JANUARY 2022 CENTRAL FLORIDA REAL ESTATE UPDATE

Earlier this year, we looked at 2021's year-end review in the Central Florida real estate market (You can check it out here). We discussed how the market changed compared to the previous years, how fast homes were selling, and how the COVID-19 pandemic shaped our market. As always, I like to look at facts and graphs so we can prepare ourselves to what's coming this 2022. In Spanish we say "Guerra avisada no mata soldado," which can somewhat translate to "a war noticed in advance, won't kill any soldiers."

In this month's article, we are going to look at January for the last 10 years. We are going to explore the new changes and the possible turn in the market.

Let's get to it!

Disclaimer: This is based on Central FL listings and may not present your market or asset(s).

Why are properties increasing in price?

The above chart represents the "Number of Active Listings"in the last 10 years. January 2022 was a historic low of inventory in Florida. Florida had less than 40,000 properties active available for sale. If you were a buyer's agent or a buyer in January 2022, you know it was extremely rough to get an offer accepted because of the amount of offers placed by other buyers and agents. On the other side, if you were a seller's agent or a seller, most likely you received offers over asking price. Short and to the point, because supply was very low.

Why should I give over asking price?

The above chart represents the "Close Price to List Price Ratio" in the last 10 years. To explain it further, if a property was placed for sale back in January 2012 for 100k, statistically speaking it would sell for ~97.25% of the asking price or $97,250. Fast forward 10 years and the numbers are much different. In January 2022, listings have sold statistically for an average of 100%+ of asking price. I have personally seen properties go under contract for 108% of asking price. This means that if a buyer wants to get an offer accepted, the buyer must have a very competitive offer to stand out above the rest or go with a new construction. Short and to the point, because demand was very high.

(Popular Questions from the last Article)

How much did the market change in price (January 2022)?

The above chart represents the "Average Sale Price." This is where it gets interesting. If supply was low and demand was high, why was there a dip? There could be a number of reasons but one of them could be sellers and third parties are trying to "catch up" and list properties at market demand and not market value. Still, compared to 10 years ago, there has been a tremendous increase. Florida has experienced just as much sales growth, if not better, in the last 2 years than all the previous 8 years (January 2012-December 2019) combined. Short and to the point, the market took a dip from the previous peak.

How long are properties staying active in the market?

The above chart represents the "Average Days to Sell." This graph shows bigger changes than any other statistic. Florida has had increasing demand and faster closings that are now below 40 days to sell. Just as the dip, it is also crucial to point out that there was an increase in days to sell. Should I say more? Short and to the point, less than 40 days.

What should I do when placing an offer?

This is a great question and often a difficult one to answer. Not every house situation is the same and not every house may fall under these statistics. There may be a very undesirable listing that has been 600+ days in the market that these observations may not apply to. The best way to answer this question is to look at the surrounding market, see what has sold, what were the percentages over asking price, and also talk to your trusted agent to give you a more in depth research not available to consumers. Cash is always king but can be defeated by a well prepared offer.

As always, do not hesitate and feel free to reach out to me at [email protected] or connect with me here on Linkedin! If you enjoyed this article, click on that subscribe button for upcoming monthly updates. Like and share!

Until next time!