The outlook for residential real estate in 2023

NEFAR President Mark Rosener predicts a much calmer year with stabilized interest rates.

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In the world of Northeast Florida residential real estate, 2022 began with houses staying on the market for days rather than weeks or months. 

Prices escalated. Cash buyers from other states didn’t flinch at what longtime residents thought were outrageous prices because those new Floridians saw them as bargains.

Then in the summer, interest rates spiked and inflation slowed a still tight market.

“We’ve experienced two very different markets,” Northeast Florida Association of Realtors President Mark Rosener said.

“I think all of the signs over the last six months have been that of a stabilizing market.”

Rosener looked back on his year of leadership. 

Membership at NEFAR has grown to more than 11,000.

On the state level, NEFAR and other state-related programs helped lobby for the passage of the Florida Hometown Heroes Housing Program, which offers down-payment assistance to first responders, teachers and nurses.

Locally, NEFAR members volunteered to build accessible ramps, participated in a waterway cleaning project in July and took part in a meal-packing event in the fall.

NEFAR formed a Diversity, Equity and Inclusion Committee to address those issues in the organization and the market in general.

Looking toward 2023, supply remains low. 

As of November, the inventory of single-family homes, town homes and condominiums was 6,604 in the Northeast Florida market comprising Duval, Clay, St. Johns, Baker, Putnam and Nassau counties. That is 125.4% higher than a year ago.

While inventory is growing, it still leaves about half of NEFAR’s members without clients. The result will be a decrease in active real estate agents in 2024, Rosener said.

“The real estate market was very good in 2020, 2021 and into 2022. There were a lot of people who got into the business because they may have lost their job due to the pandemic. There will be folks who have struggled a little bit and may go back to their previous careers. I would anticipate that we will see fewer Realtors in 2024.”

Predictions for 2023 show the region’s real estate market stabilizing, Rosener said.

He said the market was volatile during the second and third quarters of 2022.

The median price of a home in Northeast Florida in April was $378,995. After climbing to $399,900 in July, the median price dropped to $376,385, the November report showed. 

Prices are still 8.2% higher than a year ago.

Rosener expects interest rates, now about 6.5%, to settle in the mid-5% range by mid-2023. The median price should fall an additional 7% to about $350,000, he said, improving affordability.

“There was a time earlier this year when there was doom and gloom that values would go down. I don’t think that is going to happen. There should be no devaluation of property values,” he said.

Rosener’s advice to 2023 President Diana Galavis is to be collaborative and trust her NEFAR officers.

“Lean on those you’ve selected for leadership and give them the authority to do what you have set out for them to do and let them go,” he said.

“Listen more than you talk.”