased to 3.5 months,” observed NEFAR President Diana Galavis, noting there was a 19% increase since September. “Overall, the Northeast Florida market is strong with the sales median holding with very little change.”
Even with the increase of inventory, the region still has a way to go before it can be considered a buyers’ market, where six to seven months of inventory is for sale. And one thing is for certain, homes have never been so expensive in Northeast Florida. The region’s Home Affordability Index for single-family homes slid 4.5% to 63, registering at an all-time low.
The Housing Affordability Index measures housing affordability for the region. In other words, it measures whether a typical family earns enough to qualify for a mortgage on a typical home, based on current interest rates, median income and median home prices. A higher number means greater affordability.
This index measures affordability factors for all homebuyers making a 20% downpayment. An index of 100 is defined as the point where a median-income family has the exact amount of income needed to purchase a median-priced existing home. An index value over 100 means that the family has more than enough income, while a value below 100 means that a family doesn't have enough income to qualify for a mortgage loan.
The high cost of housing has a lot to do with high interest rates, Galavis said.
“Interest rates reached the highest levels in October,” she said. “Buyers were cautious and took a little longer to make offers, which reflected in higher median days on market. Closed sales slid down. The home affordability index had a slight dip. The cost of goods, services and borrowing money is much more expensive today than a year ago. Buyers are taking a pause to see which direction the Federal Reserve, stock investments and the real estate market will move.”
In St. Johns County, median prices for October increased 0.9% to $540,000 for single-family homes. The median days on the market jumped up 14% to 49. Month-to-month, closed sales fell 2.0% to 401, pending sales dropped 4% to 407, and new listings rose negligibly 01% to 700.
Active inventory rose to 1,675 homes, an increase of 5.1% from September, and 4.2-month supply. The Home Affordability Index slid downward, 4.3% to 45, indicating St. Johns County is the most expensive Northeast Florida county to live in.
In Duval County, the October median price of single-family housing was $320,000, a 3.6% dip downward from September. The median days on the market in October increased to 38, a 22.6% hike from the month before. Month-to-month, closed sales fell 12.8% to 765, pending sales rose 4.7% to 795, and new listings increased 6.9% to 1,415. Active inventory for the county rose 11.2% to 2,422 homes, a 3.2-month supply. In October, the Home Affordability Index remained stable from the month before at 75.
