Happy Monday July 27, 2020
Today, we’ll take a look at how the Greater Tampa housing market (includes the communities in the map below) performed in June 2020.
As you’ll see in the table that follows, all metrics increased compared to June 2019 expect for Median and Average Days on the Market. Compared to May 2020, Total Sold Dollar Volume, Closed Sales, Average Sold Price and Average Price per Square Foot rose, while Median Sold Price and Average Days on the Market fell. Median Days on the Market stayed flat.
The data above includes all types of Greater Tampa housing, but let’s dig deeper into the data for single-family homes. In June 2020, Closed Sales climbed 6.3% compared to June 2019, as 3,095 SFHs sold. That was 896 more homes sold than in May 2020. (Just place your cursor on the trend line in the graph below to see the stats.)
The Number of Active Listings declined to 4,111, a 34.3% drop from June of last year. It was 824 fewer homes than listed for sale in May 2020. New Listings fell 9.8% from June 2019, as 2,938 homes came onto the market, 27 fewer than in May 2020.
The June 2020 Median Sale Price rose 5.8% to $269,800 compared to June 2019. It was $800 higher than in May 2020. The Average Price per Sq Foot for Sold Homes rose 5.4% from June 2019 to $156/sq ft. The Median List Price increased 5.2% to $273,590 compared to June 2019. The Average List Price per Sq Foot climbed 10.1% to $185/sq ft compared to June of last year.
Supply and Demand
The supply of single-family homes plunged 35% from June 2019 to 1.64 months. The Absorption Rate*, which shows the rate that homes sell during a given time period, leaped 61.9% from June 2019 to 0.75.
Currently, the Greater Tampa single-family housing market favors sellers.
*Absorption rate is calculated by dividing the number of sales in a given month by the number of available homes for sale. For example, if there are 100 homes listed for sale in a certain area, and 20 sold during the last month, the absorption rate is 20/100 = .20 or 20%.
*Buyer’s market: 16.67% and below
Seller’s market: 33.33% and above
Neutral market: 16.67% – 33.33%
The residential real estate market is remaining resilient as the country still struggles to beat the COVID-19 pandemic. Three separate reports recently revealed how the housing market is still showing growth. Here’s a look at each one.
1. Ivy Zelman’s Real Estate Broker Survey
The survey explains that purchaser demand remains strong:
“This month’s overall homebuyer demand rating…was easily the strongest sequential gain in our survey history…Strength continues to be led by the entry-level…While high-end demand is less robust in an absolute sense, there has also been relative improvement, with contacts attributing incremental improvement to the stock market’s rebound, record low mortgage rates and luxury customers trading out of high-priced cities.”
2. The National Association of Home Builders Housing Market Index
The index reveals that builder confidence has returned to levels last seen prior to the pandemic:
“In a strong signal that the housing market is ready to lead a post-COVID economic recovery, builder confidence in the market for newly-built single-family homes jumped 14 points to 72 in July, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI now stands at the solid pre-pandemic reading in March before the outbreak affected much of the nation.”
3. The realtor.com Housing Market Recovery Index
This index leverages a weighted average of four key components of the housing industry, tracking each of the following:
- Housing Demand – Growth in online search activity
- Home Price – Growth in asking prices
- Housing Supply – Growth of new listings
- Pace of Sales – Difference in time-on-market
It then compares the current status “to the last week of January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.”
The latest results came in at 101, with realtor.com explaining:
“The U.S. Housing Market has recovered from the immediate disruption caused by the COVID pandemic and returned to January 2020 growth levels.”
Real estate brokers, home builders, and industry data all agree that the housing market has surged back to pre-COVID levels, showing growth, strength, and incredible resilience.
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With a worldwide health crisis that drove a pause in the economy this year, the housing market was greatly impacted. Many have been eagerly awaiting some bright signs of a recovery. Based on the latest Existing Home Sales Report from the National Association of Realtors (NAR), June hit a much-anticipated record-setting rebound to ignite that spark.
According to NAR, home sales jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June:
“Existing-home sales rebounded at a record pace in June, showing strong signs of a market turnaround after three straight months of sales declines caused by the ongoing pandemic…Each of the four major regions achieved month-over-month growth.”
“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown…This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
With mortgage rates hitting an all-time low, dropping below 3% for the first time last week, potential homebuyers are poised to continue taking advantage of this historic opportunity to buy. This fierce competition among buyers is contributing to home price increases as well, as more buyers are finding themselves in bidding wars in this environment. The report also notes:
“The median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.”
“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
Buyers returning to the market is a great sign for the economy, as housing is still leading the way toward a recovery. If you’re ready to buy a home this year, let’s connect to make sure you have the best possible guide with you each step of the way.
July 23, 2020
While housing demand continues to rebound, the month-long swoon in economic activity has caused the 10-year Treasury benchmark to drop. In the short-term, this means the demand will continue on the back of near record low mortgage rates. However, the most recent consumer spending data has been pointing to slow growth since mid-June. The concern is that the pause in economic activity will cause unemployment to remain elevated which will lead to longer-term labor market distress.
Thanks for reading Tampa Market Monday. If you want help buying or selling your home, please get in touch. We have sold over 5,000 homes in the Tampa area and our mission is “to elevate the practice of real estate to an art form — and to deliver a real estate experience that is re-imagined and extraordinary!
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