Market Update September 2023
With Brad O’Connor Ph.D.
TRT: 6m 18s
Video Transcription

Brad O’Connor directly addresses camera:  The third quarter of 2023 is in the books, and Florida Realtors has released its monthly housing market statistics for September. Let’s dive into the numbers, starting with the statewide figures for closed sales of existing single-family homes. But before we talk about how sales performed in September, let’s get some context by first focusing on last year's monthly sales trend, shown here in blue, and let's compare that to the trend from 2019, shown here in pink. We’re comparing to 2019 since that was our last full pre-pandemic year on the books. Notice how the level of sales in the first three months of 2022 was much stronger than that of 2019, which makes sense, because mortgage rates were only just starting to rise at this point in 2022, and didn't really start taking off until the spring. But as you can see, as the year progressed and mortgage rates started rising in earnest—reaching as high as 7% late in the year—2022’s performance in terms of closings was significantly less than that of 2019.
Mortgage rates did pull back a little bit at the very end of 2022, which helped boost sales early on in 2023, but for most of 2023, rates have been rising—just at a much slower pace than last year. Sales levels this year have therefore not worsened significantly, but they certainly haven’t improved much, either. For the most part in 2023, like last year, we have been performing below the level we were at in 2019. But the level of closed sales in 2023 has been gradually converging with last year’s level, and in September, closed sales of single-family homes were in fact up for the first time this year compared to a year ago, rising by over 6%. Closed sales of townhouses and condos in 2023 have been converging with their 2022 levels as well, but we were still down in September year over year by a fraction of 1%. 
Now, those are the figures for how many sales *closed* in September, but we can also look at how many homes went under contract, as well. That might give us some clues as to how closings will go over the next couple of months. Well, for single-family homes, new pending sales were down compared to a month ago in August, but that’s normal for this time of year due to seasonal changes. If we instead look at the year-over-year change, which bypasses those pesky seasonal effects, we see there was only a *very* slight decline of 1/10 of 1% in September compared to a year ago. 
Staying in the single-family home category for the moment, let's also look at the supply side by checking in on new listings in September. New listings have been at their lowest level in several years so far through 2023, but you *can* see that in recent months, the level of new listings has been a little closer to pre-pandemic levels than it was earlier in the year. In fact, new single-family listings in September exceeded the number of new listings in the same month in 2019 for the first time this year. The same is also true if we compare this September’s new listings to those of *last year*, amounting to a year-over-year increase of 8%.
With the seasonal decline of new pending sales in September compared to the month before, and the improvement in new listings, we ended up with more active inventory at the end of September than at the beginning of the month. We also currently have a slightly higher inventory of single-family homes than we did a year ago, but note we are still pretty far below the pre-pandemic level of inventory at this time in 2019. 
Over in the townhouse and condo category, new pending sales were down 6/10 of 1% year over year in September. That’s similar to what we saw for single-family homes. New listings of townhouses and condos, on the other hand, increased by close to 24% year over year. Much of this increased listing activity occurred in Southwest Florida, where new listings had been depressed somewhat last year in part due to the arrival of Hurricane Ian late in the month. But there were other parts of the state where there was some strong year-over-year growth in listing activity, as well. As a result, the inventory of active townhouse and condo listings on a statewide basis is increasing again at the fastest rate we've seen since the midpoint of last year. It is now well above where it was at this point last year, but is also still quite far below pre pandemic levels.
So, with inventory levels improving, but still well below pre-pandemic levels, home prices have remained fairly steady this year. The median sale price for closed sales of existing single-family homes in September was up 1.3% year-over-year to about $410,000. As I mentioned earlier, sales of closed existing single-family homes were up for the first time this year on a year-over-year basis, so with prices holding steady, it should come as no surprise that September 's dollar volume of closed sales was also up year-over-year for the first time in 2023, rising by over 14% to $12.2 billion.
The median sale price for townhouses and condos, meanwhile, was up almost 6% year-over-year in September, rising to nearly $325,000. With closed sales in this category falling by only 2/10 of 1%, dollar volume was also up in this category year-over-year for the second consecutive month, rising by 4.5% to $3.7 billion.
Wondering how well your neck of the woods fared in September? Be sure to keep an eye on your local market statistics in SunStats, our interactive archive of market data available exclusively to Florida Realtors members. Just go to www.floridarealtors.org/sunstats to get started! See you next month!