Change Is Here
At the beginning of 2023 interest rates had nearly doubled, from the 3’s to the mid 6’s, compared to a year before. That pronounced changed made it clear that change was here.
In anticipation of these changes, many predicted that the value of homes would plummet and that there would be a reversal in the market. Things did plummet as expected, but it wasn’t the value of homes that suffered and the market did not revert to a buyer’s market. In fact, where it concerns Oakland Park, the trend, as far as the value of homes, has been quite the opposite and some sellers still own the day.
What Goes Up Doesn't Have to Come Down
In the chart above depicting sales for both single family homes and condos, it is clear that the number of sales is down. On the low side, 28% less single family homes sold. On the high side, 42% less condos and townhouses sold. The number of available single family homes and condos for sale is up. This latter statistic corroborates the decline in closed sales. In spite of the decline, the median sale price of homes did not go down, as many had predicted. On the contrary, it went up.
The Median Sale Price Anomaly
The charts above depict, in greater detail the changes in both single family homes and the townhouse and condo market. The additional metrics in these more detailed charts, continue to corroborate the expected decline, except for the median value of homes. The median value shows a rise between 11% and 33%!
So why the anomaly?
The increase in interest rates has priced some people out, but it hasn’t priced everyone out. There are still plenty of qualified buyers looking. While there are more homes for sale, buyers are not willing to just take anything they can get their hands on. Buyers are paying top dollar to borrow money and consequently are much pickier.
When a home that has been well maintained and priced accordingly hits the market, it garners lots of attention from eager buyers. They will pay top dollar and sometimes more than asking for a house they deem worthy. This is the part of the reason why the value of homes has held.
The other part of that reason is that Oakland Park has a very desirable set of characteristics. It has an outstanding location, and its homes are still relatively affordable compared to other areas in Greater Fort Lauderdale.
When Interest Rates Come Down The Market Will Go Up
High interest rates has limited the buyer pool and it has also limited the seller pool. Homeowners with low interest rates are reluctant to put their homes on the market to have to turnaround and buy with such high interest rates. Essentially, until interest rates go down, we can expect to be stuck in this limbo between a buyer’s and a seller’s market. The good thing is that when interest rates do go down, home values may still be up, allowing homeowners to capitalize on the gains of the pandemic.
Stay tuned to LivingInOaklandPark.com for my next report about the Oakland Park real estate market.
Got Questions About Real Estate ?
Ask Désirée,
Your Trusted Local Real Estate Expert !
Désirée has been a resident of Oakland Park for 35 years. She is a full time REALTOR® and is often quoted by the press for her real estate expertise. So if you have question about real estate ask Désirée, your trusted local real estate expert.
