If interest rates drop as predicted in 2024, Northeast Florida’s residential real estate market could see more sellers as well as buyers as both sides see greater incentive to do deals.
Affordability will be another key factor as prices fluctuate.
Northeast Florida Association of Realtors data shows the median price of a single-family home rose more than $23,000 from January through December 2023.
NEFAR tracks home sale information for Baker, Clay, Duval, Nassau, Putnam and St. Johns counties.
The median price began at $360,990 and finished the year at $384,750. It reached a high in July at $395,000.
Over the year, the selling and buying advantage switched as the median number of days a house was on the market changed.
It fluctuated from 57 days in January to 48 in December. In May and August it fell to a low of 33 days. The fourth-quarter range was 43 to 48 days.
Realtors say buyers are taking longer to close a deal because of higher inventory.
In 2020, houses were selling in less than a week because of low supply and an influx of cash purchases from out-of-state buyers and companies purchasing quantities of rental properties.
“More inventory potentially coming on the market allows for buyers to take a breather, especially with the interest rates being a little bit more stabilized to shop longer,” said Diana Galavis, the Northeast Florida Association of Realtors 2023 president.
Another factor helping the buyer is that the Home Affordability Index may show signs of rising in 2024.
As defined by NEFAR, the affordability index 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.”
The closer the index is to 100 or higher, the better for a buyer, according to NEFAR.
The index started the year at 73 and dropped to a low of 63 in November, rising to 67 in December.
Rory Dubin, the 2024 NEFAR president, is watching the index.
“It is showing positive signs, not year-over-year, but at least month-over-month when we’re looking at the trend line,” he said.
“We have some breakouts. Look at our Beaches area. The Beaches tend to be more expensive overall than Duval County at large. But in the Beaches area, the affordability index went up 17%. So those are positive trends for the buyers as well.”
In November the index was 36 and rose to 42 in December.
For the year, the Beaches index reached a high of 47 in February and a low of 34.5 in September.
Talk of possible interest rate reductions in late 2024 may persuade both buyers and sellers to become more active.
“I have a mortgage below 3%. I have no incentive to sell my home whatsoever,” said Meagan Hart Perkins, the 2024 president of the Northeast Florida Builders Association.
“But if interest rates start to decline, then I am more apt to put my house up for sale and purchase my forever home instead of being stuck in my starter home.”
There may be sticker shock for locals looking for a new home, but buyers from larger metro areas, California and the Northeast see a bargain.
“I would say that Northeast Florida remains one of the more relatively affordable places not only in terms of affordable housing, but how much house or property value you get for what it costs relative to not only Florida but the Southeastern United States,” Dubin said.
St. Johns County remains the most expensive in the region.
The median price started the year at $528,245 and ended at $564,787, spiking in July at $585,000.
Twice – in February and in November – the price fell to $510,000.
Nassau County homes are the second-most expensive.
The 2023 median price started at $384,318 and ended at $424,995, reaching a high of $449,883 in November.
It fell to $368,480 in February but stayed in the $400,000 range or higher for nine of the last 10 months.
Duval County saw a steady climb, starting at $308,750 and ending at $334,990.
Clay, Baker and Putnam counties stayed relatively steady throughout the year.
Clay County’s median price was $370,000 in January and $349,990 in December. The low for the year was $339,995 in April.
Baker County started at $285,495 and ended at $288,990, peaking in October at $305,500. The low was $275,000 in September.
Putnam County was the only county that ended the year with a lower median. It started at $245,995 in January and ended at $232,500 in December, peaking at $260,490 in June. The low was $200,000 in February.
The National Association of Realtors predicted that sales of existing homes in 2024 will rise about 14%, from 4.1 million to 4.7 million.
“Metro markets in southern states will likely outperform others due to faster job increases, while markets in the Midwest will experience gains from being in the most affordable region,” NAR Chief Economist Lawrence Yun said in a news release.
Yun expects a 30% increase in supply due to existing homeowners returning to the market because of lower inflation, interest rates and less concern about a recession.