Happy Monday, February 18, 2019
In January 2019, the number of single-family homes for sale rose 21.9% from January 2018 and 2% from December 2018. The number of homes sold fell 3% year over year and 23.1% month over month. The number of homes under contract climbed 59.8% compared to the previous month and 16% compared to last January. The Months of Inventory stood at 4.3 months, an increase of 26.4% from January 2018.
The Average Sold Price per Square Foot declined 2.7% compared to December 2018 but ticked up 0.7% compared to January 2019. The Median Sold Price decreased by 4% from December 2018. The Average Sold Price dropped 4.6% from last month.
The Average Days on Market showed an upward trend, falling 1.7% compared to January 2019. The Ratio of Sold Price vs. Original List Price came in at 94%, the same as January 2019.
Home Sales (Sold)
In January 2019, 1,068 homes sold in Hillsborough County. That’s 3% fewer than the 1,101 sold in January of 2018 and 23.1% fewer than the 1,388 sales in December.
Current Inventory of Homes (For Sale)
In January 2019, 823 or 21.9% more homes were listed for sale than in December 2018. The current inventory of homes for sale is 2% higher than December.
Property Under Contract (Pended)
In January 2019, 1,794 or 59.8% more homes were under contract than in December 2018. That was also 16% higher than in January of last year.
The Average Sold Price per Square Foot shows which way home prices are headed. 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. In January 2019, the Average Sold Price per Square Foot of $143 declined 2.7% from $147 last month but rose 0.7% from $142 in January 2018.
The Days on Market Shows Upward Trend
The Average Days on Market (DOM) shows how many days the average home is on the market before it sells. An upward trend in DOM indicates 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 January 2019 was 59 days, up 5.4% from 56 days in December and down 1.7% from 60 days in January of last year.
The Sold/Original List Price Ratio Remains Steady
The Sold Price vs. Original List Price reveals the average amount that sellers are agreeing to decrease 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. In January 2019, This month Sold Price vs. Original List Price of 94% dropped 1.1% from last month and was the same as January 2019.
The Average For Sale Price is Neutral
The Average For Sale Price in January 2019 was $427,000, down 2.5% from
$438,000 in January of 2018 and up 3.4% from $413,000 last month.
The Average Sold Price is Neutral
The Average Sold Price in January was $290,000, down 0.7% from $292,000 in January of 2018 and down 4.6% from $304,000 December.
The Median Sold Price is Neutral
The Median Sold Price in January was $238,000, up 2.1% from $233,000 in January of 2018 and down 4% from $248,000 last month.
January was a Neutral Market*
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
In January 2019, the Months of Inventory increased 26.4% from January 2018 to 4.3 months. This was 34.1% higher than in December.
*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 January 2019 Absorption Rate came in at 23.3, a 20.8% decrease compared to last January and a 24.9% drop compared to last month.
TAMPA — In 2008, Bob Buckhorn, then a private citizen, despaired of Tampa’s lowly rank among the nation’s real estate markets. The city had been ravaged by the financial crash, young people were leaving and almost no one saw it as a good place to invest.
“I’m tired of losing our kids to Charlotte,” he complained at that year’s Urban Land Institute conference on real estate trends. “I’m tired of being a second-tier city.”
On Wednesday, Buckhorn’s tone was far different as he addressed the 2019 conference, this time as mayor.
“We’re not a second-tier city, but a city competing on the international stage,” he said, voice booming. “There is a swagger about this city that has never existed.”
Buckhorn wasn’t the only speaker to extol the virtues of Tampa and the entire Tampa Bay area. For the first time, the area has been named one of the nation’s top 10 markets for real estate investors, joining not just Charlotte but also Austin, Raleigh and Nashville.
Strong job growth, tax law changes and an increasingly youthful population are among the factors making the Tampa Bay area far more attractive to investors than it was a decade ago, 500 conference attendees were told. And while the U.S. economy shows signs of slowing, the bay area is an enviable position.
“By historical standards, we’re late in this expansion, but Tampa (Bay) started so far back I think it’s early in its expansion,” said Mitchell Roschelle, a partner in PwC and co-author of the 2019 Emerging Trends in Real Estate Report. “The tailwinds are far stronger than any headwinds that would come. You have a lot more room to run.”
