Interest Rates in the beginning of April last year were around 3.5%. Today interest rates are hovering around 5.5%. The majority of the interest rate hikes have come in the last 90 days. You can see that 90 days ago the interest rates were 3.72% compared with 5.72% today. That is a 2% change in 3 months. Which significantly affects affordability for the buyer that is leveraging a mortgage. I am helping one of my first friends from childhood look for their first home in the area. The were pre-approved back in January for 210k. Because of the rapid change in interest rate, they are not maxed out shopping around 165k. Luckily I was able to get them under contract in a super cute home in Palatka.
Homes on the Market – If you look at the current supply of Homes. We have just over 2,300 homes on the market. If you are comparing that with Pre-Covid Times, April 2019, we had a little over 9,000 homes available on the market. We were in a sellers market here in April 2019; That should be a stark comparison to show that we do not have enough homes in todays market. Why is that?
Affordable Housing? – St Johns county is in an interesting situation. The prices have risen so rapidly that for many people that have lived her for several years; prices are unaffordable. The county has been dragging its feet IMO. Of course there is local bickering in terms of where the affordable housing should go. I covered a Not in my Backyard type of situation on one of my previous livestreams; St Augustine beach residents said that affordable housing would add to the bad traffic situation and destroy more ecosystem. They just got approved to build 500 “Workforce Housing” units. Which should cost less than 240k. With the issues in building that most contractors have seen I do not see how this will make a difference. They approve 500+ subdivisions every week.