Is the Real Estate Game About to Shift for Buyers?

If you’ve been in the market to purchase real estate anytime in the last two years you probably have some stories to tell. Buyers have been facing home prices that seem to rise everyday, a deluge of competition, and all cash buyers and investors swooping in at the last minute and snatching up properties left and right. Most buyers have lost out on multiple properties in their recent home search. And now the mortgage interest rate is on the rise, up close to 2% since the year began. Buyers have been faced with obstacles at every turn. A new report published by Redfin, however, is showing that there may be good news on the horizon for buyers, at long last!

According to Redfin, buyer competition - as evidenced by the amount of transactions that wound up in a bidding war - decreased in the month of March for the first time in more than 6 months! While it was on the rise month after month, in March the percentages of bidding wars nationally dropped from almost 67% to 65%. A slight drop, yes, but definitely a good indication that the market may be cooling. This is certainly welcome news for buyers all across the country.

Which areas saw the fewest bidding war transactions? The top five lowest percentages were in Riverside, California, Nashville, Honolulu, Indianapolis, and Orlando. This is a great sign for buyers all across the country, as these are spread across a wide array of markets - including some of the most popular markets previously. Where we have not seen a decline in competition is here in South Florida, where markets are remaining strong - particularly areas like the Florida Keys real estate market, which rely heavily on the luxury buyer.

Clearly the effects of government attempts to regulate the market as well as buyer fatigue and rising prices are finally resulting in a reigning in of the market. High prices and rising interest rates are rendering millions of buyers unable to purchase a home. Did you know that the average cost of a home is now an average of 20% higher than it was last year? Compounding buyer struggles is the current mortgage interest rate, which has jumped almost 2% since 2022 began. Buyers are now faced with potential monthly mortgage payments that are 30% more than last year. Like I said, buyers are being priced out. Who can afford hundreds, sometimes thousands, of dollars more a month? Most cannot. These buyers are dropping out of the real estate game out of necessity, thus reducing competition for buyers that are remaining in it.?

Many buyers are looking for a cash property in the Keys or a Florida Keys luxury waterfront property. In fact, nearly 70% of all homes for sale in the Fl Keys are currently priced at or above $1 million. Luxury buyers are less susceptible to the struggles that are leading to other buyers dropping out of the market, thus keeping luxury markets like ours strong with competition.