How Did the Wellington Real Estate Market Do In 2023?
As mortgage interest rates rose in 2022 and 2023, many homebuyers expected a substantial drop in home prices in 2023. However, the anticipated “drop” never happened. Yes, the number of home sales in 2023 decreased compared to previous years, and even the median sales price dropped by 1.4% but those statistics don’t paint a clear picture of what’s been taking place in the Wellington real estate market. Let’s take a closer look at what actually happened in 2023.
Number of Home Sales
A total of 1,039 properties were sold in Wellington in 2022, and that number decreased down to 870 in 2023. We started the year off with 262 homes for sale in January and throughout the year that number slightly increased and decreased until we hit their 3rd quarter when inventory just increased.
Buyer profiles were strong in 2023! Cash buyers accounted for 49% of home sales while conventionally financed buyers made up 43% and FHA buyers came in at 3%. The remaining buyers (VA, owner financing, assumable, exchange, and other) accounted for 5%.
Bank-owned homes and short sales, were almost non-existent in 2023. A total of 2 homes were sold as a short sale and only 4 were bank-owned home sales. So less than 1% of home sales were distressed sales in 2023. That was the exact amount that sold in 2022, 6 distressed sales.
Median Sales Price
Wellington’s median sales price in 2023 was $669,500, a slight decrease from 2022, which was $679,000. However, we had a lot more challenges in 2023, mortgage interest rates were at an all-time high, and home inventory remained extremely low.
Days on Market
Days on market went from 14 days in 2022 up to 23 days in 2023, which is not a huge increase at all considering in previous years it easily took double that amount of time to sell a house in a “normal” seller’s market.
Why Didn’t the Wellington Real Estate Market Crash in 2023?
If you expected property value to significantly drop in Wellington Florida in 2023 you weren’t alone. Not only did many homebuyers think the market was going to “crash” they were counting on it but that didn’t happen in the slightest. While on paper it appears the market is slowly declining with fewer home sales and a decrease in the median sales price, but those numbers don’t accurately depict what is taking place.
With over two decades of experience as a Wellington Realtor and resident, I have navigated through various market conditions, including the challenging mortgage crisis from 2007-2010. While predicting the future is impossible with my wealth of experience in adapting to changing markets I knew there was no way the Wellington market was headed for any type of crash. Here’s why the market didn’t crash in 2023 and why it was confusing for some:
Lack of Inventory
We had a lack of home sales due in part to not having inventory. It’s impossible to sell real estate when there is no real estate to be sold. At the beginning of 2020 (pre-covid) Wellington had 546 homes for sale and ended the year with only 357 homes for sale, making it a seller’s market throughout the entire year. As of today we only have 322 homes for sale, and with only 3.5 months of inventory, we are still experiencing a strong sellers market as we enter 2024.
Additionally, not many homeowners can or want to move. Who wants to trade in their 2% mortgage rate for 7%? Not many, which has contributed to the decrease in the number of home sales and lack of home inventory.
No Real Decrease
While the overall “median” sales price in Wellington dropped by 1.4% many neighborhoods throughout Wellington saw an increase in property value. Grand Isles at Wellington is a great example. In 2022 the median sales price was $587,500, which increased to $650,000 in 2023, that’s almost an 11% increase.
Yes, some neighborhoods experienced a minor decrease and others remained unchanged, but it’s essential to put things into perspective. Considering that the median sales price in Wellington surged by 60% from 2020 to 2022, a 1.4% or even a 5% drop is relatively insignificant in the grand scheme of things.
While there were numerous price reductions throughout the year, it didn’t signify a market crash, as many had thought. Instead, it was a result of unrealistic sellers initially overpricing their homes, assuming the market was still increasing 25%-27%. Eventually, these sellers adjusted their prices to match the market value, making a $150,000 price reduction not an act of desperation but a correction from an initial listing of $900,000 to the actual worth of $750,000.
Cash buyers accounted for 49% of the homebuyers in 2023 making mortgage interest rates irrelevant. Despite the notion that cash is king, it didn’t translate into significant discounts last year. The median list-to-sales price ratio for cash buyers in 2023 stood at 97%, while for financed buyers, it was 98%. So, although there was a perceived “discount” for cash transactions, it was relatively modest.
Despite encountering the highest interest rates since 2001 and grappling with a shortage of home inventory, the real estate market in Wellington Florida, has steadfastly maintained its status as a seller’s market. However, with decreasing mortgage interest rates, there is a potential for prices to further strengthen or even increase in 2024, emphasizing the continued strength and optimism in the Wellington market. If you are ready to buy a Wellington home in 2024 call me today! I will educate you about the current market conditions and walk you through the entire process from start to finish.
Stay up to date with Wellington Florida’s real estate market updates throughout 2024 by checking out our monthly reports at Wellington Florida Monthly Market Reports.
Information provided by Beaches MLS on January 11th, 2024, and deemed reliable, but not guaranteed
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About the Author
Top Wellington Realtor, Michelle Gibson, wrote: “How Did the Wellington Real Estate Market Do In 2023”
Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell, or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you in 2021 call or e-mail her today.
Areas of service include Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.