March 03 2025

Reef Daily

Reef Daily | March 03 2025

Housing Market Update

Latest Market Data (March 3, 2025) The housing market is showing a significant shift in favor of buyers across multiple regions of the United States, according to data released today. Analysis from Redfin indicates that January saw a supply of 3.7 months of homes for sale, marking the highest inventory availability in six years. This represents a substantial change from the seller-dominated market that has persisted for years, as a market with more than four months of available inventory generally signals a shift toward buyers having more leverage. Market data indicates that determined buyers are encountering less competition and have a broader range of choices as the spring buying season approaches. An unusually high number of homes have recently been removed from the market, with CoreLogic reporting that 7.6% of homes listed for sale were delisted in January, the highest percentage seen in over ten years, suggesting sellers may be adjusting to changing market dynamics.

The housing market continues to show regional disparities in terms of inventory and buyer power. Southeast Florida currently represents the strongest buyer's market in the country, with cities like Cape Coral and Miami boasting over 11 months of home supply available. Other Florida markets including Fort Lauderdale, West Palm Beach, and Jacksonville also show significant advantages for buyers. By contrast, intense competition remains unabated in many northeastern cities, with Rochester having only one month of supply available in January, making it the city most favorable to sellers among the 100 most populous metropolitan areas in the United States.

Mortgage Rates

Current rates as of March 3, 2025:

Type	Today's Rate	Last Week's Rate
30-year fixed	6.76%	6.94%
15-year fixed	6.05%	6.26%
5/1 ARM	6.12%	6.20%

Future Forecasts Mortgage rates have started March approximately 20 basis points lower than their February average, according to the latest Zillow data released today. Rates unexpectedly plunged last week and have remained around 6.30% since, potentially creating more favorable conditions for spring homebuyers. While this represents a positive development for prospective buyers, rates remain historically elevated. Future rate movement remains uncertain, with analysts noting that mortgage rates have been highly sensitive to economic data recently. Lower inflation and weaker economic conditions could potentially drive rates down further in the coming months, while persistent inflation and strong economic indicators might keep rates near current levels.

Notable Transactions

Commercial Highlights Several significant commercial property transactions were reported in the past 24 hours across various regions. In Florida, a major land acquisition was completed by Florida Power & Light Co., which purchased vacant land in Immokalee from Barron Collier Partnership LLLP for $23,435,300. Additionally, JTC Holdings/Staples LLC acquired a retail store at 6305 Naples Blvd., Naples, from USR Real Estate Holdings LLC for $4,600,000. In Tampa, Learn Amore Lead LLC purchased a retail strip center at 4267 Henderson Blvd. from Jerard Properties Inc. for $6,615,000, representing a significant value increase since its previous sale at $475,000 in January 1997.

Regional Activity In the Southeast region, Orlando's Dr. Phillips area saw notable residential sales activity, with an Estates at Parkside home at 8042 Ludington Circle topping the local market. The property, built in 2018 with eight bedrooms, six-and-one-half baths, and 5,471 square feet of living area, sold for $1,920,000 on February 25. Another significant transaction in the same area was a home at 8000 Oakland Place in Orlando's Windermere Heights neighborhood, which sold for $1,600,000 on February 25.

In the Northeast region, Mercer County, New Jersey reported 75 home transfers between February 24 and March 2, with the median sale being a 2,075-square-foot home on Beechwood Avenue in Ewing that sold for $301,000. East Windsor saw particularly strong activity, with six transactions including a high-end sale at 34 Wendover Road for $980,000.

Market Indicators

Inventory Trends The latest inventory data released today indicates significant regional variations in housing supply. At the end of January, Florida had reached record-high home inventory levels since Redfin started tracking this data in 2012. This substantial increase in available homes has shifted market dynamics, giving buyers more options and negotiating power. In stark contrast, northeastern cities continue to face severe inventory constraints, with cities like Rochester, Buffalo, and Hartford showing just over a month of supply.

Commercial Real Estate Performance Commercial property prices have shown positive annual growth in January of 0.3% after three consecutive monthly increases, including a 0.5% month-over-month increase to start the year, according to MCI's RCA Commercial Property Price Index (CPPI) national all-property index released today. This trend suggests a faster annualized pace of growth of 6.5%, indicating potential stabilization in commercial real estate markets after a challenging period.

Economic Indicators The broader economic landscape continues to show signs of uncertainty that could impact real estate markets. New data released today indicates that U.S. manufacturing activity is growing but at a slower pace than economists had forecast, with manufacturers experiencing a contraction in new orders. This comes amid concerns about the potential implementation of tariffs announced by President Trump on Canada, Mexico, and China, scheduled to take effect on March 4. These economic uncertainties have contributed to mixed trading on Wall Street today, with the S&P 500 down 0.2% in morning trading.

Regional Developments

Northeast The northeastern housing market continues to demonstrate resilience and high demand despite national shifts toward buyer advantage. Cities in this region remain among the most competitive in the country, with Rochester having the lowest inventory at just one month of supply. Buffalo, New York, and Hartford also show limited inventory with just over a month of supply available. The persistent shortage of available homes in these markets has led to continued challenges for buyers, with many properties receiving multiple competitive offers despite higher mortgage rates and economic uncertainties.

Southeast Florida's real estate market has experienced a remarkable transition from being one of the hottest seller's markets during the pandemic to now providing significant advantages for buyers. Southeast Florida in particular has emerged as the region offering buyers the greatest purchasing power compared to other areas nationwide. Real estate professionals in the area report that sellers have begun offering concessions such as assistance with closing costs and home repairs to attract potential buyers, a practice that had been unnecessary in recent years. This shift comes as Florida faces additional challenges related to rising homeownership costs, including increased property taxes and soaring home insurance premiums driven by climate change concerns and heightened risk of severe weather events.

West The western region continues to show diverse market conditions. California's housing landscape remains dynamic with significant regional variations. Recent data indicated a complex market with home sales decreasing by 10% from December, while median home prices rose to $838,850, representing a 6.3% increase year-over-year but a 2.6% decline from the previous month. The market in this region continues to be influenced by elevated mortgage rates and regional factors such as wildfire impacts.

Sources

This newsletter is for informational purposes only and should not be considered as financial advice.