Rising mortgage interest rates are dampening the red-hot real estate market. That, along with record-high housing prices, is leading to a decrease in sales and more homes on the market. In fact, active listings have increased by more than 100 percent from last year according to June data from the Realtors Association of Sarasota-Manatee.
"Clients are able to browse more properties than in the past few months versus seeing the same house for four months until a new house got on the market," says Keith Curcio, a realtor with Sarasota's Re/Max Alliance Group.
There were 2,088 sales across the two-county region in June, a 26.7 percent decrease from the same month last year. In Manatee County, single-family sales decreased from last year by 22.3 percent, to 645 sales, while condo sales decreased by 23.6 percent to 265 closed sales. In Sarasota County, single-family sales decreased by 26.9 percent to 802 sales, and condo sales are down by 34.6 percent to 376 sales.
"Compared to four to six months ago when there was a lot of waiving contingencies, buyers don't seem as aggressive," Curcio says. "A client just had an offer accepted with a contingency of selling another house–six months ago, that would have never happened. That tells you there's a shift."
At the end of June, there were 3,554 active listings combined in both Sarasota and Manatee counties, a 131.4 percent increase from last year. There were 998 more active listings reported at the end of June than at the end of May, a month-over-month increase of 39.1 percent.
Curcio adds that although interest rates have risen, that's not out of the ordinary.
"In reality, these rates are a reset toward normal. A lot of people will tell you that a 2.5 or 3 percent interest rate, like it was six months ago, isn't normal. Where rates are now is getting closer to normal," he explains. Based on the most recent data, current interest rates in Florida are 5.59 percent for a 30-year fixed mortgage and 4.82 percent for a 15-year fixed mortgage.
"I'd still call it a seller's market; I just wouldn't call it an off-the-charts seller's market," he says.
Still, despite the increase in inventory, the median sales price in the two-county area continues to increase. In Sarasota County, the median price for single-family homes increased by 25 percent compared to June of last year to $500,000. Condo prices increased by 34.4 percent to $416,250. In Manatee County, single-family home prices increased year-over-year by 35.7 percent, to $550,000. The median price of condos in Manatee County was $356,500, a 27.3 percent increase from last year.
Plus, properties are still going under contract in seven days or less, with the median time reported at six days for single-family homes in Manatee County and seven days for single-family homes in Sarasota County. The median time for condos to go under contract is at seven days for both counties.
Another data point immune to interest rates are cash purchases, which remain strong. Although there were fewer closed sales this June compared to June of last year, cash sales surpassed last year’s and accounted for more than 50 percent of deals for single-family homes in Sarasota county. In Manatee County, cash sales in June of this year were similar to last year, hovering just below 40 percent of deals.