Why Haven't Home Prices Gone Down on the Space Coast?

Hey there, Space Coast friends! Aaron Young here, Broker/Owner of Island Pineapple Realty. I know many of you have been wondering why home prices haven't gone down, despite the rising mortgage interest rates.

For reference, the median sales price for Brevard single-family homes is up 3.2% to $350,000 compared to a year ago, which was $339,000.

Not sure what that really means? Don’t worry!

I'm here to offer some insights and dive into the current state of our local residential real estate market to clear up some misconceptions. I promise to keep it light and fun!

Home Prices: The Surprising Reality

So, we all thought that higher mortgage interest rates would send the residential market into a tailspin, right? But guess what? Six months after rates peaked in October, prices here on the Space Coast haven't budged. How on earth is that possible?

The Magic of Supply and Demand

It's all about the good ol' supply and demand economics. Right now, we're dealing with a short supply of housing, with just about 2.2 months of inventory of single-family homes active and available for purchase. This number still puts sellers in the driver's seat. Remember, a market is considered balanced with about 6 months of inventory. We'd need inventory to triple before the market shifts in favor of buyers!

Why Aren't More Homes on the Market?

Great question! Most current homeowners either own their house outright or have a mortgage with a fixed interest rate between 2-4% over 30 years. With interest rates now hovering around 6-7%, many homeowners aren't willing to trade their low-interest mortgages for higher ones. So, they're holding on to their homes, leaving us with a low supply of homes for sale and stable or increasing prices.

Is This a Housing Bubble?

I think we can all agree that the Space Coast's current market isn't a "housing bubble" waiting to burst. Sure, the housing market could take a hit, but we'd need some major economic problems for that to happen. For home values to decrease drastically, we'd need a significant increase in housing inventory – which would likely require massive unemployment. Do you see that happening here on the Space Coast anytime soon? I don't.

Opportunities in the Current Market

Every market condition brings unique opportunities for homeowners and homebuyers. Right now, it's a great time for those looking to downsize and avoid higher interest rates by using their current equity to pay cash for a smaller home. For first-time homebuyers, there's no time like the present to make your dream a reality. If interest rates decrease later, you can always refinance, but if they increase, you'll be glad you locked in at a lower rate.

And hey, if all else fails, you can always ask your landlord to keep your rent the same for the next 30 years! (Just kidding y’all!)

Thanks for sticking around and reading my thoughts on the market. Remember, this is just my opinion, and it's essential to make an informed decision that's best for your family. At Island Pineapple Realty, we want all our clients to #LoveWhereYouLive. Let us know how we can help you achieve that goal!