Buyers Now Have More Negotiating Power
If you purchased a home or condo in Central Florida over the last two years, you may have run into a bit of competition, but buyers' negotiating power is coming back. After the Covid lockdowns, there was a steep rise in demand for vacation properties on or near the beach, and the Daytona Beach area real estate market quickly shifted in favor of sellers. When a new home listing in Port Orange or a desirable oceanfront condo in Daytona Beach Shores came to market, there was often a ton of interest, with dozens of showings, and in many cases, multiple offers. Escalation clauses were common, with bidding wars bringing contract prices well above listing prices, and some buyers even opted to forgo inspections or waive the appraisal in order to make their offer contingency-free and more desirable. Buyers had very little negotiating power if they truly wanted a property, and some even paused their search in frustration with the market. But things are changing quickly.
As we discussed in our quarterly market update, 2023 has seen the number of home and condo sales decrease across the Daytona Beach area, while the inventory of properties listed for sale is rising rapidly. So with this shift in the market, we are already seeing the return of contingencies, with longer inspection periods and some offers contingent upon the sale of other properties. Another aspect of negotiating power that is returning to buyers is the ability to ask that the seller contribute toward closing costs or an interest rate buydown. The higher interest rates, coupled with stubbornly high average sale prices, have made homes and condos less affordable this year, so the qualified and serious buyers are being much more selective, and in turn, are receiving closing cost assistance on nearly ⅓ of closed sales. Serious sellers should also take note, and work with a professional real estate advisor to outline the best strategy for a sale in this changing market. If you have questions about contingencies, negotiating power, or where you stand as a buyer or seller, we are ready to help Contact us today!