February 2019 Real Estate Update
How is the Tampa Bay Market Changing and How Does is Affect Buyers and Sellers?
- Interest rates were rising last year, then started to come down by the end of 2018. While rates constantly fluctuate, the Fed has stated that it does not anticipate further rate hikes this year. This is very welcome news!
- The last few years have seen rapidly increasing home value gains of over 10%/year. The Greater Tampa Area had a much higher median home value increase of 16.7% from Feb 2016 through Feb 2017.
- While median home values continue to increase, they’re increasing at a much slower pace. Feb 2019 median values increased only 3.1% from the year before; that’s a far cry from the 16.7% increase from Feb 2016 – Feb 2017.
- Homes are taking longer to sell. Median days on the market to contract has INCREASED 35.3% in the Greater Tampa Area to 46 days and 42.4% in Hillsborough County to 47 days. However, these are still historically few days to contract representative of a very robust market.
- Home inventory has increased 11.5% over last year, but despite the increase, 2.9 months of inventory still falls far shy of a traditionally balanced market of 6 months. That is positive for demand.
What does this mean for sellers?
- Your home has gained equity and it is still an excellent time to sell.
- It will take longer to sell than it may have during the frantic pace of the last several years, but you should price to sell as quickly as possible as days on market embolden buyers and make homes seem less desirable.
- Buyers have more (but not too much) inventory to choose from.
- Pricing high has the opposite effect of what many sellers would believe, because fewer buyers will go to see the home. Pricing strategically brings far more buyers, increases a sense of urgency and is more likely to bring competition among buyers, thus driving up the final purchase price.
What does this mean for buyers?
- Historically low interest rates will help you buy more house for less monthly cost. This is a tremendous advantage that will help your pocket for years to come!
- Increased inventory is helpful as there are more listings to choose from.
- Although the 11.5% increase in inventory homes for sale is helpful, it is still low which brings high demand and competition. Having your financing solidly in order is crucial. You may submit a better offer than another buyer, but if you don’t have a pre-approval letter and proof that your credit worthiness has been verified, you won’t get the contract.
- Be aware that some sellers will be priced strategically to bring more offers. Your offer should be based on market value and competition; not on list price. For example: A house may be worth $250k and valuable to you for condition, location, schools, etc. One agent may price the house at $275k, another agent may price the house at $245k. There is a psychological difference in the pricing strategy, but it is still the same house, same value. Work with a trusted Realtor® who can educate you on the market and make your offers accordingly.
Keep your eye on the market with a free direct MLS portal with the most up-to-date listing information. No pressure or obligation. Many people just like to have the inside scoop, even if they won’t be in the market to buy for a very long time.
Check out the market update from Greater Tampa Realtors consulting economist, Elliot Eisenberg, Ph.D.