This presents a favorable scenario for both buyers and sellers, with rising prices balanced by a growing inventory, allowing prospective buyers more flexibility.
Should interest rates decline in 2024, it is anticipated that Northeast Florida’s residential real estate market could witness heightened activity from both sellers and buyers, as the allure of favorable deals increases for both parties. Affordability will play a crucial role, given the fluctuations in prices.
Data from the Northeast Florida Association of Realtors reveals that the median price of a single-family home rose by over $23,000 from January to December 2023. The median price, tracked across Baker, Clay, Duval, Nassau, Putnam, and St. Johns counties, started at $360,990 and concluded the year at $384,750, reaching its peak in July at $395,000.
Throughout the year, the dynamics of the market shifted, with the median number of days a house spent on the market fluctuating from 57 days in January to 48 days in December. Realtors note that buyers are taking longer to finalize deals due to increased inventory.
Unlike the rapid sales observed in 2020, houses are now spending more time on the market, offering buyers the opportunity to make more considered decisions. Diana Galavis, the President of the Northeast Florida Association of Realtors in 2023, emphasizes the positive impact of increased inventory on buyers, particularly with more stabilized interest rates.
The Home Affordability Index, as defined by NEFAR, is expected to exhibit signs of improvement in 2024. This index measures the ability of a typical family to qualify for a mortgage based on current interest rates, median income, and median home prices. A rising index, indicating greater affordability, is advantageous for buyers.
Monitoring this index, Rory Dubin, the 2024 NEFAR president, observes positive trends, especially in areas like the Beaches, where the affordability index increased by 17%. November’s index of 36 rose to 42 in December. Sticker shock for locals is balanced by buyers from larger metro areas who see Northeast Florida as a relatively affordable and valuable investment.
Possible interest rate reductions in late 2024 may spur increased activity from both buyers and sellers. Meagan Hart Perkins, the 2024 president of the Northeast Florida Builders Association, notes that declining interest rates could motivate homeowners to sell and upgrade.
Despite potential sticker shock for locals, Northeast Florida remains relatively affordable compared to larger metro areas, California, and the Northeast. St. Johns County remains the most expensive, reaching a median price of $564,787 at the end of 2023. Nassau County follows as the second-most expensive, while Duval County shows a steady climb in median prices.
Looking ahead, the National Association of Realtors predicts a 14% increase in sales of existing homes in 2024, with southern states likely to outperform due to faster job increases. Lawrence Yun, NAR Chief Economist, anticipates a 30% increase in supply as existing homeowners return to the market with lower inflation, interest rates, and reduced concerns about a recession.
