Happy Monday, August 17, 2020
In July 2020, the Hillsborough County single-family housing market favored sellers.
Single-Family Homes For Sale fell 47% from July 2019 and 11% from June 2020. Single-Family Homes Sold jumped 7.1% year over year and 6.5% month over month. Single-Family Homes Under Contract rose 5.4% compared to June 2020 and 20.9% compared to July 2019.
The Months of Inventory based on Closed Sales came in at 1 day, a drop of 53.3% from the previous July.
The Average Sold Price per Square Footage increased 1.8% compared to June of this year and 10.6% compared to July of last year. The Median Sold Price climbed 5.1% from June 2020. The Average Sold Price rose 4% during the same time period.
The Average Days on Market stayed flat compared to July 2019. The ratio of Sold Price vs. Original List Price of 97% increased 1% compared to July of last year.
Home Sales (Sold)
In July 2020, 2169 single-family homes sold in Hillsborough County. That was 7.1% higher than the 2025 sold in July 2019 and 6.5% higher than the 2036 sales in June 2020.
Current Inventory of Homes (For Sale)
In July 2020, 1963 or 47% fewer single-family homes were for sale than in July 2019. July inventory fell 11% compared to June 2020.
Homes Under Contract (Pending)
In July 2020, 5.4% more single-family homes were under contract than in June of this year. Pending single-family homes jumped 20.9% compared to July of last year.
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 2020 Average Sold Price per Square Footage of $167 rose 1.8% from $164 in June 2020 and 10.6% from $151 in July of last year.
The Days The Average 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 2020 of 52 days fell 3.7% from 54 days in June 2020. It stayed the same as July 2019.
The Sold/Original List Price is 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. July’s Sold Price vs. Original List Price of 97% ticked up 1% from this June and from July of last year.
The Average For Sale Price is Appreciating
The Average For Sale Price in July was $602,000, up 25.2% from $481,000 in July 2019 and 4.7% from $575,000 last month.
The Average Sold Price is Appreciating
The Average Sold Price in July was $367,000, up 14.3% from $321,000 in July 2019 and 4% from $353,000 in July 2020.
The Median Sold Price is Appreciating
The Median Sold Price in July was $289,000, up 11.2% from $260,000 in July 2019 and 5.1% from $275,000 in June 2020.
July 2020 was a Seller’s 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
The July 2020 Months of Inventory based on Closed Sales of 1 month decreased 53.3% compared to July 2019 and 16.4% compared to June 2020.
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 2020 Absorption Rate based on Closed Sales of 98 leaped 102.1% compared to July 2019 and 19.8% compared to June 2o2o.
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Today, home prices are appreciating. When we hear prices are going up, it’s normal to think a home will cost more as the trend continues. The way the housing market is positioned today, however, low mortgage rates are actually making homes more affordable, even as prices rise. Here’s why.
According to the Mortgage Monitor Report from Black Knight:
“While home prices have risen for 97 consecutive months, July’s record-low mortgage rates have made purchasing the average-priced home the most affordable it’s been since 2016.”
How is that possible?
Black Knight continues to explain:
“As of mid-July, it required 19.8% of the median monthly income to make the mortgage payment on the average-priced home purchase, assuming a 20% down payment and a 30-year mortgage. That was more than 5% below the average of 25% from 1995-2003.
This means it currently requires a $1,071 monthly payment to purchase the average-priced home, which is down 6% from the same time last year, despite the average home increasing in value by more than $12,000 during that same time period.
In fact, buying power is now up 10% year-over-year, meaning the average home buyer can afford nearly $32,000 more home than they could at the same time last year, while keeping their monthly payment the same.”
This is great news for the many buyers who were unable to purchase last year, or earlier in the spring due to the slowdown from the pandemic. By waiting a little longer, they can now afford 10% more home than they could have a year ago while keeping their monthly mortgage payment unchanged.
With mortgage rates hitting all-time lows eight times this year, it’s now less expensive to borrow money, making homes significantly more affordable over the lifetime of your loan. Mark Fleming, Chief Economist at First American, shares what low mortgage rates mean for affordability:
“In July, house-buying power got a big boost as the 30-year, fixed mortgage rate made history by moving below three percent. That drop in the mortgage rate from 3.23 percent in May to 2.98 percent in July increased house-buying power by nearly $15,000.”
The map below shows the last time homes were this affordable by state:In six states – Arkansas, Iowa, Kentucky, Louisiana, Maryland, and West Virginia – homes have not been this affordable in more than 25 years.
If you’re thinking of making a move, now is a great time to take advantage of the affordability that comes with such low mortgage rates. Whether you’re thinking of purchasing your first home or moving into a new one and securing a significantly lower mortgage rate than you may have on your current house, let’s connect today to determine your next steps in the process.
Today’s housing market is making a truly impressive turnaround, and it’s also setting up some outstanding opportunities for buyers and sellers. Whether you’re thinking of buying or selling a home this year, there are perks today that are rarely available, and definitely worth looking into. Here are the top two.
The Biggest Perk for Buyers: Low Mortgage Rates
The most impressive buyer incentive today is the average mortgage interest rate. Just last week, mortgage rates hit an all-time low for the eighth time this year. The 30-year fixed-rate is now averaging 2.88%, the lowest rate in the survey’s history, which dates back to 1971 (See graph below):This is a huge advantage for buyers. To put it in perspective, it means that today you can get a lower rate than any of the past two generations of homebuyers in your family if you decide to purchase at this time.
In addition, the National Mortgage News notes how today’s buyers have increasing purchasing power due to these low mortgage rates:
“Purchasing power rose 10% year-over-year…With interest rates hitting record lows, buyers were able to afford $32,000 “more house” as of July 23 than they could the year before with the same monthly payment.”
This is a great perk for buyers who are hoping to potentially get more for their money in a home, something many are considering today as they re-evaluate the amount of space they ideally need for their families. It is an opportunity not seen in 50 years, and one not to be missed if the time is right for you to buy a home.
The Biggest Perk for Sellers: Low Inventory
“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million).”
The red bars in the graph below indicate that the inventory of homes coming into the market continues to decline. It was low as we entered the pandemic and has reduced even further this year. Houses today are selling faster than they’re being listed, and that’s creating an even greater supply shortage (See graph below):The lack of inventory has been a challenging situation for a while now, and with low mortgage rates fueling buyer demand, inventory is even harder for buyers to find today. Buyers are eager to purchase, and because of the shortage of homes available, they’re encountering more bidding wars. This is one of the factors keeping home prices strong, an advantage for sellers. Lawrence Yun, Chief Economist for NAR notes that this trend may continue, too:
“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
With low inventory and high buyer demand, homeowners can potentially earn an increasing profit on their houses and sell them quickly in this sizzling summer market.
Whether you’re thinking about buying or selling at home, there are some key perks available right now. Let’s connect today to discuss how they may play to your advantage in our local market.
August 13, 2020
Homebuyer demand remains strong, especially for those in search of an entry-level home where the improvement in affordability via lower mortgage rates has a material impact. Even with this week’s uptick, very low rates are providing a significant boost to the housing market that continues to hold up well during this time of uncertainty.
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!