[New] Interest Rates, Home Prices & The Federal Reserve

Real Estate is arguably the largest sectors of the economy and from an individual’s perspective is their largest investment where their mortgage payment is the largest part of a monthly budget and vehicles are usually the second. The Real Estate market is considered a Leading Indicator of the economy. Low Interest Rates and strong demand fueled the extra-ordinary rise in the cost of housing and rise in inflation.

INTEREST RATES: Enter the Federal Reserve, mandated to control the inflation introduced the first of 7 interest rate increases for 2022. Because the Real Estate market is so sensitive to interest rates it was the first to be impacted by the FEDs. With that being said, let’s look back over our 2022 Real Estate Market, specifically our 32828 area.

HOME PRICES: Unlike many other areas in the country the sales prices of home sold in the 32828 area have remained fairly stable. According to data from the Orlando MLS the average sales price of homes sold each month in 2022 is still higher than 2021. For example, the was a 16.7% increase when comparing Nov 2021 to Nov 2022, and an 11.6% increase in Dec.

LESS HOMES SELLING: The Federal Reserve’s objective to slow the real market has been successful. With the rise in interest rates, we are experiencing approximately 28% less homes being sold per month in 2022 when compared with 2021.

LENGTH OF TIME TO SELL: We’re also experiencing an increase in the number of unsold listings due to a decrease in demand for homes, and those that do sell, are taking on average 36 days. This trend may continue into 2023.

BUYER’S MARKET: With the decrease in demand for homes and the increase in homes for sale, it’s now a buyer’s marketing giving them the opportunity to take their time making a buying decision and the ability to negotiate a price. The strong sellers’ market homes were selling above the listed price (January – July) where-as in a buyer’s market homes are selling below the listed price, (August – December.)

WHAT TO DO IF YOU’RE THINKING OF BUYING OR SELLING? Now more than ever it’s critical to work with an experienced Real Estate Professional who understands the current market, who you can confidently consult. As someone who is looking to sell your home, an experienced Realtor will be able to offer sound pricing advice, essential to getting your home sold. If you’re thinking of purchasing a home the experienced Realtor will safely guide you towards an affordable home of your dreams.