Happy Monday, September 17, 2018
In August 2018, 4.8% fewer single-family homes were listed for sale in New Tampa than in August of 2017. Compared to July 2018, listings fell 10.5%. The number of homes that sold fell 6.4% year over year and 8.1% month over month. The number of under contract listings jumped 9% compared to last month and 29.8% compared to last year. The Months of Inventory, which measure the available supply of homes for sale, came in at 2.3 months, the same as in 2017.
The Average Sold Price per Square Footage fell 4.6% compared to July 2018, but climbed 1.6% compared to August 2017. The Median Sold Price (the price above which half the homes sold for) rose by 0.3% from last month, while the Average Sold Price decreased 4.2% compared to July 2018. Based on the 6-month trend, the Average Sold Price and the Median Sold Price trend is “Neutral.”
The Average Days on Market showed a neutral trend, increasing 27.7% compared to August 2017. The ratio of Sold Price vs. Original List Price was 95%, 1% lower than last year.
Home Sales (Sold)
In August 2018, 102 homes sold, 6.4% less than the 109 that sold in August of 2017 and 8.1% lower than the 111 sales in July 2018.
Current Inventory of Homes (For Sale)
The total number of homes for sale fell by 12 units or 4.8% compared to a year ago and 10.5% compared to a month ago.
Property Under Contract (Pended)
Homes under contract (pending) increased by 9% compared to last month and 29.8% compared to last year.
The Average Sold Price per Square Footage indicates the direction of property values. In August 2018, the Average Sold Price per Square Footage was $125, down from $131 in July 2018 and 1.6% from $127 in August 2017.
The Days on Market Shows Neutral Trend
The average Days on Market (DOM) shows how many days, on average, homes stay on the market before they sell. If this measure trends upward it indicates a move towards more of a Buyer’s market, but if it trends downward it indicates a move towards more of a Seller’s market. The DOM for August 2018 was 60, up 20% from 50 days last month and up 27.7% from 47 days in August of last year.
The Sold/Original List Price Ratio Remains Steady
The Sold Price vs. Original List Price shows the average amount that sellers are decreasing 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 held fell 2.1% to 95% compared to last month. It was also down 1% from last August.
The Average For Sale Price is Neutral*
The Average For Sale Price in August of $450,000 increased 1.5% from $457,000 in August of 2017. It ticked up 0.9% from $446,000 in July 2018.
The Average Sold Price is Neutral*
The Average Sold Price in August of $342,000 rose 0.9% from $339,000 in August of 2017. It fell 4.2% from $357,000 last month.
The Median Sold Price is Neutral*
The Median Sold Price in July was $332,000, up 8.9% from $305,000 in August of 2017 and 3.1% from $331,000 in July 2018.
*Based on 6-month trend
It’s 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 August 2018 Months of Inventory of 2.3 months was the same as last year and down 4.2% compared to last month.
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 August 2018 Absorption Rate was 42.9%. This was a 1.6% decrease compared to August 2017 and 2.9% increase compared to July 2018.
If you bought or sold a house in Tampa Bay last year, you were a player in one of Florida’s hottest real estate markets.
Even though prices eased a bit from their torrid pace in 2016, the median cost of a single family home shot up 11 percent. That’s more than in Orlando, Jacksonville and a big swath of South Florida from Miami to West Palm Beach. And it’s more than for the state as a whole.
“Tampa Bay is a really strong market in terms of price appreciation,” said Cheryl Young, senior economist for the online real estate site Trulia. She predicts prices will climb another 7 percent this year if newcomers continue to pour into the area, job growth remains strong and unemployment stays below the national average.
For Tampa Bay overall in 2017, the median price of a house hit $220,000, the highest in at least a decade. But a breakdown of sales by ZIP Code shows that several of the most active ZIPs had median prices that were considerably lower. That indicates affordability continued to be a key factor for many buyers.
