The Treasure Coast real estate market for single-family homes, which has been normalizing since the middle of the coronavirus pandemic amid low inventory and high mortgage rates and home insurance premiums, continued to see sales declines in August, according to data released in September.
More homes were listed in St. Lucie and Indian River counties, but inventory remained low and houses took longer to sell in all three counties.
Low inventory and high demand kept prices higher than last year, and that lack of affordable options is affecting buyers’ decisions.
Closed sales decline
The number of homes sold in August declined from July, which is on trend with the past few months' data:
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Martin: 164, down from 170 in July
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Indian River: 203, down from 219 in July
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St. Lucie: 505, up from 504 in July.
The housing market's seasonality could be the reason, said Kyle Von Kohorn, president-elect of the Realtors Association of Indian River County.
“Historically speaking, for Indian River County, we see our highest median sale prices in the late spring/early summer, and our lowest median sale prices occur in the mid-late fall,” Kohorn said.
All three counties saw high sales in the spring and summer of 2021-22, with sales in Martin County peaking this May.
Over the past year, the median sale price has increased by 4.6% and new listings decreased by 14%, which shows the market remains strong albeit bogged down by low inventory, Kohorn said.
Nationwide, the sales of single-family homes in August was 8.7% less than in July but 5.8% more than in August 2022, according to the U.S. Census report on new residential sales.
Affordable housing crisis brewing
Affordability has become an issue and is pushing people out of the market.
“Homeowners insurance rates are affecting affordability much more significantly now than they were last year at this time,” Kohorn said.
In Florida, the annual premium averages $4,200 — triple the national average, according to the Insurance Information Institute.
Higher mortgage rates are also a factor in reducing affordability for new buyers. The 30-year fixed rate averaged 7.19% as of Sept. 21, up from 5.66% a year ago, while the 15-year averaged 6.54%, up from 4.98% a year ago, according to Freddie Mac. These rates are the highest in two decades.
The monthly payment to finance a median-priced home was over 20% higher than last year, Realtor.com chief economist Danielle Hale said in this month’s report on the nation’s housing market trends.
The rate hikes are the Federal Reserve’s way of combating inflation, which is at 3.7% now compared to over 8% last year. The Fed last hiked rates in late July.