Happy Monday, October 19, 2020
The Hillsborough County Single-Family Housing Market Favored Sellers in September 2020!
Summary of Key Stats Year over Year (YoY) and Month over Month (MoM):
More Detailed Analysis and Commentary
Home Sales (Sold)
In September 2020, 1859 single-family homes sold in Hillsborough County, 10.6% more than the 1681 sold in September 2019. It was 6.5% lower than the 1989 sales in August 2020.
Current Inventory of Homes (For Sale)
In September 2020, 2133 fewer single-family homes were listed for sale than in September of last year, a 50.7% drop. September’s current inventory rose 1.5% compared to August of this year.
Homes Under Contract (Pending)
In September 2020, 1950 single-family homes were under contract, a decrease of 0.4% compared to August 2020 and an increase of 19.4% compared to September 2019.
The Average Sold Price per Square Footage indicates which direction 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. The September 2020 Average Sold Price per Square Footage of $167 fell 1.2% from $169 in August 2020. It jumped 10.6% from $151 in September 2019.
The Days on Market Shows a Downward 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 September 2020 of 44 days declined 6.4% from 47 days in August of this year and 13.7% from 51 days in September of last year.
The Sold/Original List Price Ratio is Rising
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. September’s Sold Price vs. Original List Price of 97% stayed the same as August 2020. It ticked down 1% from September 2019.
The Average For Sale Price is Appreciating
The Average For Sale Price in September was $620,000, up 30.5% from $475,000 in September 2019 and 0.3% from $618,000 in August 2020.
The Average Sold Price is Neutral
The Average Sold Price in September was $365,000, up 17% from $312,000 in September 2019 and 0.3% from $364,000 in August 2020.
The Median Sold Price is Appreciating
The Median Sold Price in September was $292,000, up 14.5% from $255,000 in September 2019 and the same as August 2020.
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 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 September 2020 Absorption Rate based on Closed Sales of 89.5 leaped 124.2% compared to September 2019. It declined 7.9% compared to August of this year.
Video of the Week
From the Blog
Many industries have been devastated by the economic shutdown caused by the COVID-19 virus. Real estate is not one of them.
Mark Fleming, Chief Economist for First American, just reported:
“Since hitting a low point during the initial stages of the pandemic, the only major industry to display immunity to the economic impacts of the coronavirus is the housing market. Housing has experienced a strong V-shaped recovery and is now exceeding pre-pandemic levels.”
Buyer demand is still strong heading into the fall. ShowingTime, which tracks the average number of buyer showings on residential properties, just announced that buyer showings are up 61.9% compared to the same time last year. They went on to say:
“Normally, real estate activity begins to slow down in the late summer, but this year it peaked in July, August and into September.”
There Is One Big Challenge
Purchaser demand is so high, the market is running out of available homes for sale. Just last week, realtor.com reported:
“Since the beginning of the COVID pandemic in March, nearly 400,000 fewer homes have been listed compared to last year, leaving a gaping hole in the U.S. housing inventory.”
The National Association of Realtors (NAR) revealed that, while home sales are skyrocketing, the inventory of existing homes for sale is dropping dramatically. Below is a graph of existing inventory (September numbers are not yet available):Homebuilders are increasing construction, but they cannot keep up with the high demand. Bill McBride, founder of the Calculated Risk blog, in discussing inventory of newly constructed houses, notes:
“The months of supply decreased to 3.3 months…This is the all-time record low months of supply.”
What does this mean for sellers?
Anyone thinking of putting their home on the market should not wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today.
Next year, when the pandemic is hopefully behind us, there will be many more properties coming to the market. Don’t wait for that increase in competition in your neighborhood. Now is the time to sell.
Let’s connect today to get your house on the market at this optimal time to sell.
Click the graphic above to visit www.teambohannon.com
One of the biggest misconceptions for first-time homebuyers is how much you’ll need to save for a down payment. Contrary to popular belief, you don’t always have to put 20% down to buy a house. Here’s how it breaks down.
A recent survey by Point2Homes mentions that 74% of millennials (ages 25-40) say they’re interested in purchasing a home over the next 12 months. The study notes, “88% say they have significantly less savings than the average national down payment amount, which is $62,600.”
Thankfully, $62,600 is not the amount every buyer needs for a down payment in the United States. There are many different options available, especially for first-time homebuyers (millennial or not). That amount can also be significantly less, depending on the purchase price of the house.
According to the National Association of Realtors (NAR), “The median existing-home price for all housing types in August was $310,600.” (These are the latest numbers available). NAR also indicates that:
“In 2019, the median down payment was 12 percent for all buyers, six percent for first-time buyers, and 16 percent for repeat buyers.” (See graph below):
That means if a qualified first-time buyer purchases a home at today’s median price, $310,600, with a 6% down payment, in reality, the down payment only amounts to $18,636. That’s nowhere near $62,600.
Knowing there are also programs like FHA where the down payment can be as low as 3.5% of the purchase price for a first-time buyer, that up-front cost could be significantly less – as little as $10,871 for the same home noted above. There are also other programs like USDA and loans for Veterans that waive down payment requirements.
The Point2Homes study also shares how much millennials have indicated they’ve saved for a down payment. As we can see in the graph below, 39% have already saved enough for a down payment on a median-priced home. Another 47% are close to reaching that goal, depending on the purchase price of the home.Unfortunately, the lack of knowledge about the homebuying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important to contact a local real estate professional to understand the requirements in your local area if you want to buy a home. A trusted agent and your lender can guide you through the process.
Be careful not to let big myths about homebuying keep you and your family out of the housing market. Let’s connect to discuss your options today.
October 15, 2020
Low mortgage rates have become a regular occurrence in the current environment. As we hit yet another record low, the tenth record this year, many people are benefitting as refinance activity remains strong. However, it’s important to remember that not all people are able to take advantage of low rates given the effects of the pandemic.
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.