It seems that at the tail end of 2024, the South Florida real estate market had some big changes compared to a year ago. From increased home prices to increased days on the market, here's a closer look at the leading trends shaping buying and selling in the Boca Raton area.

Home Prices on the Rise

  • The average sale price is up 23% year-over-year, standing at $1,127,794 in December 2024 from $919,885 in December 2023.

  • The median sale price increased by 3%, growing from $580,000 to $594,950 year-over-year.

  • Year-to-date, the average sale price rose 24% and the median sale price was up 11%.

This uptick in price is representative of continued demand across all segments but especially within the luxury markets as mortgage rates rise.

Inventory and Listings Growth

  • New listings increased 2% in December 2024 compared to December 2023.

  • The total inventory increased 23%, from 2,071 active listings in December 2023 to 2,552 in December 2024.

  • Inventory remains 3% below the pre-pandemic level of December 2019, showing that long-term low supply is still at play.

  • Year-to-date, new listings are up 10%, adding more homes to the market.

While inventory levels have improved, they remain relatively low and are keeping prices higher.

Homes Taking Longer to Sell

  • The average days-on-the-market increased to 35% year-over-year, from 62 days in December 2023 to 84 days in December 2024.

  • Median days on market increased even more, up 42%, from 31 to 44 days.

  • Year-to-date, the median days on market spiked 52% over 2023 as today's market moves slower, giving buyers a little more time to decide.

Trends such as these suggest a strong demand for homes while being choosier, as it does mean that homes list longer. The imperative is clear on the seller's side: they should competitively price their homes, make sure to stage them accordingly, and look for serious buyers.

Market Absorption Rate

The absorption rate indicates whether the market is a buyer's or seller's market. The higher the absorption rate, the slower the market, with an increasing inventory; the lower the rate, the stronger the demand:

  • The overall absorption rate increased from 5.19 months in December 2023 to 6.83 months in December 2024, thus moving toward a buyer's market.

  • For homes under $500K, the absorption rate went from 6.93 to 8.82 months and therefore showed a slower sales cycle for this segment.

  • In the $500K-$750K range, there was a significant rise in absorption rate from 3.75 months to 6.87 months, indicating a slower market when compared to the prior year.

We see longer listing times across the board at all price points than in previous years; it is most noticeable in lower- and mid-tier markets. While this does give buyers more bargaining power, sellers are still best advised to price competitively to attract serious buyers.

Luxury Market Overview

High-end real estate market ($750K and above) still leads in longer selling times, but price trend performances are still relatively strong:

  • Over $1.5M had an absorption rate of 11.71 months for December 2024 from 12.61 months in December 2023.

  • $1M - $1.5M increased from 6.81 to 8.15 months of absorption rate evidencing the slowing pace for high-end homes.

  • It was the segment of $750K-$1M that set the pace in absorption rate, 5.68 months, hence showing consistency in demand.

Luxury buyers take their time to make a buying decision because of complexities in securing financing and uncertain market conditions. Nevertheless, South Florida remains very attractive for luxury buyers, especially those moving from high-tax states or looking for waterfront properties. The sellers of the luxury market need to be patient and get the property ready for discerning buyers.

Mortgage Rate Impact

  • The 30yr fixed rate mortgage ended December 2024 at 6.28%, up drastically from 3.45% in January 2024.

  • This rise in borrowing costs has led to slower home sales and increased time on the market, as affordability becomes out of reach for many buyers.

That's with mortgage rates far higher than a year ago, delaying purchases for many buyers and helping inventory climb higher, as listings take longer to sell. Still, interest rates are low by a historical standard, and buyers who lock in rates now could be ahead in the long run if rates fall in subsequent years.

What It Means to Buyers and Sellers

For Buyers:

  • More choices as inventory rises, but higher mortgage rates can dent affordability.

  • Homes are sitting longer on the market, which could mean better negotiating opportunities.

  • Some sellers are cutting their listing prices, which creates a buyer-friendly market in some price ranges.

For Sellers:

  • Price appreciation continues to be solid, although the market is slowing, which suggests that sellers have to be more strategic about pricing.

  • Properties that are priced correctly and marketed appropriately will sell more quickly in today's environment.

  • Staging and home improvements can make a property more attractive and shorten time on market.

Looking Ahead

At the end of January 2025, the South Florida real estate market is still competitive but cooling from its previous highs. Both buyers and sellers would be well advised to continue staying informed of pricing trends and market conditions for optimal decision-making.

Whether buying or selling in Boca Raton, Palm Beach County, or surrounding areas, contact The Mastropieri Group,Realtors® at (561) 544-7000 for professional assistance. Our team is ready to help you with all your needs so that you can face the market with complete confidence.

Educated and enlightened on this new market shift, buyers and sellers will finally know how to take full advantage of the real estate opportunities in South Florida. Whether you're looking to move up, downsize, or invest, 2025 offers unique advantages that can lead to a successful transaction if navigated well. Contact us for more information at any time!

Homes for Sale in Boca Raton



Posted by Larry Mastropieri on

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