A look into 2024: Sarasota County Home Sales

Follow the trends, take comfort in the data, and make an informed decision.  That is the reason I write these commentaries.

As mortgage interest rates go, so goes inventory. Inventory increases as rates climb. As rates fall, inventory shrinks.

Volatility in interest rates creates economic uncertainty. It has a cooling effect on the housing market. Buyers are more sensitive to volatile changes in interest rates than the actual rate. When rates stabilize, consumers adapt to the new normal, bringing more buyers off the sidelines.

In Sarasota County, October 2022, 420 existing single-family homes sold. Then rates jumped (emphasis on “jumped”) to 7.08%. Over the next 3-months, sales dropped to a 3-month average of 340 sold homes.  February 2023, rates settled into the mid to upper 6% range. Buyers acclimated to the new normal.  Sales accelerated. On average, 620 homes sold from March to July 2023.  Until August, when rates jumped again, over 7%, climbing to 8% by the end of October. The volatility had a chilling effect.  Sales fell back to 406 sold homes.  As I write this, rates have subsided to 7.4%.

What’s remarkable is not that higher interest rates hampered sales, but that prices have held up, down a mere 5% off the 40% +, 2022 highs.  In October, the median sold price of existing single family homes was $511,000,   1% less than September 2023, 4.3% less than October 2022.

If recent history is indicative of future activity, and if in 2024 interest rates hover within a 6% range, there will be more sales and modest price appreciation.  If interest rates hover in the low to mid 7% range, the number of sales will slow and prices will be stable.  If interest rates head towards 9%, sales and prices will see a precipitous drop.  

Wishing you and yours a wonderful and happy Thanksgiving.