New Orlando Regional Realtor Association figures indicate that Central Florida home sales increased 31.1% from February to March. In March, there were 2,936 home sales, an increase of 696 from the 2,240 sales registered in February 2023. On the other hand, overall sales in March 2023 were 28.4% lower than in March 2022, when there were 4,100 home sales.
ORRA also reported a 9.1% decline in inventory, from 5,555 properties in February to 5,052 homes in March. In March 2023, inventory (5,052) was 103.9% larger than in March 2022, when it was only 2,478 properties.
New listings increased by 22.1% from February to March, with 3,442 new properties on the market in March, up from 2,820 in February. However, pending home sales remained stable, at 4,184 in February and 4,220 in March, with 28 distressed homes (bank-owned properties and short sales) accounting for 1.0% of all home sales in March. This is a 27.3% increase from February when 22 distressed properties were sold.
The March median home sales price was $365,000, up from $358,000 in February. The median home price has risen for the second month in a row.
In March, homes stayed on the market for an average of 57 days, down from 62 days in February. However, this is 111.1% greater than the March 2022 average of 27 days on the market.
ORRA also notes that the March interest rate was 6.7%, up from 6.4% in February. This is the fourth month in a row that interest rates have risen.Spring has arrived in the Central Florida real estate market. “March data show increases in new listings, home prices, and overall home sales, as well as a reduction in inventory as buyer activity increased significantly,” stated Lisa Hill, President of the Orlando Regional Realtor Association. “The good news for buyers is that they now have a plethora of additional options to choose from.” In March, there were twice as many properties on the market as this time last year, and the median property price was only marginally higher.”
Real estate agents are under pressure as home sales decline
As the pandemic’s homebuying fervor fades into memory, the slowdown in home sales has prompted real-estate brokers to evaluate whether the dwindling profits are worth the thousands of dollars and many hours they’re pouring into their firms. The difficulties are greatest for newer agents who are still building their networks, face tremendous competition from their seasoned competitors, and have yet to weathered a downturn like this one.
The spring homebuying season, when home sales normally increase and continue to rise through the prime summer months, will be a critical litmus test for agents of all levels of expertise. A rising tide does not raise all boats; the industry is waiting to see who is in it for the long haul.
The ranks of real-estate agents fluctuate in response to the property market’s ups and downs. Consider the tumultuous 2008 cycle: NAR gained about 100,000 members in 2006 alone, reaching a peak of approximately 1.4 million. However, after the boom burst in early 2012, membership had dropped to 964,000. And, just as the number of Realtors increased during the epidemic boom, the subsequent slowdown has already resulted in a 74,000 member drop in the five months after the October peak. It’s too early to tell if this is a seasonal drop, which happens every winter, or a harbinger of a long-term decline.
Even before mortgage rates began to rise last year, the frantic market offered difficulties for agents. A decade of underbuilding forced first-time homeowners to compete against investors and older, wealthier repeat buyers, making it more difficult for realtors to assist their clients in obtaining the homes of their dreams. Desperate buyers may make up to 30 offers and spend many hours squeezing through open houses before finally winning out.
Nonetheless, those were prosperous days for agents. According to the NAR, the average agent had 12 transactions in 2021, up from 10 in 2020, and their median sales volume grew to $2.6 million, a year-over-year rise of nearly 24%. In addition, agents with 16 years of experience or more saw their median gross income increase to $85,000 in 2020, up from $75,000 in 2020.
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All of that changed in late spring 2022 when the Federal Reserve began hiking interest rates to reduce inflation. This resulted in higher mortgage rates, bleak economic forecasts, and a scarcity of listings, which has frightened both buyers and sellers in the year since. Fannie Mae’s Home Purchase Sentiment Index examines how people feel about home prices, mortgage rates, job stability, and, most significantly, whether it’s a good time to purchase or sell a property. The index, which goes from 0 to 100, was 61.3 in March, close to its all-time low established in October and down from a COVID-era peak of more than 80 in the summer of 2021.
Opinions expressed by California Gazette contributors are their own.