Volusia county real estate remains HOT. In many instances across Volusia communities, a hot sellers’ market does indeed mean a faster sale and at or above asking price. The market remains hot as new listings continue to not keep up with the surge in demand. One of the suspected reasons affecting the low housing inventory is the group of homeowners who would move but are reluctant because the home will sell. They may not be able to replace it with what they want.
Single-family home listings are averaging less than two weeks before receiving a contract. Condo and townhome listings are moving more quickly averaging less than one week on market. The report does show a slight increase in new listings compared to last year, but overall active listings are down to less than a one month supply.
According to the most recent market statistics report published by the New Smyrna Beach Board of Realtors, median sales prices for single-family homes, condo and townhomes are up approximately 25% in comparison to this time last year. Eventually the red-hot rate of home price growth should cool down somewhat in the coming months as the ratio of buyers to sellers starts to balance out. That will also depend on whether interest rates start to trend higher again. For now, the numbers continue to astound.
There are current signs that indicate the peak of the sellers’ market is close. This does not mean the market will suddenly fall into the buyer’s advantage. It means market conditions for today’s buyers will begin improving.
One trend to consider is the share of cash sales as a percentage of closed sales. In the single-family category, the report shows 58% of closed sales paid in cash, up 40% compared to June 2020. This year, higher-end sales have made up a greater share of closings. Historically, those types of sales are all cash. Since luxury sales are a greater share of overall sales, that’s pushing up the overall cash share.
Another factor to consider is a rise in the percentage of single family home sales paid in cash in price tiers below $400,000. The report shows listings that closed between $250,000-$300,000 leading the way, up 100% compared to this time last year with less than one week on market before receiving a contract. This indicates a rise in investor activity.
The fact that builders have not kept up with the demand has been a major contributor to the low inventory that housing is currently experiencing. It is estimated that it will take two million new homes a year for the next decade to get caught up, assuming demand doesn’t increase.
Is there a market bubble? Local Realtors are experiencing a market like no other. Only time will tell. Economists predict panic-buying highs will start leveling out to prices that make sense when interest rates start to rise. Several market metrics were impacted by the pandemic. What separates this market from history? People’s experiences during the pandemic. The pandemic changed the direction for many buyers and sellers.