Happy Monday, May 11, 2020
In April 2020, the New Tampa (Zip Code 33647) Single-Family Housing Market favored Sellers.
Single-Family Homes for Sale fell 32.1% from April 2019 and 7% from March 2020. Single-Family Homes Sold rose 8.8% year over year but dropped 18.7% month over month. Single-Family Homes Under Contract declined 36.5% compared to April 2019 and stayed flat compared to March 2020. The Months of Inventory based on Closed Sales was 2 months, a 38% plunge from April 2019.
The Average Sold Price per Square Footage jumped 15.9% compared to March 2020 and 24% compared to April 2019. The Median Sold Price climbed 8.6% from this March. The Average Sold Price increased 20.4% during the same time period.
Home Sales (Sold)
In April 2020, 74 homes sold in New Tampa. That was an 8.8% decline from 68 in April of 2019. It was 18.7% lower than the 91 sales in March 2020.
Current Inventory of Homes (For Sale)
In April 2020, homes for sale fell by 32.1% or 69 units compared to April of last year. Current single-family housing inventory dropped 7% compared to March of this year.
Homes Under Contract (Pending)
In April 2020, 73 homes were under contract. The same number as in March 2020. This was 36.5% lower than in April 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 April 2020 Average Sold Price per Square Footage of $160 jumped 15.9% from $138 in March 2020 and 24% from $129 in April of last year.
The Days on Market Showed 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 April 2020 of 56 days dropped 8.2% from 61 days in March 2020 and 13.8% from 65 days in April 2019.
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. April’s Sold Price vs. Original List Price of 95% ticked down 1% from March 2020 and 1% from April 2019.
The Average For Sale Price is Appreciating
The Average For Sale Price in April was $438,000, down 7% from $471,000 in April 2019 and the same as March 2020.
The Average Sold Price is Appreciating
The Average Sold Price in April was $237,000, up 13.9% from $208,000 in April 2019 and 2.2% from $232,000 in March 2020.
The Median Sold Price is Neutral
The Median Sold Price in April was $228,000, up 23.2% from $185,000 in April 2019 and 3.2% from $221,000 in
April 2020 was 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 April 2020 Months of Inventory based on Closed Sales of 2 months decreased 38% compared to April 2019 and 17.4% compared to March 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 April 2020 Absorption Rate based on Closed Sales of 50.7 increased 60.4% compared to April of last year and but decreased 12.6% compared to March 2020.
From the Blog:
Given how we have seen more unemployment claims than ever before over the past several weeks, fear is spreading widely. Some good news, however, shows that more than 4 million initial unemployment filers have likely already found a new job, especially as industries such as health care, food and grocery stores, retail, delivery, and more increase their employment opportunities. Breaking down what unemployment means for homeownership, and understanding the significant equity Americans hold today, are important parts of seeing the picture clearly when sorting through this uncertainty.
One of the biggest questions right now is whether this historic unemployment rate will initiate a new surge of foreclosures in the market. It’s a very real fear. Despite the staggering number of claims, there are actually many reasons why we won’t see a significant number of foreclosures like we did during the housing crash twelve years ago. The amount of equity homeowners have today is a leading differentiator in the current market.
Today, according to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity. That number is drastically different than it was in 2008 when the housing bubble burst. The last recession was painful, and when prices dipped, many found themselves owing more on their mortgage than what their homes were worth. Homeowners simply walked away at that point. Now, 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear. Those homes are not at risk for foreclosure (see graph below):In addition, CoreLogic notes the average equity mortgaged homes have today is $177,000. That’s a significant amount that homeowners won’t be stepping away from, even in today’s economy (see chart below):In essence, the amount of equity homeowners have today positions them to be in a much better place than they were in 2008.
The fear and uncertainty we feel right now are very real, and this is not going to be easy. We can, however, see strength in our current market through homeowner equity that was not been there in the past. That may be a bright spark to help us make it through.
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With the housing market staggered to some degree by the health crisis the country is currently facing, some potential purchasers are questioning whether home values will be impacted. The price of any item is determined by supply as well as the market’s demand for that item.
Each month the National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for the REALTORS Confidence Index.
Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand) during this pandemic.
The map below was created after asking the question: “How would you rate buyer traffic in your area?”The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 34 of the 50 U.S. states, buyer demand is now ‘strong’ and 16 of the 50 states have a ‘stable’ demand.
The index also asks: “How would you rate seller traffic in your area?”As the map above indicates, 46 states and Washington, D.C. reported ‘weak’ seller traffic, 3 states reported ‘stable’ seller traffic, and 1 state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the needs of buyers looking for homes right now.
With demand still stronger than supply, home values should not depreciate.
What are the experts saying?
Here are the thoughts of three industry experts on the subject:
“We note that inventory as a percent of households sits at the lowest level ever, something we believe will limit the overall degree of home price pressure through the year.”
“Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”
“Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand.”
Looking at these maps and listening to the experts, it seems that prices will remain stable throughout 2020. If you’re thinking about listing your home, let’s connect to discuss how you can capitalize on the somewhat surprising demand in the market now.
May 7, 2020
Mortgage rates stayed at or near record lows for the fifth straight week and homeowners are taking advantage with refinance activity remaining high. Although purchase demand declined thirty-five percent year-over-year in mid-April, demand has improved modestly over the last three weeks.
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!