Interest rate hikes are already having an impact on real estate

St. Augustine real estate broker: Homes aren’t selling as fast as they did just a month ago

ST. JOHNS COUNTY, Fla. – Since the pandemic, home buyers outside of Florida have swarmed in the Sunshine State to start a new life.

Which is good news for some. Why? Rise in interest rates.

Just a month ago, St. Augustine homebuilder and neighborhood developer Chris Shee said First Coast News he couldn’t build houses fast enough for foreigners who wanted the Florida life.

“About 80% of our new real estate deals are from out-of-state people right now,” Shee said.

Again, that was a month ago.

On Monday, St. Johns County realtor Teresa Mercurio said there were definitely people from outside Florida moving here, but that was slowing down a bit.

The recent rise in interest rates has caused buyers to put the brakes on, Mercurio said.

“Not just out-of-town shoppers, but local shoppers,” she noted.

The 30-year fixed-rate mortgage averaged 5.81% last week, according to Freddie Mac.

At this time last year, rates averaged 3.02%. Rates had not been this high since 2008.

Mercurio explained, “The result is that prices will start to go down. Inventory will start going up again.”

And that means the signs for sale are also longer in the front yards.

Pointing to a chart from the Northeast Florida Association of Realtors, Mercurio said: “At the end of May, ‘days on market’ was just over 26 days. At the end of June, you’re probably going to see that go up to 35-40 days. “

She said the market was starting to moderate.

“It’s healthier for buyers because it gives buyers more opportunities to get in there and not have a multiple offer situation and go higher, higher and better,” Mercurio said.

Time will tell if this is a wind of change or just a housing market jolt that statisticians will pick out.

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