“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.”

Henry Ford

In the 2023-2026 Florida and Metro Forecast, Dr. Sean Snaith, the director of the University of Central Florida Institute of Central Forecasting said “The U.S. economy is either in or on the brink of a recession. Because of the forecasted shape of the recession: a gradual decline into recession and 12 or more months in the downturn followed by a gradual climb out of recession, we have dubbed the recession the Pasta Bowl Recession.” If you haven’t heard him speak, take the opportunity. He is very smart and very funny.

A few interesting predictions from the forecast are:

Real Gross State Product will mildly contract during the recession as growth will slow to -1.3% in 2023, turning positive in 2024 and accelerating in 2025 to reach 1.7% by 2026.

The unemployment rate was 2.9% in 2022. The recession will push up the rate to 4.6% in 2023, and to 5.8% in 2024, before easing slightly to 5.4% in 2025 and 5.0% in 2026.

Housing starts were 192,294 in 2022 with starts decelerating to 133,829 in 2023 and 134,755 in 2024 before ticking up to 149,920 in 2025 and 152,865 in 2026.

The Northeast Florida Association of Realtors (NEFAR) market stats for January 2023 show the median sales price is stable, closed sales are down, pending sales are up and inventory is up slightly from last month.

The median sales price of $330,000 is down 2.4% from December and up 3.4% from last January. There were 1,525 closings which is down 30% from last month and 33% from last year. This reflects the last several months of very low buyer demand.

There were 2,248 pending sales in January. This was the most since August of 2022. Nationally, pending sales increased for the first time since May.

“This recent low point in home sales activity is likely over,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”

There were 3,451 new listings in January which is 32% higher than the previous month and 19% higher than last year. The active inventory went from 6,231 last month to 6,403. When you read how much inventory has increased, keep in mind how many of the new listings were absorbed. There is plenty of demand and the spring buying season looks to be warming up.

I love this time of year with March Madness coming, Baseball Spring Training starting and the real estate market getting back to a more normal rhythm. If we can help you with any of your real estate needs, please let us know.