Market Update December 2024
If you’ve been considering buying or selling property in Northwest Florida, there’s good news on the horizon. The housing market appears poised for a rebound after a slower summer, according to insights from the National Association of Realtors® (NAR). This positive shift, coupled with predictions from NAR Chief Economist Lawrence Yun, offers an encouraging outlook for those navigating the Emerald Coast’s real estate market.
As a top-producing real estate team specializing in Northwest Florida, we’re here to break down what this means for you and how you can leverage these trends to make the most of your property investments.
September Brings Signs of Recovery
The NAR’s Pending Home Sales Index—a key forward-looking indicator of home sales based on contract signings—revealed a 7.4% increase in September compared to August. Even more promising, contract signings were up 2.6% year-over-year. This improvement was felt across all regions of the country, including the South, where pending sales rose by 6.7%.
According to Lawrence Yun, this uptick can be attributed to a combination of factors: lower mortgage rates during late summer, improved inventory levels, and sustained job growth. Buyers found more options, and some acted quickly to take advantage of favorable conditions. In Northwest Florida, with its desirable coastal properties, this trend was likely amplified by high demand for vacation homes and investment properties.
What’s Driving This Market Recovery?
Several key factors have contributed to the recent improvement in home sales:
Increased Inventory:
Housing inventory in September was up 23% compared to the previous year. While this is still about 25% below pre-COVID levels, it’s a significant improvement that’s giving buyers more choices.
Lower Mortgage Rates:
In September, the Federal Reserve’s decision to cut its benchmark interest rate for the first time in four years spurred movement in the housing market. Although the Fed’s rate isn’t directly tied to mortgages, the cut helped bring rates down to an average of 6.18% in September—a decline from 6.5% in August.
For a typical $300,000 mortgage, this reduction translated to about $300 in monthly savings, creating urgency among buyers to act quickly.
Pent-Up Demand:
As Yun points out, there is “sizable pent-up housing demand” that’s beginning to be unleashed. Many buyers who paused their searches during periods of high prices and rising rates are now re-entering the market.
Predictions for the Next Two Years
For buyers and sellers in Northwest Florida, the future looks bright. Here are some of Yun’s key predictions:
Higher Home Sales:
Existing-home sales are forecasted to rise significantly, with projections of 4.47 million sales in 2025 and more than 5 million in 2026. This is great news for sellers looking to capitalize on increased buyer activity.
Slower Home Price Appreciation:
After years of rapid price increases, the market is expected to stabilize. Home prices are predicted to grow at a slower rate, roughly in line with the consumer price index. This creates a balanced environment where buyers can make competitive offers, and sellers can still enjoy steady gains. For example, the median sale price for existing homes is expected to reach $410,700 in 2025 and $420,000 in 2026.
Falling Mortgage Rates:
Mortgage rates are anticipated to decline further, with the 30-year fixed-rate mortgage projected to average 5.9% in 2025. While rates may rise slightly to 6.1% in 2026, they remain well below the highs seen in recent years, making homeownership more accessible.
What This Means for Northwest Florida
For property buyers and sellers along the Emerald Coast, these trends present exciting opportunities:
Buyers: If you’ve been waiting for the right time to invest in a vacation home or rental property, the predicted decline in mortgage rates and stabilization of prices make the next two years an ideal window to act.
Sellers: Increased buyer activity and a recovering market could drive demand for your property. Preparing your home for sale now—including addressing any inspection issues like replacing aging water heaters—can position you to take advantage of these favorable conditions.
Why Choose a Top-Producing Real Estate Team?
Navigating the complexities of today’s market requires expertise, local knowledge, and a commitment to delivering results. As a top-producing real estate team in Northwest Florida, we understand the unique dynamics of this region, from Destin’s luxury beach homes to Pensacola’s charming single-family residences. Whether you’re buying, selling, or investing, we’re here to guide you every step of the way.
Start Your Real Estate Journey Today
The Northwest Florida real estate market is evolving, and there’s never been a better time to explore your options. Visit my850.com to search for local properties, learn more about our services, or schedule a free property walk-through inspection.
Let’s make your real estate goals a reality—because the future of the Emerald Coast housing market is bright, and we’re here to help you shine.
