Delray Beach Real Estate Market Forecast 2023

The Delray Beach real estate market has seen its fair share of excitement over the past few years. Yet the homebuying frenzy spurred by low mortgage rates in 2020 and 2021 has mostly settled down, bringing the local market back to more of its pre-pandemic equilibrium.

A couple of years ago, hot properties in Delray Beach were selling in a manner of days, but sales movement has slowed a bit. The Florida market reports indicate that the percentage of closed sales statewide dipped by 18% from 2021 to 2022. Additionally, a side-by-side analysis of the first quarters of 2023 and 2022 reveals a 22% decrease in closed sales for the entirety of the Sunshine State.

The population of Delray Beach continues to increase slightly year over year. From April 2020 to July 2022, it increased by 0.3%, representing the addition of over 1,000 new residents from incoming migration. This slow but steady demand for housing means that new construction isn’t particularly favorable for builders at this time, especially considering there is ample stock of resale homes to meet demand.

Moderately-sized homes in Delray Beach will likely experience a relative increase in value compared to the largest homes for the remainder of the calendar year. This is because mortgage rates reached historic lows a couple of years ago, and with a movement toward remote work, large homes in “vacation destinations” such as the Florida coast temporarily became more accessible. But now that borrowing rates have skewed higher and remote work is less prevalent, larger homes will likely stay on the market for longer compared to more moderately sized (and priced) single-family houses.

The overall consensus on mortgage rates is that they will likely fall slightly lower by year’s end, so it’s possible that the tides might change in the Delray Beach real estate market. Lower rates could encourage quicker property sales at all levels of housing stock and could bring the larger homes into greater demand once again.

Property taxes in Delray Beach are quite low compared to many metropolitan areas, at $6.67 for every $1,000 of assessed value. Sales taxes are a bit higher than the national average at 7%. The overall cost of living in the area is anticipated to rise slightly over the year.

All parts of the Delray Beach area are likely to be in demand for the rest of the year; however, certain areas will probably have peaks in interest.

Waterfront areas continue to be in demand year-round. However, it’s anticipated that waterfront sales will dip slightly during the summer and rise again around October when the weather cools in the Northeast, as out-of-towners look for properties to escape the cold and enjoy marine life.

Delray Beach offers multiple waterfront areas, each with its own individual feel. Properties located directly on the open ocean are typically incredibly high-caliber in size and price. As mentioned earlier, these properties will likely take longer to sell than they might have two or three years ago.

Properties adjacent to the Intracoastal waterway are usually a bit more modest in size and scope than those further east, and it’s anticipated that the sales pace for these homes will remain steady throughout the year. Residents near the waterway enjoy easy access to the open ocean through the Boca or Boynton inlets in the Intracoastal locations.

For those searching for water views with more of an entry-level price tag, options along the canals and many lakes will continue to prove popular. Like the other waterfront properties, it’s anticipated that these properties will pick up a more serious interest in the later autumn months.

Many people treasure the opportunity to eat out or see a live performance. As we head into the second half of 2023, interest in the walkable downtown area will likely continue to grow, and prices here will remain stable or rise slightly. Currently, downtown home prices range from $450,000 to $6 million.

Since the early 2000s, downtown Delray Beach has been on the upswing. During that period, the city was awarded the prestigious “All-American City” award for the actions of its citizen groups who worked actively against neighborhood deterioration. Downtown Delray Beach has become a hub of activity with numerous shops and eateries along the tree-lined streets. The famed Atlantic Avenue continues to be a major draw, with residents taking advantage of the opportunity to stroll easily from one attractive shop to the next.

The downtown area features a blend of home types, including newer homes and stunning mid-century masterpieces. The large majority of downtown homes have been renovated to include attractive updated kitchens and hard floors. Additionally, many properties are under HOA jurisdiction, meaning the exteriors are well-maintained and pristine, including the landscaping. All of this adds up to the fact that the property values will remain high downtown.

Travel to Florida continues to grow, and investment properties have the potential for short-term or even “long short-term” rentals. Small apartments in the area are currently listed on the Airbnb website for $250 to $400 a night, meaning that there is potential to net anywhere from $1,000 to $8,000 or more monthly in relatively passive income from one small property, depending on the popularity of your listing.

If you’re looking for your ideal investment property or primary residence, reach out to The South Ocean Group. We’ll take the time to answer any of your questions about the area.