Is it a buyer or seller market in Florida? That’s a question that is asked repeatedly in Florida by those looking to buy real estate in the Sunshine State. It can be a daunting task to pick the perfect property in Florida or sell the perfect property.
Real estate agents in Florida get asked one question all the time. “Is it a buyer or seller market in Florida?” The answer is it’s a seller’s market. The reality is it’s also a great time to both sell and buy real estate in Southwest Florida. Property in Naples, Sanibel Island and Captiva Island is the place to look for Florida real estate. Choosing a real estate company that you can trust to help you buy and sell Florida property is the key to your success.
What is Considered a Buyers Market?
A buyer’s market is a plus for someone looking to buy Florida real estate. Why? That’s because a buyer’s market means supply of homes exceeds demand, which allows those looking to buy homes an advantage over sellers. This means you can more freely negotiate a purchase price and other stipulations.
An easy way to look at a buyer’s market trends is remembering the following points:
If there’s more product available than there are people that want to buy it, you are in a buyer’s market. In this case, if there’s more Florida homes available than people that want to buy it, then the buyer has the advantage and the ability to get a deal on a Florida home.
Houses usually sell for less
Properties sit on the market for a longer period of time, which means sellers are more willing to negotiate if they need to sell a home quickly in this housing market
What is Considered a Sellers Market?
Now that you know what a buyers market is, it’s time to answer the following question: What is considered a sellers market? A seller's market is a positive for those looking to sell a home. In short, a seller’s market indicates there are more buyers trying to find a home than homes for sale to accommodate the need for buyers. For sellers, this means that buyers typically will get into bidding wars with other potential buyers to buy a home at listing price or even above listing price to get the home they want.
Remember the following points in a seller’s market:
There is generally no room to negotiate discounted prices when demand is high
A seller’s market usually occurs when the economy is humming along and there is low inventory in highly desirable neighborhoods
Prices for real estate rise, which means comparable home sale prices are hard to compare
Buyers offer non-contingent contracts
Sellers are less likely to help pay for closing costs and other fees at closing
How Can You Tell if It’s a Buyer’s or Seller’s Market?
Armed with the knowledge we have taught you above, this makes it easier to tell if it’s a buyer’s or seller’s market. Utilize the following tips below to make sure which market you are entering before you are selling or buying real estate.
Calculate Available Inventory
If available real estate inventory is neutral (meaning it neither favors a bury or a seller), there is typically six months of available inventory available. You can use that as a baseline.
To calculate available inventory, find the number of properties currently on the market and divide by the number of sales in the last 30 days.
Example: 100 homes selling on the market / 20 sales in the last 30 days = 5 months of inventory
This real estate math example above favors sellers ever so slightly because the math shows there’s less than six months of available inventory. If there is more than six months of real estate inventory on the market, the real estate market is shifting to a buyer’s market. Why? There are more homes for sale than there is demand for those homes.
Look at the Price Cuts
Another way to monitor the market to decide if it’s a buyer or seller market in Florida is to watch for price cuts. If listings are not dropping their prices, then demand is strong for those listings. If a large percentage of sellers are cutting their prices, that’s a sign that the market is shifting in favor of a buyer’s market and there’s room for negotiation.
Days on Market is a Telltale Sign
Days on market, also known as DOM, is pretty self-explanatory. It’s the term used to show how many days a home has been actively for sale.
If a market typically sells homes in a certain neighborhood on average every 60 days, that’s the base point to look at. If the days on market for listings start dropping below 60 days and shifting toward every 45 days or less, that’s a telltale sign that houses are selling faster than normal and the market is shifting to a seller’s market.
Home Sale Price Trends Can Be Deceiving
Just because you see home prices rising higher than ever before doesn’t always mean that it’s a seller’s market. A real estate agent that knows the area well will tell you when house prices are too high and a crash is imminent. If the prices go way higher than normal and it happens too fast, a change in the market is coming. Nothing can keep going higher and higher forever. This tip is a crucial reason why having a real estate agent you can trust helps you with your decision.
Watch Those Interest Rates
Follow this simple mathematical approach. When mortgage interest rates are low and falling, buyers are ready to pounce because that property just became much more affordable to them on a monthly basis. When the interest rates are rising, it prices many buyers, including first-time buyers, out of the market and this causes inventory to rise.
How is the Real Estate Market in Florida Now?
So now you want to know if it’s a buy or seller market in Florida? The answer is it’s most definitely a seller’s market right now in Florida. Despite a pandemic and other economic factors, Florida is still a very attractive place to buy property and inventory is tight in desirable places like Southwest Florida.
Here are some tips on buying in a seller’s market:
Make strong offers that won’t be rejected
Be prepared for a bidding war and multiple offers during a time of high demand
Know your final price you are willing to spend
Realize before you begin that the negotiation power belongs in the hands of the seller
Pounce on properties where a deal has just fallen through to try and find an opportunity for some negotiation from a frustrated seller
What are the Best Months to Buy or Sell a House in Florida?
The best time to buy or sell a house in Florida is not an easy answer. That’s because Florida bucks the national trends and is always a desirable place to buy and sell real estate.
That being said, some data shows that the best time to sell a house in Florida is December because median sales prices are typically higher in the last month of the year. If you are looking to sell a house fast in Florida, November data shows us that homes are on the market less in November than the national average.
The best time to buy a house in Florida can also be during the winter months because most people wait to put their homes up for sale in Florida in the spring and summer months. If someone is looking to sell their home in the middle of the prime winter season, sale prices can be lower than they are in the spring and summer.
Remember that these suggestions are not always set in stone. In Florida, real estate is humming along in the spring and summer and any time of the year that the sun shines in Florida, which is 365 days per year! Also, many listings are put up in the winter and spring in prime retirement areas to take advantage of snowbirds coming down to visit that are looking for a new home in a much warmer climate.
Is Buying a Home in Florida a Good Investment?
Buying a home in Florida is always a good investment and here at Royal Shell, we can help you with investing in rental property for beginners. Whether you are buying a beach house as an investment or looking for your forever home in sunny Southwest Florida, the pros always outweigh the cons when buying real estate in Florida.
Everything from Sanibel Island beach houses to Captiva Island real estate to Naples beach homes for sale are within your reach when you utilize Royal Shell to find your perfect property. Use Royal Shell’s home finder today and contact Royal Shell at 1-855-242-9926 to get started!