Happy Monday, February 26, 2018
As the month of February comes to a close, I want to take a big-picture look at how the Tampa housing market has fared so far in 2018. So let’s look at Greater Tampa, which consists of all the places listed below.
As you’ll see in the chart below, Total Sold Dollar Volume, Median Sold Price, Average Sold Price and Average Price per Sq Foot rose compared to January 2017 (YoY), while the Number of Sales and Days on the Market fell. On a month-to-month (MoM) basis (or December 2017 compared to January 2018), the picture was a bit different. Total Sold Dollar Volume and Closed Sales both fell over 30%, while prices declined too. As a result of fewer sales, the time it took for homes to sell climbed around 4%.
Now the data above applies to all types of housing, but I want to dig a little deeper into the sale of single-family homes. As you’ll see in the chart below, Closed Sales were off 2.9% compared to January 2017, as 1,597 SFHs sold. (Just place your cursor on the bars in the graph to see the stats.) On a MoM basis, the number of sales dropped 34.5%, 2,440 homes sold in December 2017.
The Number of Active Listings was down 3.8% from January a year ago, as 5,574 homes were for sale. But, there were 110 more homes on the market than in December 2017. In fact, 3,012 New Listings came on the market in January 2018, 11.6% more than in January 2017.
As you would expect, fewer sales typically mean prices will drop somewhat. And that’s what we saw in January of 2018, as the Median Sales Price (the price of half of the homes on the market) decreased to $230.000. This was a drop of 8.2% from January of 2017. The Median List Price fell about the same (8%) to $236,390. However, the Average Price per Sq Foot rose 3.3% compared to January a year ago.
Supply and Demand
The supply of homes continued its downward move compared to last January, as the measure fell 9.2% to 2.36 months. The Average Days on the Market, which shows how fast homes are selling dropped to 26 days, which was 7.1% lower than January 2017.
While the Number of Closed Sales in Greater Tampa housing market cooled a bit from December 2017 to January 2018, Supply is still far below Demand. The lack of homes for sale continues to slow sales, but with interest rates expected to keep rising through the year, plenty of buyers will want to buy now since their purchasing power is its peak. This dynamic presents prospective sellers with a prime opportunity to list and sell their homes quickly and at an optimum price.
Now here are some of the most helpful and interesting blog posts, articles, and infographics we’ve seen this week. Enjoy!
The Tampa Bay area’s population, already the largest of any metropolitan area in the state, is projected to grow from 3 million last year to 3.1 million this year, and to 3.3 million over the next five years.
That growth is expected to bring corresponding increases in two areas of the local economy, according to a new forecast from market researchers at the real estate firm Cushman & Wakefield.
The average home value is expected to reach $224,760 this year, compared with the state average of $267,510. Analysts are looking for the bay area’s retail sales to grow from $64.6 billion last year to $68.3 billion this year.
From the Blog:
We all realize that the best time to sell anything is when demand for that item is high, and the supply of that item is limited. Two major reports released by the National Association of Realtors (NAR) revealed information that suggests that now is a great time to sell your house.
REALTORS® CONFIDENCE INDEX
Every month, NAR surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions.” This month, the index showed (again) that homebuying demand continued to outpace the supply of homes available in January.
The map below illustrates buyer demand broken down by state (the darker your state, the stronger demand there is).
Since mid-2016, there has been marginal easing in every aspect of mortgage loans, said Jonathan Corr, chief executive of Ellie Mae in Pleasanton, California.
“We’ve seen a very slight drop in the credit scores of approved loans, a slight increase in the debt-to-income ratios and an increase in loan-to-value, which means people are taking advantage of low down-payment loan programs,” Corr said.
In spite of the existence of low down-payment loans and down-payment assistance programs, a NeighborWorks America survey in 2017 found that, on average, consumers think that 17 percent is the minimum required down payment to own a home. Yet loans with zero, 3 or 3.5 percent minimum down payments are readily available now.
In some cases, unsubstantiated concern might be stopping people from even applying for a loan. According to the recent Ellie Mae Borrower Insights Survey, 29 percent of renters think a 700 to 749 credit score is needed to qualify for a loan. But lender guidelines say a minimum credit score of just 620 is required for many loan programs. Some lenders will approve loans with a lower credit score if the borrower has substantial resources or other compensating factors.
The average credit score of a closed loan was 722 in the Ellie Mae Originations Insight Report in December. Although 82 percent of conventional loans had credit scores of 700 or higher, 13.6 percent had credit scores between 650 and 699, and 4.7 percent had scores below 650. Federal Housing Administration (FHA) loans were almost evenly split among borrowers with a credit score of 700 or above (34 percent), between 650 and 700 (35 percent) and under 650 (31 percent).
If you sold your home at a good price, you’d be thrilled, right? But what if, a year or two later, you check in on your old home by idly punching your former address into realtor.com … and discover that its value has shot up even higher? In other words, had you only held onto this property a little longer, you could have made a real killing?
Welcome to home seller’s remorse—a rampant affliction among home sellers across the country. It can hit at any point after a home sale, where, akin to tossing a winning lottery ticket, home sellers torture themselves with fears that they’ve sold their home too soon, thus losing out on tens of thousands of dollars. Home seller’s remorse can even kick in before a sale, stressing out homeowners who are thinking of selling but are worrying that they could be pulling the trigger too early … and missing out on the windfall their home could become.
Sound painfully familiar? In the strong seller’s market we have now, where prices are rising across the country, it’s understandable.
“Sellers tend to think that if they just wait a little longer, they can sell for more,” says Boris Sharapan Fabrikant, a real estate agent at Triplemint in New York. (Of course, he adds, the same is true of buyers: “They tend to think they could have bought for less earlier.”)
Yet real estate experts insist that home sellers should stop second-guessing themselves and make peace with when they sell, and for how much. Here are some reasons you should never worry whether you’re selling your home too soon.
Fixed mortgage rates increased for the seventh consecutive week, with the 30-year fixed mortgage rate reaching 4.40 percent in this week’s survey; the highest since April of 2014. Mortgage rates have followed U.S. Treasurys higher in anticipation of higher rates of inflation and further monetary tightening by the Federal Reserve. Following the close of our survey, the release of the FOMC minutes for February 21, 2018 sent the 10-year Treasury above 2.9 percent. If those increases stick, we will likely see mortgage rates continue to trend higher.
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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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!