Note from Broker Barbara

Hyper Local Real Estate Markets continue for Brevard County. Mortgage Rates are softening (6.73% Avg Fixed Rate 30 YR as of today), Active Listings (Inventory) continues to be on the rise nationwide, and mainstream media is ramping up talks about concerns of entering into a Recession (although it appears we've been in one for a while). Pockets of the country and our county are still seeing strong sales (especially in areas with new construction (i.e. Viera & Palm Bay), but with an increase in the # of available properties on the market, competition brings longer days on market (Brevard County is averaging 2.5-3 months however some zip codes are seeing much higher), more price reductions from Sellers who aren't priced well enough for offers &/or showing activity, and more negotiating from Sellers as needed. Some sellers who purchased during the pandemic sales craze are experiencing frustration with an asset that might not have the equity they thought they had. I try to remind our customers that equity is a moving target, just like stocks, so they have to weigh their options on carrying costs vs selling a property at a lower price, along with where they can reinvest their funds to yield a higher return. That answer varies greatly depending on the customer, so know we are here to guide you on what we are seeing in your specific local market and then help you to make the best decision to fit your goals. Also, after an agreement between the National Association of Realtors and the DOJ, on August 17, 2024, the real estate industry will see a major change; MLS's throughout the country will no longer display buyer brokerage commissions. All consumer property tours, whether virtual or in person, will now require a signed agreement before showings that explain how the buyer's agent and their brokerage will be paid. Agreements will vary depending on whether it's for 1 or more properties on one day, for a longer period of time (i.e. an Exclusive agreement), etc. Despite some confusion and media noise on how this practice has been in place for many decades, commissions have been and will continue to be negotiable. My outlook with this change is that it will elevate the consumer experience and full time, professional Realtors will be even more highly sought after. As always, we hope you choose to reach out to us for advice on your real estate investments and decisions.

Previous charts are National statistics while the following chart is for Brevard County specifically. 

Florida's Economy Ranked as One of the Strongest in the Nation for Second Year

Last week, CNBC ranked Florida's economy as one of the strongest in the nation for the second consecutive year. This achievement highlights the state's rapid economic growth, which has been nearly double the national average since 2019. This growth has been fueled by an influx of new residents and expanding businesses.

Florida's robust economic health is evident in several key metrics: a low unemployment rate of 2.6%, a favorable corporate tax rate, and strong support for startups and small businesses. "In 2024, we reduced spending, cut taxes, raised teacher pay, paid down record amounts of state debt, generated a huge budget surplus, ranked #1 in education, allocated record funding for Everglades restoration, and accelerated road and highway projects," Governor DeSantis stated. The collaborative efforts of the Legislature and the Governor's office in enacting policies that foster economic growth and stability have been crucial to Florida's success.

Fewer Homeowners Constrained by Mortgage Lock-in Effect

The number of homeowners affected by the mortgage lock-in effect is decreasing, with one in four homeowners now paying interest rates of 5% or more. This change is a result of rising interest rates, which have led to fewer sub-5% mortgages in the market. According to data from the ICE Mortgage Monitor, there are currently 5.8 million fewer sub-5% mortgages than there were two years ago. This shift presents new opportunities for real estate agents and lenders, as homeowners with higher rates may be more inclined to sell or refinance.

The rise in mortgage rates since 2022 has led to about 4 million mortgages with rates above 6.5%, including 1.9 million with rates of 7% or higher. Many homeowners are now waiting for rates to drop to refinance. For lenders, retaining mortgage servicing rights is crucial, as it allows them to offer competitive refinancing options when rates fall. In the first quarter of 2024, lenders retained 29% of borrowers who refinanced for lower rates and 22% for cash-out refinances, with higher retention rates for newer mortgages. This trend suggests a potential increase in refinancing activity as interest rates fluctuate.

Existing Home Sales Drop in June 2024

In June 2024, existing home sales in the U.S. dropped by 5.4% compared to the previous month, reaching a seasonally adjusted annualized rate of 3.89 million units. This marks the steepest monthly decline since 2022 and the lowest number of sales since the beginning of the year. Existing home sales are lower than the previous low in 1995. t was the fourth consecutive month of declining existing home sales, as the median sales price rose to a record $426,900. Meanwhile, unsold housing inventory increased by 3.1% from the previous month, reaching 1.32 million units, or a 4.1-month supply at the current sales pace. "We're witnessing a gradual shift from a seller's market to a buyer's market," said Lawrence Yun, Chief Economist of the National Association of Realtors (NAR). "Homes are staying on the market longer, and sellers are receiving fewer offers. More buyers are requesting home inspections and appraisals, and inventory is clearly rising nationwide."