Rising mortgage interest rates are dampening the booming real estate market. This, combined with record house prices, is leading to lower sales and more homes on the market. In fact, active listings are up more than 100% from last year, according to June data from the Sarasota-Manatee Association of Realtors.
“Clients can browse more properties than in the last few months instead of viewing the same home for four months until a new home comes on the market,” says Keith Curcio, Real Estate Agent for Re Group. /Max Alliance of Sarasota.
There were 2,088 sales in the two-county area in June, down 26.7% from the same month last year. In Manatee County, single-family home sales were down 22.3% from a year ago to 645 sales, while condo sales were down 23.6% to 265 closed sales. In Sarasota County, single-family sales fell 26.9% to 802 sales, and condo sales fell 34.6% to 376 sales.
“Compared to four to six months ago, when there were a lot of waiver possibilities, buyers don’t seem as aggressive,” Curcio says. “A client has just been accepted for an offer with the possibility of selling another house – six months ago this would never have happened. This tells you that there is a change.”
At the end of June, there were 3,554 active listings combined in Sarasota and Manatee counties, an increase of 131.4% over last year. There were 998 more active listings reported at the end of June than at the end of May, a 39.1% month-over-month increase.
Curcio adds that while interest rates have gone up, that’s not unusual.
“In reality, these rates are back to normal. Many people will tell you that an interest rate of 2.5 or 3%, like six months ago, is not normal. Where the rates are are now approaching normal,” he explains. According to the most recent data, current interest rates in Florida are 5.59% for a 30-year fixed mortgage and 4.82% for a 15-year fixed mortgage.
“I would still call it a seller’s market; I just wouldn’t call it an outsized seller’s market,” he says.
Yet, despite increased inventory, the median selling price in the two-county area continues to rise. In Sarasota County, the median single-family home price rose 25% from June of last year to $500,000. Condo prices rose 34.4% to $416,250. In Manatee County, single-family home prices rose 35.7% year-over-year to $550,000. The median condo price in Manatee County was $356,500, an increase of 27.3% over last year.
Additionally, properties are still under contract in seven days or less, with the median time being six days for single-family homes in Manatee County and seven days for single-family homes in Sarasota County. The median time for condos to come under contract is seven days for both counties.
Cash purchases, which remain strong, are another data point immune to interest rates. Although there were fewer sales closed in June compared to June of last year, cash sales exceeded those of last year and accounted for more than 50% of single-family home transactions in the county of Sarasota. In Manatee County, cash sales in June of this year were similar to last year, hovering just below 40% of transactions.