Most national experts predicted a down year in real estate for 2023 with rising interest rates and economic concerns early in the year. Here in Gulf County we experienced an adjusting market that was still fairly productive, but definitely down from the previous historic outliers. Compared to the last 2 years, our sales volume was dramatically lower with values only slightly down in some cases from mid-2022. The number of willing buyers in our Cape San Blas, Indian Pass, and CR/SR 30-A corridor market in 2023 was significantly less than what we were used to seeing in recent years. Bidding wars have gone from a common occurrence to a rarity, and for the first time in a couple of years we’re starting to see a few appraisals come in lower than contract prices in the past few months. Sellers had to adjust expectations in many cases if they wanted to sell, as we can no longer assume the rapid appreciation and buyer demand that was commonplace in 2021 and 2022.
We’ll begin with a summary of residential sales activity for all of Cape San Blas, Indian Pass, and the CR/SR 30-A corridor for 2023. There were a total of 99 homes sold through our MLS last year, which is a 41% decrease from the 168 residential transactions we saw in 2022. Our residential sales volume also took a hit, with a 46% decrease from the $187,866,000 level we witnessed in 2022 to a more reasonable $100,615,877 figure in 2023. The average price of a residential property sold in our comparative market in 2023 was $1,016,322, which almost kept pace with our 2022 average of $1,118,250. This 9% decrease reflects what many now see as inflated values in 2022 due to residential market conditions at that time. Meanwhile the median residential sales price was $745,000 in 2023, which is down 15% from the previous year’s $877,500 median number. The days on the market stat almost doubled this year compared to last, as the average went from 36 to 61 days, while the median number of days increased from 19 to 34 in 2023. Values continue to hold their own in our beaches residential market, as properties are still selling for over 95% of their list price, only a slight decrease from 97% list to sales price ratio we’ve seen over the past couple of years. The table below summarizes these data points over the past 3 years for reference:
Residential Sales - Cape San Blas, Indian Pass, CR/SR 30-A Corridor
| Residential Data | 2021 | 2022 | 2023 |
|---|---|---|---|
| Number of Sales | 205 | 168 | 99 |
| Sales Volume | $179,176,400 | $187,866,000 | $100,615,877 |
| Average Sales Price | $870,295 | $1,118,250 | $1,016,322 |
| Average Days on the Market | 61 | 36 | 61 |
| List/Sales Price Ratio | 97% | 97% | 95% |
Vacant lot sales continued with the cutback theme for 2023, as the amount of sales and volume decreased at a rate very similar to what we noticed in the residential market. Total number of lot sales in our relevant market dropped from 172 in 2022 to 98 lots sold in 2023, a 43% decline, while total sales volume dipped from $48,549,400 in 2022 to $29,599,249 in 2023, a 39% drop. Unlike residential sales, the average price of a sold vacant lot actually increased by 7% in 2023 to $302,033, while the median sales price for a vacant lot was exactly the same for the past 2 years, $175,000. Average days on the market dropped from 103 in 2022 to 100 days in 2023, while the median days on the market increased from 48 days to 67 days in 2023. The average vacant lot seller was getting 92% of their final asking price for their sales price, which represents a 2 point drop from the previous year. Once again, here’s a summary table showing this data from the past 3 years:
Vacant Lot Sales - Cape San Blas, Indian Pass, CR/SR 30-A Corridor
| Vacant Lot Data | 2021 | 2022 | 2023 |
|---|---|---|---|
| Number of Sales | 339 | 172 | 98 |
| Sales Volume | $64,970,935 | $48,549,400 | $29,599,249 |
| Average Sales Price | $191,655 | $282,264 | $302,033 |
| Average Days on the Market | 112 | 103 | 100 |
| List/Sales Price Ratio | 93% | 94% | 92% |
On the subject of inventory levels for the Cape, Indian Pass, and 30-A corridor, we started 2023 with 34 residential properties and 88 vacant lots listed for sale on our MLS. Our residential level fluctuated early in the year, with the annual low of 26 homes for sale in late February. Once spring arrived there was a steady climb for the rest of the year in the residential inventory levels, mostly in the 50s for late spring and early summer, climbing into the 60s by August, and into the 70s and 80s by fall and early winter. The vacant land inventory level remained at a much more consistent level in 2023, staying in the 80s and 90s for most of the year. 2023 transitioned even more from the extreme sellers’ market of 2021 and early 2022 towards a more balanced market, although we’re still not close to being considered a buyers’ market. We just started 2024 with 78 homes for sale and 90 vacant lots available, and I would expect for our “nuanced sellers’ market” conditions to continue. I think we’ll start seeing a bit more inventory coming on the market as we get closer to spring and summer, but the buyer demand should still be enough to keep our market conditions consistent.
While interest rates and consumer confidence seem to be a bit more favorable heading into 2024, one challenge our market will continue to face will be the Florida insurance situation. Property insurance rates have gone way up over the past few years, mostly due to severe weather events, inflationary pressures on rebuilding costs, and widespread fraud. Some buyers are getting priced out of our market due to escalating insurance costs, with little sign of relief in the near term. Sellers in our market need to recognize that their current premiums are no longer accurate representations of what buyers will be facing for new underwritten policies. For those of you who want to better understand our current FL insurance situation, here’s an informative video put together by HH Insurance – FL Insurance Summary, 2023 We are still seeing a good number of cash buyers in our market, and I expect that we will see more of these buyers electing to self-insure, especially with flood insurance. It’s also worth mentioning that our vacation rental market is remaining relatively strong, although not quite as robust as what we were seeing in 2021 and 2022. Several local property management companies are estimating a 15-25% decline in annual revenues for their properties in 2023, while a few other more selective management companies are reporting minimal declines in their revenue numbers, with little or no decline to revenues for the higher-end, waterfront properties with pools.
All things considered, 2023 was a pretty good year for real estate sales on Cape San Blas, Indian Pass, and the CR/SR 30-A corridor. Our market was due for an adjustment after the previous 2 years as production levels show, but our values are in good shape, and most buyers still recognize opportunity in our market. There is optimism about the 2024 real estate market on a national level with interest rates expected to be cut and fewer economic concerns compared to this time last year. Our local market tends to be a bit more insulated with so many second homes, income-producing properties, and cash buyers, so I would expect another good year of production for our beaches market, hopefully improving on 2023. Buyers and sellers will likely continue to be patient in 2024, as real estate ownership is obviously a lot more expensive than it was a few short years ago. Buyers should have a bit more negotiating power to go along with an improving inventory, and sellers will continue to do well as long as they have reasonable expectations based on recent comps. The cowboy philosopher Will Rogers said it best – “Don’t wait to buy real estate, buy real estate and wait.” Here’s to another great year at the beach – let me know anytime I can help, [email protected] or (850)899-8765.
Cape San Blas