Slowing market impacted by high interest rates 

Slowing market impacted by high interest rates 

For Immediate Release 

JACKSONVILLE, Fla., November 9, 2023 – Traditionally, with the approach of Thanksgiving, the housing market slows as both buyers and sellers reflect on the holidays. However, observing a longer data history, this is by far the biggest seasonal slowdown seen in many years. 

With a few exceptions, the number of days houses sat on the market increased along with active inventory throughout the region. And prices remained high. 

“The monthly supply of inventory in the region increased to 3.5 months,” observed NEFAR President Diana Galavis, noting there was a 19% increase since September. “Overall, the Northeast Florida market is strong with the sales median holding with very little change.” 

Even with the increase in inventory, the region still has a way to go before it can be considered a buyers’ market, where six to seven months of inventory is for sale. One thing is for certain, homes have never been so expensive in Northeast Florida. The region’s Home Affordability Index for single-family homes slid 4.5% to 63, registering at an all-time low.  

The Housing Affordability Index measures housing affordability for the region. In other words, it 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.  This index measures affordability factors for all homebuyers making a 20% downpayment. An index of 100 is defined as the point where a median-income family has the exact amount of income needed to purchase a median-priced existing home. An index value over 100 means that the family has more than enough income, while a value below 100 means that a family doesn’t have enough income to qualify for a mortgage loan. 

The high cost of housing has a lot to do with high-interest rates, Galavis said. “Interest rates reached the highest levels in October,” she said. “Buyers were cautious and took a little longer to make offers, which reflected in higher median days on the market. Closed sales slid down. The home affordability index had a slight dip. The cost of goods, services, and borrowing money is much more expensive today than a year ago,” Galavis explained.  “Buyers are pausing to see which direction the Federal Reserve, stock investments, and the real estate market will move.”  

As the market slows, remember having a well-educated real estate professional at your side becomes even more important. “It is essential to seek the help of a REALTOR^® when buying, selling, or investing in real property. REALTORS^® abide by a strict code of ethics and know to help buyers and sellers navigate the complicated process of real estate.” 

Northeast Florida by County 

In Duval County, the October 2023 median price of single-family housing was $320,000, a 3.6% dip downward from September 2023. The median days on the market in October increased to 38, a 22.6% hike from the month before. Month-to-month, closed sales fell 12.8% to 765, pending sales rose 4.7% to 795, and new listings increased 6.9% to 1,415. Active inventory for the county rose 11.2% to 2,422 homes, a 3.2-month supply. In October, the Home Affordability Index remained stable from the month before at 75. 

In Clay County, the October 2023 median price of single-family homes inched up 0.5%, to $361,250. The median number of days on the market increased 3.7% to 42. Month-to-month, closed sales fell 7.9% to 234, pending sales dropped 14.2% to 199, and new listings rose slightly 2.6% to 356.  Active inventory for the county rose to 718 homes, an 11.3% increase from September 2023 and showed a 3.1-month supply. The Home Affordability Index tumbled 4.3% to 66.5.  

In St. Johns County, October 2023 median prices increased 0.9% to $540,000 for single-family homes.  The median days on the market jumped up 14% to 49. Month-to-month, closed sales fell 2.0% to 401, pending sales dropped 4% to 407, and new listings rose negligibly 01% to 700. Active inventory rose to 1,675 homes, an increase of 5.1% from September 2023, and 4.2-month supply. The Home Affordability Index slid downward, 4.3% to 45, indicating St. Johns County is the most expensive county to live in Northeast Florida.  

In Putnam County, the October 2023 median price of single-family homes was $229,900, an 7.6% drop from September 2023.  The speed of sales slowed with homes remaining on the market a median of 31 days, a 16.2% drop from the month before. Month-to-month, closed sales rose 13.3% to 51, pending sales increased 4.9.% to 43 and new listings jumped up 17.6 % to 80. There was an 11.8% increase in active inventory to 189 homes. Putnam County’s Home Affordability Index registered at 105, an 5% increase from the month before indicating that prices in the county became more affordable. With a Home Affordability Index registering at 105, Putnam County is by far the most affordable place to live in Northeast Florida. 

In Nassau County, the October 2023 median price of single-family homes was $400,000, a 1.3% increase from September 2023. Median days on the market plummeted to 35, a 41.7% drop. Month-to-month, closed sales fell 4.5 % to 106, pending sales increased 4.5% to 93, and new listings climbed 10.2% to 183. Active inventory increased 8.4% to 376 homes, a 3.5-months’ supply. The Home Affordability Index registered 60, a 4.8% fall from the month before. 

In Baker County, the October 2023 median price of single-family homes increased to $315,000. The median number of days on the market in September skyrocketed to 58, 75.8% from the month before. Month to month, closed sales dropped 38.9% to 11, pending sales increased 30.8% to 17, and new listings catapulted downwards 47.1% to 18. Active inventory dropped 8.3% to 55 homes, a 5-month supply. The Home Affordability Index registered at 76, falling 16.5% from the previous month.  

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The Northeast Florida Association of Realtors (NEFAR,) serves as the voice of real estate in Northeast Florida. It is the region’s largest professional association, representing more than 12,000 members who work in all facets of the real estate industry including residential and commercial sales and property management. It serves the public through support of community affairs programs and seeks to protect private property rights. The region’s multiple listing service, realMLS, is a wholly owned subsidiary of NEFAR. NEFAR is headquartered in Jacksonville, with satellite Service Centers in Orange Park, Jacksonville Beach, and Palatka.