Scarcity and Urgency are the secret sauce to our real estate market.

Remember when buyers would jump on a property as soon as it came on the market? They would even get in line to outbid other buyers for it, getting angry or sad or elated based on the outcome of their bid. Remember those days?

The reason it was like that can be traced to the colossal forces that are scarcity and urgency. There was a scarcity of homes and condos for sale, and because a lot of folks were losing out on getting one, people felt an urgency to act fast and pay whatever it took to lock in a deal. This spiral led to even greater scarcity as homes sold off faster and faster, fueling even greater urgency as people were willing to pay more money to win deals, until the music stopped – think of it like the game of musical chairs.

We saw a steep jump in prices in just a couple of years. Take a look.

Look at those steep price jumps from 2019 to 2022 and then contrast them with what is happening now.  The price of homes in Destin is actually going down (at least through the end of September).  Destin area condo prices are still up a solid +9.5%, but clearly they are slowing as well.

30A has experienced steep price jumps from 2019 to 2022 as well. And even though they are still seeing solid increases this year, prices for 30A homes have definitely slowed and it looks like 30A condos are somewhat but still very strong. 

Panama City Beach has experienced steep price jumps from 2019 to 2022. And even though they are still seeing increases this year, prices for Panama City Beach homes and condos have definitely slowed.

Looking at this data, here’s the big question that I have… Have we climbed to the top of Price Mountain and now we have to climb back down? Or… What if we aren’t at the top and are only at a plateau?  Which would mean  there is more mountain left to climb?

What do I mean by that?

There is still a lot of scarcity in the market. Take a look at the Active Listing Stats.

As you can see there is a scarcity of homes and condos for sale across the Emerald Coast.  Year over year – in all categories in all areas we are seeing fewer properties listed for sale. That’s a problem for buyers looking for price relief.

Mortgage Rates

There is also a scarcity of cheap easy to get capital – the fuel needed for high prices. The average U.S. rate for a 30-year mortgage was 7.49% on October 5, according to government-backed lender Fannie Mae.  That is the highest rate since November 2000.  

Let’s take a minute to put the rate jumps into perspective.  A borrower seeking $600,000 today would have a $4,191 house payment at current rates, up 9% from financing costs at the 6.66% rate in October 2022 (1 year ago) and up a stunning 66% from the 2.99% rate in October 2021 (2 years ago). 

And it appears the Fed is going to keep raising rates. Or at least not drop them anytime soon.

One way to describe our real estate market is that it’s coasting.

The missing ingredient right now is urgency. Because the price increases are slowing down and in some cases dropping, buyers are not feeling the full weight of FOMO – fear of missing out. Right now the penalty for waiting to buy isn’t enough to create any substantial movement to buy or wait. Likewise, there is no penalty for not selling since prices are mostly moderating. 

Buyers and sellers are coasting, waiting to see what happens. The result is a significant drop in the number of sales as buyers and sellers wait out this market. Here’s what I mean.

What does this all mean?

As long as this equilibrium of scarcity and urgency remains intact, we will be in a holding pattern. In other words, we’ll be waiting for the fog to clear to determine whether we are at the top of the price mountain or just on a plateau.

If we are indeed at the peak, expect steep price drops as the market climbs back down. This will cause some sellers, especially those that bought high in the last couple of years and may be facing rental losses, to jump into the market and do whatever it takes to sell at the highest price possible before the next drop.

In this case, seller scarcity will go away, and their urgency will rise.  Buyers will feel this shift happening and opt to wait for more properties to choose from and the lower asking prices that come with them. This is potentially good news for buyers but not so much for sellers.


The fog clears and we see that there is more price mountain to climb,  Note that there will always be climbers that will choose to keep climbing. In this case, it’s wealthy cash buyers, think about well healed baby boomers with regard to these buyers.  This is potentially good news for sellers but not so much for buyers.

What Should You Do?

If you are a long term holder, you are sitting great.  I believe there are a ton of reasons to believe in a long and profitable future: Increasing demand for Florida real estate in general and our vacation rental properties specifically.   I also believe that in the short term there are many indicators that indicate that we are in for a potentially bumpy ride over the next several years.  

If you are a short time holder (five to seven years) our advice is to sell now and mitigate the very real risk of steep price drops.  My experience has been, after steep increase in price over a short period of time like we just had, there is a steep decrease in prices as the market “corrects”.  

When that happens buyers will likely stop buying (we are seeing this now) and wait to see how low prices will go. So far we have not seen prices drop… but.  As part of the cycle, sellers who are vulnerable inevitably succumb to the pressure and sell lower than they would like.  All of this serves to push prices down further and for longer.

If you are buying to flip and grab quick cash… be very careful.

Bottom Line 

We are wealth builders, so our goal (whether you are buying or selling) is to build or protect your wealth – based on your financial goals and the current market conditions. Call us today and let’s talk about how you can max out your position as a buyer, a seller or as an owner to continue building your family’s wealth well into the future.

Committed to your success,

John Moran – CEO

The Smart Beach Investor | Keller Williams Realty AT THE BEACH TEAM We Make Real Estate Easy.

Sign Up For Latest Newsletter

3 + 14 =