Happy Tuesday, May 28, 2019
Due to the celebration of Memorial Day on Monday we’re publishing Market Monday today. Before, we get started I wanted to take a few moments to remember all those who gave their lives while serving our country. Thank you for your service.
Below is a map of all the communities that make up the Greater Tampa housing market.
As you’ll see in the table that follows, all measures of the Greater Tampa real estate market climbed compared to April 2018 except for Median Sold Price. A month-over-month comparison showed that Total Sold Dollar Volume, Closed Sales, Average Sold Price and Average Price per Sq Foot rose, while Median Sold Price, Median and Average Days on the Market fell. So more homes sold for higher average prices than a year and month ago. Homes sold slower on a year-over-year basis, but faster on a month-over-month basis.
The data above covers all types of housing, but let’s review single-family homes. Closed Sales increased 10.5% compared to April 2018, as 2,682 SFHs sold. That was 148 fewer than in March 2019. (Just place your cursor on the trend line in the graph below to see the stats.)
The Number of Active Listings jumped 9% from April 2018, as 6,140 homes were for sale (291 less than in March 2019). New Listings ticked up 0.3% from April a year ago, as 3,215 homes came onto the market, 58 less than in March 2019.
The April 2019 Median Sale Price dropped 0.6% from April 2018, decreasing to $240,545. This was $1,455 lower than in March 2019. The Average Price per Sq Foot for Sold Homes climbed 2.9% from April 2018 to $142/sq ft. The Median List Price held steady at $245,000, the same as April 2018. In March 2019, it stood at $245,460. The Average List Price per Sq Foot increased 1.8% to $168/sq ft compared to April 2018.
Supply and Demand
The supply of single-family homes climbed by 5.3% from April 2018 to 2.49 months. In March 2019, the supply was 19.5% higher (2.89 months). The Absorption Rate*, which shows the rate that homes sell during a given time period, rose 1.4% from April 2018 to 0.44. This means 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%
As the Tampa Bay area continues to flourish, it may play an ever more significant role in shaping the future of the entire state of Florida.
Long viewed elsewhere as the “other” economic hub after tourist-rich Orlando and international South Florida, it turns out the Tampa Bay area has done an exceptional job of positioning itself for strength — even as Florida’s other economic powerhouses flirt with trouble should something go wrong.
The bright picture for Tampa Bay is revealed in Project Sunrise, a detailed economic study by the Florida Council of 100. The report identifies areas of strength and vulnerability for Florida’s economy, and it effectively charts a course for Florida to be a true global force for many years to come.
To do so, the state must overcome its historic reliance on tourism and growth-fueled construction. Those two sectors have been key to Florida’s success, but just over a decade ago we learned how soft that success can be in the face of a recession — to say nothing of hurricanes.
While the economy in certain parts of the state has been even more robust since the recovery, they have done so largely on the basis of Florida’s traditional economic drivers. But the Tampa Bay region, according to the Council of 100, has established a more diversified economy that can withstand a major storm, economic or natural. WalletHub just named Tampa the No. 5 best large city in America to start a business, and St. Petersburg No. 14.
The report recommends a greater concentration on “tradeable” sectors, which are areas of the economy that sell goods or services that can be easily exported. According to the Project Sunrise report, our communities should continue to see strong growth across such foundational sectors as health care, information technology, wholesale trade, professional services and company management.
Still, there is much to be done to establish a regional and state economy that can truly weather whatever comes. Despite strong population growth, Tampa’s gross domestic product grew at just half the national rate, due to low and declining productivity. And the area needs to increase its number of college graduates, in order to have sufficient talent for the knowledge economy.
The Project Sunrise report offers specific recommendations to bolster the Bay area’s economy, including:
• Leverage the existing university and college system to increase the output of high-caliber talent, working with the region’s educational institutions to better align their degree programs with the current and future needs of the region’s employers.
• Increase the labor force participation rate by creating career pathways for unemployed and under-employed residents.
• Create incentives to retain talented workers in the region.
There is more, and Project Sunrise is not intended to be one of those studies that sits on a shelf — it is a realistic assessment of Florida’s, and the Tampa Bay area’s, strengths and weaknesses. It shows that even regions like ours have much work ahead to prepare for a future that is closer than you might think. Community leaders and citizens should see the report and take steps now to prepare the Tampa Bay region for the brightest possible economic future.
Rhea Law is of counsel with the law firm of Buchanan, Ingersoll & Rooney. A member and former chair of the Florida Council of 100, the fifth-generation Floridian is passionate about the success of the state. Actively involved in public policy, civic, and charitable work, she holds leadership positions with numerous Florida-based organizations, including the Tampa Bay Partnership, Greater Tampa Chamber of Commerce, Stetson University College of Law and others.
From the Blog
According to CoreLogic, from 2006 to 2014 “there were 7.3 million housing foreclosures and 1.9 million short sales.” The hesitation some Americans feel after experiencing a foreclosure brings to mind the old saying: “Fool me once- shame on you. Fool me twice- shame on me.”
According to the 2019 Home Buyer Report from NerdWallet,
“Thirteen percent of Americans have lost a home due to a financial event such as foreclosure in the past 10 years. More than 6 in 10 of them (61%) have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again.”
This makes sense. They don’t want to go through the same pain again. As a cornerstone of the American dream, nobody wants to lose homeownership. But let’s illustrate this simply: Recall learning to ride your first bike during your childhood. Did you stop riding it because you fell on the ground and scraped your knees? Or did you get back on and try again until you were able to ride without falling?
Purchasing a home is not as simple as learning to ride a bike, but the concept is the same! There are many things necessary to learn that affect the ability to get the financing needed to purchase a home. Past occurrences can determine if there is a waiting period. In other words, you need to let your knees heal before you try again!
As we’ve mentioned in the past, homeownership has many financial and non-financial benefits. Each person needs to go over the pros and cons, taking the time to figure out what is best for their family. Should they continue renting, or should they try to buy again?
The good news is that some “boomerang buyers” are getting back into the market. They’re getting back on their bike!
“Of 2.8 million former homeowners whose foreclosures, short sales or bankruptcies dropped off their credit reports from January 2016 to November 2018, 11.5% have obtained a new mortgage, according to a study by credit rating agency Experian for USA Today.”
NerdWallet’s report also mentioned:
- 6% plan to buy a house this year.
- 39% intend to buy over the next 3 years.
- 58% say they will purchase within 5 years.
If you lost a home due to a financial event but would like to review your options, let’s get together to help you create a plan to obtain a home in the future!
In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly.
In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal.
Every month, the Home Price Perception Index (HPPI) measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.
Over the last five months, the gap between the homeowner’s opinion and the bank’s appraisal has widened to -0.78%. This is important for homeowners to note, as even a 0.78% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home).
The chart below illustrates the changes in home price estimates over the last 12 months.
While the appraisal gap widens, another trend is also becoming more common.
According to realtor.com, “the share of homes which had their prices cut increased by 2% compared to last year”. Thirty-seven out of the 50 largest US housing markets saw an increase in overall price reductions.
In today’s market, you need an expert agent who can help price your house right from the start. Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the house. In reality, nothing is wrong- the price was just too high!
If you are planning on selling your house in today’s market, let’s get together to set your listing price properly from the start!
May 23, 2019
Mortgage rates fell for the fourth consecutive week and continued the medium-term trend of lower rates since late 2018. The drop in mortgage rates is causing purchase demand to rise and the mix of demand is skewing to the higher end as more affluent consumers are typically more responsive to declines in rates.
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!