Roschelle was especially laudatory of Tampa’s redevelopment, including of its long-neglected waterfont. (The conference was held at Armature Works, a one-time streetcar depot turned hip food hall on the Hillsborough River.)
“The story of Tampa is really quite remarkable but not surprising,” he said. “You had the vision to take the waterfront and do something with it. You have a live-work-play that’s the envy of other cities.”
In St. Petersburg, revitalization of the downtown waterfront and nearby areas is drawing developers like Red Apple Group, whose planned condo-and-hotel tower on Central Avenue will be the company’s first project outside New York. Robert Zorn, a Red Apple executive, said the company decided to look beyond its home turf because new limits on mortgage and property tax deductions could prompt more northerners to move to low-tax states like Florida.
“We believe that when people in my neck of the woods do their tax returns, that’s going to accelerate the trend of affluent people saying, ‘Maybe there’s a better way,’ ” said Zorn, who lives in New York. “We’re looking to capitalize on that trend.”
Some other nuggets from the conference:
• The four most-common amenities that employers provide to their workers are full-service cafeterias, showers, fitness centers and custom coffee. Zorn cautioned against getting too carried away with amenities: “I went in a place with a climbing wall and nobody used it.”
• The growth of e-commerce is creating a need for more warehouses. Office buildings also need more storage space. People don’t want things delivered to their homes while they’re gone, “so they’re having them sent to the office,” Roschelle said.
• Real Estate Investment Trusts, or REITS, have helped revolutionize the real estate business by enabling individuals to buy shares in real estate portfolios that receive income from hotels, apartment complexes and other commercial properties. “REITS to me are the biggest game-changer,” Roschelle said. “You can invest as an individual investor (along) with the biggest institutional investors.”
Study after study shows that no matter what generation Americans belong to, the vast majority believe that homeownership is an important part of their American Dream. The benefits of homeownership can be broken into two main categories: financial and non-financial (often referred to as emotional or social reasons.)
For Americans approaching retirement age, one of the greatest benefits to homeownership is the added net worth they have been able to achieve simply by paying their mortgage!
The Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65. Their study revealed that the difference in net worth between homeowners and renters at this age group was actually 47.5 times greater, with nearly half their net worth coming from home equity!
Homeowners over the age of 65 are much more financially prepared for retirement and often own their homes outright if they were fortunate enough to purchase their homes before the age of 36.
Their 30 years of mortgage payments have paid off as they gained equity through their monthly payments and as home values appreciated.
It is no surprise that lifelong renters have had a hard time accruing net worth as the latest Census report shows that the Median Asking Rent has been climbing consistently over the last 30 years.
Your monthly mortgage payment is a form of ‘forced savings’ building your net worth with every payment!
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If your plan for 2019 includes selling your home, you will want to pay attention to where experts believe home values are headed. According to the latest Home Price Index from CoreLogic, home prices increased by 4.7% over the course of 2018.
The map below shows the results of the latest index by state.
Real estate is local. Each state appreciates at different levels. The majority of the country saw at least a 2.0% gain in home values, while some residents in North Dakota and Louisiana may have felt prices slow slightly.
This effect will be short lived. In the same report, CoreLogic forecasts that every state in the Union will experience at least 2.0% appreciation, with the majority of the country gaining at least 4.0%! The prediction for the country comes in at 4.6%. For a median-priced home, that translates to over $14,000 in additional equity next year! (The map below shows the forecast by state.)
So, how does this help you list your home for the best price?
Armed with the knowledge of how much experts believe your house will appreciate this year, you will be able to set an appropriate price for your listing from the start. If homes like yours are appreciating at 4.0%, you won’t want to list your home for more than that amount!
One of the biggest mistakes homeowners make is pricing their homes too high and reducing the price later when they do not get any offers. This can lead buyers to believe that there may be something wrong with the home, when in fact the price was just too high for the market.
Pricing your home right from the start is one of the most challenging parts of selling your home. Once you decide to list your house, let’s get together to discuss where home values are headed in your area!
February 14, 2019
The combination of cooling inflation and slower global economic growth led mortgage rates to drift down to the lowest levels in a year. While housing activity has clearly softened over the last nine months and the lingering effects of higher rates from last year are still being felt, lower mortgage rates and a strong job market should rekindle demand for the spring homebuying season.
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 New Year!
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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!