A lot of unusual news has flourished since the first month of this new decade. Covid-19 erupted into our lives in January 2020 and did not fully disappear until the end of 2022. Mortgage rates began their rise in January 2022 from below 3% in 1/2022 to around 7% since 10/2022. To compound the issue, the list of problems around the globe is long and would not fit in this newsletter. It is therefore relevant to ask, “How has this dose of uncertainty affected our local real estate market in North Santa Rosa Beach?”
To answer this question thoroughly, we must look at several variables, including the evolution of price ranges, the progression of median sales prices, and the fluctuation of the number of transactions. We will start by looking at the number of sales that have occurred monthly and quarterly since January 2020 and until June 2023. As visualized on the graph at the bottom of this article, the table below displays a formidable stability of the sales activity over the period’s three-and-a-half years, or forty-two months.
Since 2020, the first quarter of each year brings about fifty (50) sales; it is the slowest quarter of the year; it represents 20% of the yearly total. The second quarter, approximately sixty (60) sales. The third one, the busiest one, is tickling eighty (80) sales; it adds up to over 30% of the yearly sales. The last quarter of each year, the second best in volume, tallies about seventy (70) sales. Our market seems oblivious to the bad news carried by the media.
As a side note, this cycle has one obvious consequence: if a property owner wants to sell, best is to list with a REALTOR® in June or July.
The last quarter of 2022 (Q4-2022) stands as an exception with a volume of 45 sales, or roughly 35% below the norm. Two other months have also been weak: January 2023 and April 2023. The January 2023 drop can be seen as the continuation of the previous quarter and its poor performance. April 2023 is an exception, a statistical fluke, and nothing else, as shown by the normal performance of the two following months. Last, a strong month of June 2023 underscores that our future looks promising.
What does this tell us? It sends the clear message that our little piece of paradise appears to be recession-proof. The cycle of the seasons (or quarters) follows the academic calendar. We are family-oriented. This is why the third quarter (July, August, September) is the busiest. A similar cycle applies to most metropolitan areas; people move around their children’s school years. But is this stability the norm in the Florida Panhandle market? Absolutely not…
Our company thoroughly studies many markets in NW Florida. Similar analyses of other markets located near ours show very different trends. They display an acceleration of the number of sales from 5/2020 until the end of the summer 2021, but a drastic drop since – a drop predating the higher mortgage rates, proving that the higher rates might have worsened an existing situation, but did not trigger the problem.
In conclusion, we have experienced an undeniable and remarkable stability. Why? Possibly because we live in the perfect place for the present times. Our owners are residents and not speculators. We have the market permanency of a metropolitan market with the added benefits of the beach and the bay.
Our next edition of Anchor’s The Way will take a closer look at the evolution over the same period of the sales prices range and median. This study scheduled for print next month should enable us to conclude that our market is strong and sustainable. It should also allow us to understand where the pricing might be heading.