From the Blog:
Between 1987 and 1999, which is often referred to as the ‘Pre-Bubble Period,’ home prices grew at an average of 3.6% according to the Home Price Expectation Survey.
Every month, the economists at CoreLogic release the results of their Home Price Insights Report, which includes the actual year-over-year change in prices across the country and their predictions for the following year.
The chart below shows the forecasted year-over-year prices for 2018 (predictions made in 2017). According to their predictions, the average appreciation over the course of 2018 should be 4.8%, which is still greater than the ‘normal’ appreciation of 3.6%.
If we layer in the actual price appreciation that has occurred this year, we can see that over the course of 2018, home prices have appreciated by an average of 6.9% and have outpaced projections all year!
What does this mean?
The tale of today’s real estate market is one of low inventory, high demand, and rising prices. The forces at work can be simply explained with the theory of supply and demand. That being said, if a large supply of inventory were to come to the market, prices may start to appreciate closer to the forecasted rate which would STILL be greater than the historic norm!
If you are a homeowner whose house no longer meets your needs, now may be a great time to list your home and capitalize on the equity you have gained over the last year to make a significant down payment on your next home!
Keri Weishaar lives in a spacious, four-bedroom house near Tampa, Florida, thanks to the easy financing that prevailed during last decade’s housing boom.
“It was basically nothing to get into this house,” said Weishaar, 48, who bought the house in the spring of 2003 after obtaining a no-money down, adjustable-rate mortgage.
Then again, Weishaar and her husband are fortunate to still have their home. That same mortgage eventually morphed into a financial albatross and, for a time, the house in the suburb of Tarpon Springs was on a countdown to foreclosure.
As home values plummeted after the housing bubble burst in 2007, many borrowers with exotic types of loans were stuck, unable to refinance as lenders began to tighten their lending criteria. That set the stage for cascading mortgage defaults that eventually took down Lehman Brothers, Wall Street’s fourth-biggest investment bank at the time, 10 years ago this week. Lehman and other financial institutions were big buyers of securities backed by some of these dicey mortgages.
Today, getting a mortgage is tougher — and less risky. For one thing, no-money down mortgages and their ilk, which enabled many borrowers to initially lower the costs of buying a home but often saddled borrowers with far higher balances or steep monthly payment increases, have vanished.
Banks also remain a bit gun-shy after racking up billions in losses stemming from mortgages gone bad. That means homebuyers, especially those with less-than-stellar credit, face more hurdles qualifying for a mortgage than they did in the housing boom years. But the loans are safer, more transparent and actually take into account whether a borrower can afford to keep up with payments.
“The banks have certainly loosened underwriting criteria for low-risk borrowers; they haven’t loosened underwriting criteria for low-credit score borrowers,” said Aaron Terrazas, senior economist at Zillow. “The types of lending that we saw leading up to that crash in 2008, for the most part, we’re not seeing nowadays.”
Selling your home, even for the most organized person, is a stressful experience. There are things to be repaired, rooms to be cleaned, and often children and pets that don’t understand all of the increased activity. And to top it all off, you have to open up your home to complete strangers who are going to walk through every part of your personal space.
Luckily, one of the many benefits of using a REALTOR is the peace of mind knowing that through their expertise and available technologies, you can rest at ease, assured that your family and your personal property are safe during the home selling process.
Following are a few safety considerations for sellers.
September 13, 2018
The one-two punch of strong job and consumer credit growth drove mortgage rates up to their highest mark since August 2.
Mortgage rates are currently 0.82 percent higher than a year ago, which is the biggest year-over-year increase since May 2014. Looking ahead, annualized comparisons for mortgage applications may look weaker than they appear, but that’s primarily because of the large spread between mortgage rates now and last September, which was when they reached their low for the year.
Overall, this spectacular stretch of solid job gains and low unemployment should help keep homebuyer interest elevated. However, mortgage rates will likely also move up, as the Federal Reserve considers short-term rate hikes this month and at future meetings.
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!