Florida Market Update - May 24’

May 10, 2024 Edwin D Epperson III

Good afternoon . I trust your May is warming up and you are preparing for another fun summer break with your family and friends. Carolina and I are and we had a great "pre-summer" trip down to Colombia at the end of April through the first part of May. I'll share with you some of what made our trip great below. I'm also excited to dive into what the Florida real estate market is looking like. Everyone has been hoping (and for good reason) that rates will come down this year. As each month passes, and the real economic numbers come out (pertaining to inflation and the employment sector), it is looking less and less likely that we will see a rate cut. This may cause some heart burn for some of you, and some stress for others. But there is nothing we can do... we are simply citizens under a government that seems to have no bounds for destroying the value of our currency and the ability to not only thrive but even survive. So with out further ah-do... let me share with you a bit about our family fun trip!

We arrived in Bogota mid April. Spent a day there getting ourselves oriented to the elevation difference, and we waited to link up with Carolinas Mother, Brother, his girlfriend and our nephew, Pablo Javier. Pablo is the light of everyone in the family, especially Carolina and her mother. This boy is gonna be spoiled, hahaha!

We traveled to a great little AirBnB up in the mountains about 1 hr North of Bogota. Great design, we are already thinking of ways to invest in Colombia! Brand new construction, 4/Br 3/Ba, over 2000+ sqft for around $200,000.... now thats a DEAL!

We then headed back to Carolinas home town of Villavicencio, S.E. of Bogota, on the easter side of the Andes Mountains. Javier, Carolinas brother had to work (of course) as well I did some work too. Technology is incredible, and I was able to speak with new investors to our customizable Debt and Equity Fund, Blue Bay Fund I, as well we closed two loans and onboarded 3 more during my time down there.

We also were able to find and attend a Reformed Church right there in Villavicencio! We absolutely fell in love with the local church family, and we are already committing to supporting the mission outreach they are doing in a small village.

Carolina and I always have an open-handed invitation for anyone who wants to join us on one of our trips. If your interested we will let you know the next time we are headed down to Colombia and what the purpose of that specific trip will be, whether visiting locations, or helping out with the missions. If you have ever wanted to travel to Colombia lets us know we would greatly appreciate having people we know and enjoy spending time with join us on a trip.

Alright, now that the fun travel information has been shared, lets dive into what the Florida market has been doing since my last report in April. Are we seeing severe cooling yet? Are there locations where the prices are continuing to increase? Guess you will have to read and find out!

I also wanted to make everyone aware, including my capital partners, real estate investors, and even my brokers, that legislation was passed in 2023 and 2024 that could have ripple effects on the economy here in FL. I've hyperlinked a great article written by the CRC Group Wholesale and Specialty HERE. In short, in the wake of the Champlain Towers in Surfside, FL, collapse that cost the lives of 98 residents on June 24, 2021, the Florida legislature passed Senate Bill 4-D in 2022, which resolved structural and financial issues. In June 2023, they passed a follow-up bill, SB-154, named a "glitch bill". This addressed several issues with D-4, which clarified Senate Bill D-4: Milestone Structural Inspections, Reserve Requirement, and Questionnaire for Condo Associations and Insurers. I would STRONGLY encourage my interested readers to see how this bill could affect the Condo landscape, especially high-rises. I will be honest, this is one of the many reasons I never have and probably never will allow condo investments within my fund (sorry condo flippers). The risks outweigh the rewards, and I would imagine that in the coming years, especially as buildings age out, there could be a "gutting" of the condo market here in FL. I hope I am wrong; only time will tell.MAY 2024 FLORIDA MARKET REPORT 204 FLORIDA MARKET REPORT

MAY 2024 FLORIDA SFR MARKET REPORT

FLORIDA SINGLE-FAMILY RESIDENCE MONTHLY INVENTORY

MONTHLY INVENTORY

This data is based on spot data for a specific time period and market. It is a measure for Active Listings for current month divided by Sold + Expired listings from prior month. This data is a RAW Score report, reflecting the actual numerical value for that particular Metropolitan Statistical Area "MSA". Raw scores do not rank or compare a market’s score against any other market; multiple markets could have the same or similar raw scores.

The Heat Map Key to the left indicates what the corresponding MSA colors mean. Red equals very few months of inventory, <1, while pink equals the most months of inventory, >8.

Thankfully it seems that most of the market has stabilized over the first quarter of 2024. The Panhandle is still slow averaging above 4 months of inventory, along with the Southwest Florida market. However, as I wrote in last months newsletter, this could simply be the time of the year. Summer tends to be a pretty hot time for Florida so we will see. Even if it does "heat-up" and we start seeing a decrease in inventory, I would not expect to see Florida head back into the sub- two months of inventory range.

