“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.”

Henry Ford

In the 2023-2026 Florida and Metro Forecast, Dr. Sean Snaith, the director of the University of Central Florida Institute of Central Forecasting said “The U.S. economy is either in or on the brink of a recession. Because of the forecasted shape of the recession: a gradual decline into recession and 12 or more months in the downturn followed by a gradual climb out of recession, we have dubbed the recession the Pasta Bowl Recession.” If you haven’t heard him speak, take the opportunity. He is very smart and very funny.

A few interesting predictions from the forecast are:

Real Gross State Product will mildly contract during the recession as growth will slow to -1.3% in 2023, turning positive in 2024 and accelerating in 2025 to reach 1.7% by 2026.

The unemployment rate was 2.9% in 2022. The recession will push up the rate to 4.6% in 2023, and to 5.8% in 2024, before easing slightly to 5.4% in 2025 and 5.0% in 2026.

Housing starts were 192,294 in 2022 with starts decelerating to 133,829 in 2023 and 134,755 in 2024 before ticking up to 149,920 in 2025 and 152,865 in 2026.

The Northeast Florida Association of Realtors (NEFAR) market stats for January 2023 show the median sales price is stable, closed sales are down, pending sales are up and inventory is up slightly from last month.

The median sales price of $330,000 is down 2.4% from December and up 3.4% from last January. There were 1,525 closings which is down 30% from last month and 33% from last year. This reflects the last several months of very low buyer demand.

There were 2,248 pending sales in January. This was the most since August of 2022. Nationally, pending sales increased for the first time since May.

“This recent low point in home sales activity is likely over,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”

There were 3,451 new listings in January which is 32% higher than the previous month and 19% higher than last year. The active inventory went from 6,231 last month to 6,403. When you read how much inventory has increased, keep in mind how many of the new listings were absorbed. There is plenty of demand and the spring buying season looks to be warming up.

I love this time of year with March Madness coming, Baseball Spring Training starting and the real estate market getting back to a more normal rhythm. If we can help you with any of your real estate needs, please let us know.

“Too many of us are not living our dreams because we are living our fears.” Les Brown

Don’t be fearful of the real estate market, it appears to be stabilizing after the wild ride we have been on.

I agree with Northeast Florida Association of Realtors (NEFAR) President, Mark Rosener’s comments on our local real estate market for December. He pointed out that the closed and pending sales, inventory and sales prices have been relatively stable for the last 3 to 4 months.

The median sales price of $337,745 is up 4.6% from last year, but down 0.9% from November. All counties had slight decreases in prices month-to-month except St. Johns County which was up 6.2%.

There were 2,096 closed sales which is down 35.9% from last year, but up 7.6% from November. Pending sales of 1,782 were down 29.6% from last year and down 1.8% from November.

National pending home sales slid for the sixth consecutive month in November, according to the National Association of REALTORS®. The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings — fell 4.0% to 73.9 in November. Year-over-year, pending transactions dropped by 37.8%. An index of 100 is equal to the level of contract activity in 2001.

“The market may be thawing since mortgage rates have fallen for five straight weeks,” Lawrence Yun, NAR Chief Economist. “The average monthly mortgage payment is now almost $200 less than it was several weeks ago when interest rates reached their peak for this year.”

Builder sentiment in the single-family housing market posted an unexpected gain in January, rising for the first time in 12 straight months. Economists had predicted a slight decline. Sentiment rose four points to 35 on the National Association of Home Builders/Wells Fargo Housing Market Index. Anything below 50 is still considered negative sentiment. The metric stood at 83 in January 2022.

All three of the index’s components posted gains in January: current sales conditions rose four points to 40, sales expectations in the next six months increased two points to 37, and buyer traffic rose three points to 23.

Most of the builders and Realtors I have spoken with are cautiously optimistic that the fear we have seen about rates and prices, is improving with the stability we are seeing.

If we can assist you in any way with a purchase, sale, investment property or rental, please let us know.

Happy New Year! Wishing you a prosperous 2023,