You may have heard talk of a housing market correction. Many economists say the national market is already in one and that it will continue in 2023. Will the Emerald Coast experience market correction next year?
There are strong indicators that the national market is in correction at the end of 2022. However, that does not mean every regional market is in correction. This post will cover some data that can tell us whether we should expect a correction in Emerald Coast.
A decrease in home sales can indicate a market correction might be coming or already underway. If you look at numbers for Destin, home sales in November are down over 60% compared to November 2021. However, looking at Freeport, you will see home sales up 10% from last year. The data from Miramar Beach also indicates a slowdown. Home sales in Miramar Beach are also down over 60% from November 2021.
When homes take longer to sell, it signals that a correction is on the way or already occurring. It is an indication of lower demand. The numbers show homes in Destin staying on the market much longer than last year. The average days on the market more than doubled from 19 in November 2021 to 39 in November 2022. Homes in Freeport were on the market about 30% longer this November than last. Miramar Beach actually saw a slight decrease in the number of days homes stayed on the market.
Increases in mortgage interest rates can also act as a signal for a market correction. Most people are aware of the recent increases in mortgage interest rates. The rate on a 30-year fixed-rate mortgage was a little over 3.5% at the start of the year. At the time of writing, the rate for a 30-year fixed-rate mortgage is a little over 6.5%. However, this is down from highs of over 7% in October 2022.
Sale prices are the chief indicator of a market correction. When prices drop gradually, it can signal that a correction is occurring or underway. Sale prices in Destin have seen a decrease of over 2% year-over-year. However, the average sale price for homes in Freeport is up over 16% from last year. Head to Miramar Beach, and you will see prices up slightly over 9% this November.
As you can see, the data for Emerald Coast is a little mixed. However, there are indicators that a market correction could be in the forecast for 2023.
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