Dr. O’Connor Provides Florida Real Estate Update at Chamber Breakfast Meeting

The Hernando County Chamber of Commerce met on Wednesday for their monthly breakfast meeting at the Sand Hill Scout Reservation. Century 21’s Broker-Owner Marilyn Pearson-Adams kicked things off by discussing her firm, which sponsored the meal, before the keynote speaker’s presentation.

“Family first is our motto,” Pearson-Adams said. “The reason that is important is obviously we are blessed to go out every day and make the American dream of home ownership a reality and to provide shelter for family. That is what we do, and we take that very seriously.”

Pearson-Adams added that Century 21, which is currently celebrating its 45th year in business, has realtors that are extremely knowledgeable and there to help. No matter who you have as a liaison between buyer and seller, she urged that being friends with your realtor is crucial.

While members munched on the morning’s morsels, the Florida Association of Realtors’ Chief Economist, Dr. Brad O’Connor, came forward to talk about the development of the Florida housing market.

The most drastic of these updates, arguably, was the marked rise in “housing inventory” in the state of Florida just since last year. Over the previous six years, Dr. O’Connor had spoken at the Chamber’s gatherings, he had lamented the lack of houses on the market. That was not so on Wednesday.

The paltry amount of inventory, which is an issue that stretches back beyond the pandemic, has increased by 50 percent year over year for single-family homes. A whopping 75 percent more townhouses and condos are on the market, and roughly half of this stock is in South Florida alone.

He assuaged potential concerns, considering the last time such a thing happened, buyers were scarce, property values went down, and the crash of the late 2000s followed. This time, he noted that the landscape and situation are different as the numbers, which had dropped precipitously, are actually just returning back to normal levels.

The other fear Dr. O’Connor addressed was that with inventory rising, more people must be listing their homes. According to his data, this is not true. In fact, stretching back to 2018, his information states that Hernando had fewer listings last year (2023) than the last several years.

“We haven’t had enough sales recently to pull inventory down,” he stated. Two years ago, the listings would be sold within 10 days. Now, the average has risen to near 40 days on the market. That could easily influence housing inventory metrics.

Why have there been fewer sales? One of these reasons is the rising interest rates on mortgages. Dr. O’Connor believes that these rates could decrease to as low as 6 percent, but it is unlikely that they will diminish further for the next two to three years.

Other factors he posited played a role in slowing sales are rising property insurance rates, slowing rent growth, condo reserve requirements, and slowing in-migration (people moving from one state to another). The decrease in-migration rates is not unique to Florida, though. Every state in the union besides Texas has been seeing lower numbers in this category recently.

It is also worth noting that our state is just now reaching a new equilibrium since the influx of out-of-staters brought on by the pandemic. This is still higher than what it was before the shutdown, as “a lot of people’s eyes have been opened to how great [Florida] is,” the Doctor of Economics said. Overall, though home purchases are down across the country, our state still enjoys 90 percent of what our sales were previously.

Dr. O’Connor graduated with a bachelor’s degree in economics from The Ohio State University and earned his Master’s and Doctoral degrees from Florida State University. As Pearson-Adams noted, the learned economist’s academic research “chiefly involved land use regulations on housing markets.”

Moving forward, as always, the local Chamber of Commerce has a variety of events on the horizon including the ribbon cutting of Paint EZ of North Tampa on the first of November. The next monthly membership meeting is scheduled to be held on Wednesday, November 20.