Happy Tuesday, August 20, 2019
In July 2019, the Hillsborough County housing market favored Sellers!
Homes for Sale declined 2.7% from July 2018 and 0.9% from June 2019. Homes Sold rose 1.6% year over year but fell 4.4% month over month. Homes Under Contact climbed 6.7% compared to June of this year and 11.4% compared to July of last year.
The Months of Inventory based on Closed Sales dropped 4.6% from July 2018 to 2.1 months.
The Average Sold Price per Square Footage decreased 3.2% compared to June 2019 but increased 2.7% compared to July 2018. The Median Sold Price fell 1.1% from June 2019. The Average Sold Price declined 3.6% from June of this year. The Average Days on Market increased 8.3% compared to July 2018. The ratio of Sold Price vs. Original List Price held steady from July of last year at 96%.
Home Sales (Sold)
In July 2019, Home Sales rose 1.6% (year-over-year) but fell 4.4% (month-over-month) to 2020.
Current Inventory of Homes (For Sale)
In July 2019, Homes for Sale declined to 116 units or 2.7% fewer than last July. For Sale Listings dropped 0.9% compared to June of this year.
Property Under Contract (Pending)
In July 2019, Homes Under Contract increased 6.7% with 2177 homes pending. In June, there were 2040 homes under contract. Homes Under Contract rose 1.4% compared to July 2018.
The Average Sold Price per Square Foot shows the direction of home prices. Median Sold Price and Average Sold Price can sometimes be skewed by outliers that sell for a really high or low price. So the Average Sold Price per Square Footage is a more normalized indicator of home values. The July 2019 Average Sold Price per Square Footage of $151 dropped 3.2% from $156 in June 2019. It was up 2.7% from $147 in July 2018.
The Days on Market Shows Downward Trend
The average Days on Market (DOM) shows how many days the average property is on the market before it sells. An upward trend in DOM trends to indicate a move towards more of a Buyer’s market, a downward trend indicates a move towards more of a Seller’s market. The DOM for July 2019 of 52 days stayed flat compared to June of this year. It climbed 8.3% from 48 days in July of 2018.
The Sold/Original List Price Ratio Remains Steady
The Sold Price vs. Original List Price reveals the average amount that sellers are agreeing to come down from their original list price. The lower the ratio is below 100% the more of a Buyer’s market exists, a ratio at or above 100% indicates more of a Seller’s market. This month Sold Price vs. Original List Price of 96% stayed the same as June 2019 and July 2018. The Average For Sale Price is Neutral
The Average For Sale Price in July was $481,000, up 6.4% from $452,000 in July 2018 and 0.2% from $480,000 in June 2019.
The Average Sold Price is Appreciating
The Average Sold Price in July was $321,000, up 3.2% from $311,000 in July of 2018 and down 3.6% from $333,000 in June 2019.
The Median Sold Price is Appreciating
The Median Sold Price in July was $260,000, up 2% from $255,000 in July of 2018 and down 1.1% from $263,000 in June 2019.
A comparatively lower Months of Inventory benefits sellers while a higher Months of Inventory favors buyers.
*Buyer’s market: more than 6 months of inventory
Seller’s market: less than 3 months of inventory
Neutral market: 3 – 6 months of inventory
Months of Inventory based on Closed Sales
The July 2019 Months of Inventory based on Closed Sales of 2.1 months decreased by 4.6% compared to July 2018. It increased 5% compared to June 2019.
Absorption Rate measures what percentage of the current active listings are being absorbed each month.
*Buyer’s market: 16.67% and below
Seller’s market: 33.33% and above
Neutral market: 16.67% – 33.33%
Absorption Rate based on Closed Sales
The July 2019 Absorption Rate based on Closed Sales of 48.4 climbed 4.5% compared to July 2018. It fell 3.4% compared June of this year.
The Orlando and Tampa Bay areas rank No. 2 and No. 4 as hot spots nationwide for new commercial real estate development. That’s according to EDR Insight, a Connecticut based company that tracks the due diligence performed by developers wanting to know environmental conditions affecting property before they buy. Due diligence activity rose 16 percent in Orlando and 15 percent in Tampa Bay in 2018 at a time when overall U.S. activity was flat.
“As the real estate recovery continues, investors and developers are looking more closely at Tampa and Orlando, where there are more opportunities to make acquisitions at reasonable prices,” Diane Crocker, EDR Insight’s principal analyst, said in a story in the August Issue of Florida Realtor magazine.”
Both Florida markets still have tracts of land suitable for residential development, and that drives interest in commercial assets, including retail and office properties.”
Infographic of the Week
Over the last couple of years, we’ve heard quite a bit about rising home prices. Today, expert projections still forecast continued growth, just at a slower pace. One of the often-overlooked benefits of rising home prices is the positive impact they have on home equity. Let’s break down three ways this is a win for homeowners.
1. Move-Up Opportunity
With the rise in prices, homeowners naturally experience an increase in home equity. According to the Homeowner Equity Insights from CoreLogic,
“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”
This increase in profit means if homeowners decide to sell, they’ll be able to put their equity to work for them as they make plans to move up into their next home.
2. Gain in Seller’s Profit
ATTOM Data Solutions recently released their Q2 2019 Home Sales Report, indicating the seller’s profit jumped at one of the fastest rates since 2015. They said:
“A look at the national numbers showed that U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since the original purchase of $67,500…the average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of the original purchase price.”
Looking at the amount paid when they bought their homes, and then the amount they received after selling, we can see that some homeowners were able to walk away with a significant gain.
3. Out of a Negative Equity Situation
Negative equity occurs when there is a decline in home value, an increase in mortgage debt, or both. Many families experienced these challenges over the last decade. According to the same report from CoreLogic,
“U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase by a total of nearly $485.7 billion since the first quarter 2018, an increase of 5.6%, year over year.
In the first quarter of 2019, the total number of mortgaged residential properties with negative equity decreased…to 2.2 million homes, or 4.1% of all mortgaged properties.”
The good news is, many families have moved beyond a negative equity situation, and no longer owe more on their mortgage than the value of their home.
If you’re a current homeowner, you may have more equity than you realize. Your equity can open the door to future opportunities, such as moving up to your dream home. Let’s get together to discuss your options and start to put your equity to work for you.
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August 15, 2019
The sound and fury of the financial markets continue to warn of an impending recession, however, the silver lining is mortgage demand reached a three-year high this week. The decline in mortgage rates over the last month is causing a spike in refinancing activity – as homeowners currently have $2 trillion in conventional mortgage loans that are in the money – which will help support consumer balance sheets and increase household cash flow. On top of that, purchase demand is up seven percent from a year ago.
Thanks for reading Tampa Market Monday. We’d love to help you buy or sell your home, so please get in touch! You can reach me, Doug Bohannon or Dale Bohannon at 813-979-4963 or by completing this contact form.
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!