Through the first 3 months of the year, the market is doing “okay”. The 4th quarter of 2022 was pretty slow with some real concerns about the possibility of falling prices and fewer buyers in 2023. That’s not been the case, and overall things are positive. Prices haven’t raced up like ’21 and ’22, but the market has been holding steady and near all-time highs for most homes. People are continuing to buy, and we’re staying popular with new primary residents as well as our beaches being very popular with 2nd home and vacation rental buyers. There’s solid positive momentum at the very least right now in the market. Our 98 Real Estate Realtors are busy and we’ve closed 17 deals in the past two weeks totaling over $6.5 Million.
The projections of 2023 being a pretty flat year, with either slight increases or decreases in values, look accurate through the first quarter. With prices doubling on most homes since 2019 as discussed in my last newsletter, I’ve considered a flat 2023 to be positive with the market holding all or at least most of the gains made in recent years. Below are the average sales prices for 2022 compared to the first quarter of 2023. From a practical manner, most homes are going for about the same or a little more than they averaged last year and vacant lots are selling for slightly less. The average prices are a little skewed on the high side in Mexico Beach to WindMark because of a number of beachfront sales. The Cape definitely doesn’t seem down when comparing apples to apples, but there haven’t been as many beachfront sales vs interior sales, which lowers the averages. If current trends continue through the year, home values will go up slightly and vacant land values will go down slightly.
|Port St Joe||$184,614||$222,262||$297,116||$341,465||$356,871|
|Port St Joe||$60,251||$87,468||$110,658||$116,065||$149,625|
The number of homes selling is only down slightly in Mexico Beach and Port St. Joe and it seems only down more significantly on the Cape; where inventory is still at scarce levels. Vacant land sales have slowed more than homes, but both are moving at healthy paces with the 106 number of sold homes averaging 97 days on market and 79 days for the 58 vacant lot sales. The market was in a frenzy at this time last year with low interest rates and what seemed like everyone in America wanting a 2nd home to use as a vacation rental. We then averaged 45 days on market for homes that sold in the first quarter of 2022; which is the lowest I recall ever seeing.
We’re getting into what’s traditionally the busiest and best time of the market each year that runs May through July with a percentage of vacationers looking to buy while on their trip. The inventory has held steady since fall, even reducing in some categories. Those hoping for price decreases expected there would be far more sellers having to compete to sell than what we’re currently seeing. There’s enough for sale that only the sellers that are standing out with their attractive prices are selling, but not so much for sale that we’ve seen reductions below recent selling prices. I wouldn’t go as far as calling it a buyer’s market, but it’s not the seller’s market of ’21 and ’22 either. Cash buyers are starting to expect and are seeing some better negotiating with sellers having to compete more this year. About a 1/3 of homebuyers have paid cash this year while almost 80% of lot purchasers have paid cash. Here are the 88 listings that have found buyers and are currently under contract.
I’ve talked to 5 or 6 vacation rental company owners that are my friends. They are all pretty open with me as we don’t manage rentals and compete with them in the management business. Vacation rental numbers have been on a similar pattern as sales prices in recent years and rates have gone up significantly in the last few years. 2021 and 2022 were banner years for vacation rental homes in our area. None of these companies are trying for higher rates in 2023. For the most part, they told me they are trying to maintain the rates achieved last year. Multiple owners have told me that Spring is down with less demand than last year. Summer looks good for them and they think most homes will perform close to where they did in in 2022. Lots of vacation home owners obviously want each year to be better than the last. I’ve got some owners that have seen gains each year for the last 10 years in a row. 2023 won’t be another year of everything going higher and higher, but it should come very close to tying the records set in 2022. More than one manager said they’ve had to make some reductions, and renters are more cautious with their spending this year. There’s also more competition for renters with more homes getting built, and people buying homes that were primary residences and making them rentals. I was told there are approximately 20% more homes on the vacation rental market this year compared to last. It seems the nicer the rental home, and the more amenities it has to offer, the better it does.
Along with the market, overall things are positive with the local economy. There are more and more shops and restaurants opening in Port St. Joe, and the very nice new marina is a great asset for the area. Commercial property remains limited in Mexico Beach, but the owners of the iconic “Toucan’s” beachfront restaurant that was destroyed in Michael have received a building permit and hope to start construction later this summer. Tyndall Air Force base that’s being called the base of the future is in about the middle of their 5-7 year rebuild. The 200 apartments on the west end of Mexico Beach built by The St. Joe Company with Tyndall’s growth in mine are set top open soon. Residential construction remains wide open on Cape San Blas and Mexico Beach along with DR Horton in WindMark.
With the area packed with vacationers through the summer, I expect the market to be solid through at least July. I’m not saying it will go down after that, but there are so many buyers planning to look this Summer it seems impossible to go down in Summer. Interest rates for a 30 year mortgage are around 6.4% right now, down from over 7%. It would certainly help the market if rates start going back down and the national economy and stock market are doing well.
Michelle and I are having lots of fun with Ollie at 2 and Hudson at 5. I’m helping coach the 98 Real Estate T-ball team and life is good.
Broker/Owner 98 Real Estate Group
#1 Producing Real Estate Company Located in Mexico Beach
Ten Years in a Row and Counting
Voted #1 Agent on The Forgotten Coast- 2013 and 2015