Happy Monday, March 25, 2019
In today’s Market Monday, I’ll review the performance of the entire Greater Tampa housing market. The most recent data is from February 2019. The map below shows the communities included in Greater Tampa.
As you’ll see in the table below, all measures of the Greater Tampa real estate market rose compared to February 2018 and January 2019. This means more homes sold for higher prices than a year and month ago, but homes sold slower than the previous year and month.
The data above covers all types of housing, but let’s dig deeper into the sale of single-family homes. Closed Sales increased 3.6% compared to February 2018, as 2,049 SFHs sold. That was 464 fewer than in January 2019. (Just place your cursor on the trend line in the graph below to see the stats.)
The Number of Active Listings climbed 18.2% from February 2018, as 6,573 homes were for sale (134 less than in January 2019). New Listings ticked up 0.7% from February a year ago, as 2,837 homes came onto the market, 104 less than in January 2019.
The February 2019 Median Sale Price rose 2.8% from February 2018, increasing to $245,000. This was $10,000 more than in January 2019. The Average Price per Sq Foot for Sold Homes climbed 3% from February 2018 to $139/sq ft. The Median List Price climbed 4.1% year over year, rising to $249,900. Last month, it stood at $239,000. The Average List Price per Sq Foot ticked up 3.8% to $165/sq ft compared to February 2018.
Supply and Demand
The supply of single-family homes jumped by 14.7% from February 2018 to 2.69 months. In January 2019, the supply was slightly higher (2.75 months). The Absorption Rate*, which shows the rate that homes sell during a given time period, fell 12.3% from February 2018 to 0.31. This indicates the market is neutral, not favoring buyers or 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%
When the Tampa Bay Times called for responses to our survey about why people move here, nearly 300 readers responded directly to our form and about 150 gave us answers on Facebook.
While we are hesitant to say the data reflects regional trends, as 300 is a small fraction of the region’s estimated 3.1 million total residents, the answers offer an interesting story. Here are some of the highlights.
There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!
Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:
- 16% Very Poor (300-579)
- 18% Fair (580-669)
- 21% Good (670-739)
- 25% Very Good (740-799)
- 20% Exceptional (800-850)
Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,
“Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”
There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640. Veterans Affairs (VA) loans have no credit score requirement.
As you can see, none of them are above 700!
It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:As you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!
One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.
“Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”
At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!
In today’s real estate market, with more houses coming to market every day and eager buyers searching for their dream home, setting the right price for your house is one of the most important things you can do.
According to CoreLogic’s latest Home Price Index, home values have risen at over 6% a year over the past two years, but have started to slow to 4.4% over the last 12 months. By this time next year, CoreLogic predicts that home values will be 4.6% higher.
With prices slowing from their previous pace, homeowners must realize that pricing their homes a little OVER market value to leave room for negotiation will actually dramatically decrease the number of buyers who will see their listing! (see the chart below)Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be negotiating with a buyer over the price, but will instead have multiple buyers competing with each other over the house.
The key to selling your house in 2019 is making sure your house is Priced To Sell Immediately (PTSI)! That way, your home will be seen by the most buyers and will sell at a great price before more competition comes to market!
If you are debating listing your house for sale, let’s get together to discuss how to price your home appropriately for our area and maximize your exposure this Spring Market!
March 21, 2019
Mortgage rates have dipped quite dramatically since the start of the year and house prices continue to moderate, which should help on the homebuyer affordability front. The combination of improving affordability and more inventory than the last few spring selling seasons should lead to improved home sales demand.
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!
Have a Fantastic day!
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Thanks for taking time to read the Tampa Market Monthly! If you want to buy or sell a home or find out your home’s value please let us know. We’d love to work with you. You can reach me, Doug Bohannon or Dale Bohannon at 813-979-4963 or by completing this contact form. You can search all Tampa area homes for sale at www.teambohannon.com.
Have a Fantastic week!