By Melissa Forte-Litscher
As we head into the busyness of the holiday season and look towards the new year, many of us are hearing doomsday reports in the news and wondering what the future of real estate looks like. Well, according to Florida Realtors Chief Economist Dr. Brad O’Connor, “In terms of closed sales in Florida, 2022 started out a lot like 2021. But, soon, the shock of the rapid rise in mortgage rates caused many buyers to suspend their home searches and sit on the fence; some even had to drop out when their planned budget for a home couldn’t keep pace. As a result, the second half of 2022 has seen the level of existing home sales in Florida more-or-less fall in line with the typical pre-pandemic seasonal trends.” O’Connor added, “The fact that monthly sales still remain in the neighborhood of pre-pandemic levels despite today’s significantly higher home prices and mortgage rates only illustrates that despite these headwinds, housing demand in Florida continues to receive support from its recent surge in post- pandemic in-migration, vacation home purchases, and the ever-increasing number of millennials looking to find a home for their growing families.”
Locally, our numbers reflect a market returning to a more “normal” pace in Okaloosa County. In October, 418 properties sold, 1,297 properties were actively for sale, with a median time from listing to closing of 63 days, and a median sale price of $345,000.00. The average sale price was also 11% higher than October of last year. These are numbers from all property types throughout the county, and your favorite Realtor can help you with the numbers for specific types and cities which are of interest to you. A calmer market means your lenders, appraisers, inspectors and other industry professionals who help with your sale or purchase can provide their services without the hectic, high pressure we saw in the early months of this year. The good news is homes that are priced well for their location, condition and age are still selling.
If you are interested in selling your home, a recent article from realtor.com outlined tips homeowners can use to sell their homes in markets like this. You can offer an interest rate buy down. Higher mortgage rates mean monthly payments become more expensive, making some buyers hesitant to purchase real estate. You, the seller, pay money to the buyer’s lender to lower (or “buy down”) their interest rate to make their monthly payments more affordable, therefore more attractive to potential buyers. Repair big-ticket items if possible. In economic uncertainty, many buyers are wary of buying homes that need expensive repairs, like a new roof or HVAC systems. If you want your home to sell, consider making those repairs either before you list or as part of your real estate deal. If this isn’t possible for you, offering a home warranty or escrowing funds from the sale proceeds at closing could be an option that works for both parties. You can offer something unexpected. Sellers may need to think outside of the box to sell their property. One idea to grab buyer attention is to offer something unexpected with the real estate deal. This may be something physical like a new TV, or brand-new appliances, or maybe leaving the riding lawn mower. Or consider providing a year’s worth of lawn service, housekeeping, or pest control. This is a gift that could sweeten a deal and help a new homeowner with costs that they may not have considered incurring.
If you are looking to purchase a home, the good news is there are more homes on the market and more time to look at them and make an informed decision. But don’t wait if you fall in love with one, someone else might as well. Sellers are also more willing to help with closing costs or prepaids during negotiations. And yes, the interest rates and home prices are higher than earlier in the year, so work closely with your team, your agent and lender, to find the best option for your situation.
Some tips for Buyers: Be honest with yourself and your lender about your finances, income and outgoing payments, don’t forget the little things like cell phone bills. Be aware if some of your income is temporary, such as child support, that it might help you qualify now, but if it stops, ensure you will still be able to make your monthly commitments. If this is your first time purchasing a home, there are programs to help you get into a home with little money down, and there are areas of our county that you can purchase without a down payment. Keep in mind that even without a down payment, such as a VA loan, there are costs associated with purchasing that you will need to pay for out of pocket. Inspections, appraisals and insurance pre-payments are a few of them. Make sure you get the full financial picture to protect your future in a home you own. It will be somewhere you can pick out the paint color and the pets you desire!
Glad tidings to you and your family. Here’s wishing you all peace, hope and joy! Merry Christmas and Happy New Year!
