Have we hit the peak of the housing market?
The wild ride in the housing market could be coming to an end in Northeast Florida.
Prices are still rising, but fewer homes are selling, more are listed for sale and houses are lasting longer on the market.
Inflation and rising mortgage rates have doused a market that has boiled for months, and the Federal Reserve is likely to push rates even higher this month.
The median sales price for single-family homes in Northeast Florida rose to a historically high $400,000 in June, a 2.3% increase from the month before, the Northeast Florida Association of Realtors reported this week. But that included offers from a few months ago, before the market began to feel the effects of rising mortgage rates, the Realtors association said.
The number of sales that closed in June fell 4.1%; pending sales declined 13.2%; and the number of sellers getting more than their asking price dropped 8.7%.
Meanwhile, more homes are hitting the market, giving buyers more options. A total of 4,109 single-family homes were available in June, up 17.4% from May. The median time a home remained on the market increased 46.2%.
The Realtors association said the data indicates that "prices may slowly begin to normalize in the coming months." Buyers might be elated if not for high prices.
Prices rose last month in 99 of 100 markets nationwide, according to research this month by Florida Atlantic and Florida International universities.
“There are plenty of reports that mortgage applications and home showings are falling as interest rates rise,” said Ken H. Johnson, an economist in the FAU College of Business. “We expect prices eventually will level off as well, particularly if a recession occurs and lending rates remain high. But so far prices continue to rise in the vast majority of markets.”
Homes are selling at a premium in every part of the country, the research shows.
Homes in Jacksonville, for example, sold in May for an average of 44% more than they should have, based on historical trends, the study said. Jacksonville was the 26th most overvalued market in the country.
Nine of the nation's 50 most overvalued markets were in Florida, a result of people resettling from the north and driving up prices, the researchers concluded.
“The evidence continues to suggest that we are nearing the peak of the current housing cycle,” Johnson said. “People buying homes now in the most overvalued markets should be prepared to stay there for at least several years to ride out what could be a bumpy stretch for prices.”