Even if you’re unaware of it, the beach real estate market is stuck. Glenn S. Phillips, CEO of Beach Homes Realty, explains what this means and what’s next for beach real estate.
- Unofficial Recession. Beach real estate is in an unofficial recession. This is true for all primary residential housing, not just beach homes. 2024 saw the lowest number of homes sold in almost 30 years. Transactions are happening, just not as quickly as people want.
- Inventory Has Grown. More homes for sale may seem like a good sign. However, while inventory is growing, there’s still demand, meaning the inventory isn’t selling. This creates a phantom inventory issue.
- “Phantom Inventory.” Increased inventory makes for great headlines, but it isn’t a good sign if nobody is buying. This phantom inventory with aspirational pricing is what’s increasing.
- Aspirational List Prices. Sometimes, sellers list at an extra premium price to see if they can get that dream price. These lottery ticket properties fill the market and create “phantom” inventory.
- Prudent Buyers. Buyers want beach homes but are somewhat uncomfortable with the economy and realize the market is at peak pricing. Buyers don’t have to buy these properties, so they can wait until prices drop.
- Next: No Boom, No Bust. In the next year or so, we’ll start to see more transactions for beach homes. Additionally, aspirational sellers will get a little more practical and bring prices down. Prudent buyers may also become more impatient, evening out the market. There won’t be an explosion of transactions or a drastic price decrease. Aspirational sellers and prudent buyers will start to meet in the middle.
The beach real estate market will start to get a little unstuck as we head into 2025. Buyers and sellers must be ready to make transactions when the time comes. Visit beach-homes.com to connect with expert beach agents ready to help you navigate the beach real estate market.