Brad O’Connor directly addresses camera:
The first half of 2023 is now in the books, so letís take a look at Florida Realtors newly released statistics for the month of June.
In the single-family home category, closed sales were down about 8% this June compared to June of last year, when higher interest rates were really starting to dampen housing demand across the country. According to Freddie Mac, at this time last year, the typical rate on a 30-year fixed-rate mortgage had risen above 5%, after starting 2022 at around 3%. This June, by contrast, the typical 30-year fixed rate was between 6-and-a-half and 7%. In light of that headwind, an 8% year-over-year decline in closed sales is understandable.
If we look at closed sales overall for the first half of 2023, we saw about 135,000 single-family home transactions close, which was a decline of over 16% compared to the first half of 2022. Thatís because the monthly year-over-year declines we saw earlier in the year were, of course, much more severe. In January 2023, for instance, when 30-year fixed mortgage rates were in the 6 to 6.5% range, single-family home sales were down 32.5% compared to January 2022, when rates were still around 3%.
As the monthly gap between closed sales this year compared to a year ago continues to shrink, thereís actually the possibility we may start to see sales rise year-over-year in the coming months. In the second half of 2022, rates continued to rise from 5% up to around 7%, and sales, as a result, continued to worsen over time beyond their normal seasonal second-half declines. If rates remain stable the remainder of this year, or especially if they start to pull back a bit, we may very likely see sales continue to trend along the seasonal path typical of pre-pandemic years, such as in 2019.
New listings of existing single-family homes for sale were down by 17.5% in the first half of 2023 compared to a year ago, including a more than 27% year-over-year decline in June. Weíre unlikely to see that large of a year-over-year decline over the next few months, though. New listings temporarily spiked in mid-2022 in response to the sudden and rapid shift to rising mortgage rates early last year. But by the end of 2022, monthly new listings were well below normal levels, as homeowners locked into low mortgage rates increasingly became hesitant to enter the market.
Interestingly, the number of new listings this June was pretty close to the number we had in June of 2019, so in that regard, thereís actually been an improvement. Potential sellers who have been on the fence for the past several months may finally be starting to realize that this higher level of interest rates is going to be more persistent than they may have originally thought.
Now, letís take a look at the end-of-month inventory of active listings of single-family homes. In 2022, as rates started to rise and the shift in the market became apparent, we initially saw a rapid rise in inventory levels as new listings started coming on to the market at a high rate. But once that short-lived burst in new listings reversed in the latter half of the year, inventory growth stabilized, and that trend has continued in 2023. As of the end of June, single-family inventory was about 14% higher than a year ago, but that gap will be closing rapidly in the next month or two.
Overall, we are at an inventory level that is about halfway between our pre-pandemic inventory level at this time in 2019 and our low point during the pandemic in 2021. The improvement weíve seen in inventory levels is a sign that upward pricing pressures are moderating, and thatís shown up in the median sale price for single-family homes, which in June was $420,000, marking the third straight month where it was essentially unchanged from a year ago.
Now, let’s wrap up by quickly reviewing the numbers over in the existing townhouse and condo category, where, for the most part, the story has been similar to what weíre seeing on the single-family side.
In the first half of 2023, closed sales of existing townhouses and condos were down nearly 24%, but were only down 11% year-over-year in June. Just as is the case for single-family homes, we may see some positive year-over-year numbers in this category later this year.
As for new listings of townhouses and condos, they were down close to 12% over the first half of the year, but fell close to 21% year-over-year in June. We expect this gap to shrink in the coming months as we increasingly will be comparing to the latter half of 2022 when new listings really started to drop.
The inventory level of townhouses and condos at the end of June was over 40% higher than it was a year ago, but it has been stable for several months and remains well below our pre-pandemic inventory levels in this category.
And finally, the median price among sales of townhouses and condos in June was $324,900, just a hundred dollars below where it was in June of 2022.
Weíve covered the state of Florida as a whole in this video, but what about your particular market area? Well, you can certainly check out how your market compares to the state overall if youíre a member of Florida Realtors.
As always, you can find your local area statistics at floridarealtors.org/research, or through our interactive web application, SunStats, which you can find at sunstats.floridarealtors.org. See you all next month.