FLORIDA SINGLE-FAMILY RESIDENCE DAYS ON MARKET

DAYS ON MARKET

This data is based on spot data for a specific time period and market. The Days On Market metric is the median number of days between a property’s listing and when it is noted as ‘sold’ or ‘off the market'. This data is a RAW Score report, reflecting the actual numerical value for that particular Metropolitan Statistical Area "MSA". Raw scores do not rank or compare a market’s score against any other market; multiple markets could have the same or similar raw scores.

The Heat Map Key to the left indicates what the corresponding MSA colors mean. Red equals very few days on the market, <45, while pink equals the most days on the market, >180.

Well, Tallahassee MSA is screaming hot right now and seems to be holding that sub-45 DOM. Great job, all you Tallahassee investors! In March, we actually saw a dip, with the average DOM falling below 2 months. It could be assumed that this was the first of Spring Breakers who also decided to snatch up properties in our big, beautiful state! As the school year is winding down, I would very much expect to see DOM MAYBE come down... to mid 50 days, however I could be surprised and we may see a rock star year here in Florida once again. Of course you should expect that we will be staying on top of the market and providing insight as we see it.

FLORIDA SINGLE-FAMILY RESIDENCE AVERAGE LISTING PRICE

AVERAGE LIST PRICE

This data is based on spot data for a specific time period and market. The Average List Price metric is the average price of all properties listed during the month. This data is a RAW Score report, reflecting the actual numerical value for that particular Metropolitan Statistical Area "MSA". Raw scores do not rank or compare a market’s score against any other market; multiple markets could have the same or similar raw scores.

The Heat Map Key to the left indicates what the corresponding MSA colors mean. Red equals very inexpensive properties, <$200K, while pink equals luxury properties, >$800K.

This is good news, REALLY good news, especially for incoming or "nest-leaving" Florida residents. The housing prices have changed SO much; it's actually mind-boggling. Want to see proof? Let's take a look at the FL MSA average listing price from April 2020 compared to today, April 2024. Below, you will see the two heat maps. I'll highlight some of the most drastically changed average listing prices. Remember this is JUST the listing price, not sold or adjusted price points or any other metric. Yet it's clear the evidence points to extreme appreciation (can we say inflation-driven?) over the last 4 years. Click on the photo below to see some of the MSAs with the biggest changes.

FLORIDA SINGLE-FAMILY RESIDENCE HOT MARKET FINDER

In this metric, we will explore the “Hot Markets” in Florida. We will take a look at all 24 MSA, how they compare in the current quarter, how they did last quarter, and how they did last year during the same quarter. The MSAs are arranged from top to bottom based on the Current Period and the Master Score (RAW). The first will be Miami/ Miami Beach/ Kendall MSA, with a Master Score (RAW) of 58. However, what you will notice is that ALL MSAs have dropped when compared to other MSAs throughout the entire United States; Tallahassee has the least dropped, with only -15 Master Score Change. Be aware that this is a nationwide indicator and not necessarily indicative of how we may perceive things here on the ground. Below is a brief description of the columns, what they mean, and what period they are below.

CURRENT PERIOD

Master Score (RAW)

The “RAW Master Score” is a proprietary algorithm combining the TAPSSTAR and other indicators into a single score. This is the best single indicator (if you only want to look at ONE scoring element). A high score (in the green) indicates a market in a strong phase of its long-term real estate cycle.

Master Score Change

The Master Score Change from the prior year can be used to identify possible early stages of emerging or falling markets. Unlike the other indicators, which convert raw scores into 'percentile rankings', this indicator uses the 'raw score, which makes it easier to gauge the magnitude of the change from the prior year. To help identify the biggest movers, we've highlighted in green those markets whose raw score increased more than 20 points or in red if it declined more than 15 points in the most recent year.

Master Score Rank

The "Master Score" is a proprietary algorithm combining the TAPSSTAR and other indicators into a single score. This is the best single indicator (if you only want to look at ONE scoring element). Note that percentile rankings are useful for measuring RELATIVE performance BETWEEN markets. not for measuring the absolute performance. Use these percentile scores in conjunction with the TAPSSTAR and Wealth Phase indicators.

PRIOR PERIOD

Master Score Rank

YEAR AGO

Master Score Rank

The "Master Score" is a proprietary algorithm that combines the TAPSSTAR and other indicators into a single score. This is the best single indicator (if you only want to look at ONE scoring element). Note that percentile rankings are useful for measuring relative performance between markets, not absolute performance. Use these percentile scores in conjunction with the TAPSSTAR and Wealth Phase indicators.

This wraps up my May Florida Market Report. I trust it was engaging and informative. If you found this monthly Florida Market Report valuable, please share it on your social media and with your friends. Life is always better with friends! Well, I must take leave; my board of advisors and I are getting together for our quarterly meeting. I’m looking forward to providing Blue Bay Fund updates and what the future holds for those in my investor club!

With Honor,

Edwin D Epperson III,
Manager& CEO
- Soli Deo Gloria

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