A real estate market full of paradoxes is how a recent comparison of Florida Keys property sales in 2023 to the previous year describes the past “off-year” of adjustments.
“While the dollar volume of sales in 2023 was the third highest in Keys history — higher than any year prior to 2021 — the number of sales was the lowest in the past 10 years,” according to a Coldwell Banker Schmitt Realty Co. report released Feb. 22.
The report attributes the high average sale prices to historically low inventory, which is expected to continue as the market corrects itself to a post-COVID world.
It does expect inventories of properties for sale in 2024 to increase over last year’s levels. The year-end 2023 inventory of 1,748 listings was almost one-third lower than pre-pandemic averages. However, no buyers’ market and resultant price declines are anticipated. Marketing time should increase with more listings, returning to more than 100 days from the year-end 79 days.
“We believe that sellers will continue to test the market in terms of asking price and will continue to have to adjust their expectations of price in 2024, with average price reductions during the listing term of over 5% from the original asking price, and negotiating margins over 10% from the original list price and over 5% from the final list price,” the report states.
Luxury home sales — residential properties over $1.5 million — are expected to continue to lead the local market.
Nationally, the number of sales is slated to increase over last year as interest rates stabilize in the low 6% range, which should also have some impact on local sales, though the Keys market has not traditionally been as impacted by rate swings as elsewhere, the report states.
Based on all property types in 2023, Keys-wide sales fell by 24.5% from 2022 — 2,976 to 2,219. Average sale price was up 1.5% to $1,054,706 from $1,038,652 the year before. Days on market was up 41.1%, increasing from 56 to 79 days. Properties for sale jumped 27.7%, from 1,369 to 1,748.
Residential properties accounted for 77% of all sales and 92% of total dollar volume of sales. But residential properties sales fell 27%, from 2,353 in 2022 to 1,712 last year. The average residential sale price was $1,256,199, up 8% over 2022. But the total volume of sales was $2.15 billion, which was 21% lower than 2022. Sales prices averaged 94.65% of the final list price, which was 1.8% lower than the year before.
One recent development in the real estate market could have long-lasting effects.
Earlier this month, the National Association of Realtors also agreed to pay a $418 million settlement to help compensate home sellers across the U.S.
The powerful real estate trade group has agreed to do away with policies that for decades helped set agent commissions, moving to resolve lawsuits that claim the rules have forced people to pay artificially inflated costs to sell their homes.
Home sellers behind multiple lawsuits against the NAR and several major brokerages argued that the trade group’s rules governing homes listed for sale on its affiliated Multiple Listing Services unfairly propped up agent commissions. The rules also incentivized agents representing buyers to avoid showing their clients listings where the seller’s broker was offering a lower commission to the buyer’s agent, they argued.
As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer’s agent. The rule change leaves it open for individual home sellers to negotiate such offers with a buyer’s agent outside of the MLS platforms, though the home seller’s broker has to disclose any such compensation arrangements.
The trade group also agreed to require agents or others working with a homebuyer to enter into a written agreement with them. That is meant to ensure homebuyers know going in what their agent will charge them for their services.
The rule changes, which are set to go into effect in mid-July, represent a major change to the way real estate agents have operated going back to the 1990s, and could lead to homebuyers and sellers negotiating lower agent commissions.
Currently, agents working with a buyer and seller typically split a commission of around 5% to 6% that’s paid by the seller. This practice essentially became customary as home listings included built-in offers of “cooperative compensation” between agents on both sides of the transaction.
But the rule changes the NAR agreed to as part of the settlement could give home sellers and buyers more impetus to negotiate lower agent commissions.
Most Popular
Comments / 0