May was a busy month in the Tampa Bay real estate market. With home sales up and inventory down the market is healthy but facing the same challenges it has been for the past couple of years. Even so, over $1.6 billion of residential real estate was sold in Hillsborough, Pasco, and Pinellas combined, and 7,334 new listings were introduced to the market. Homes sold for 98.2% of their list price (meaning if the average home was listed at $250,000 it sold for $245,500).
In May, the total number of residential home sales combined in Hillsborough, Pasco, and Pinellas counties was 6,457 - an increase both year-over-year and month-over-month, up an overwhelming 20.5% from April and 4.2% from May 2017. Hillsborough county had 2,646 of those sales, Pasco had 1,432, and Pinellas had 2,379. Considering we saw a decrease in both month-over-month and year-over-year sales in April, it is nice to see that there were quite a few sales in May to make up for the previous month's decrease.
In the tri-county area, the average home price dropped 2.1% month-over-month but rose year-over-year by 3.9% The average sales price was $281,616 in Hillsborough, $207,900 in Pasco, $288,886 in Pinellas, and $259,467 overall. Both Pasco and Pinellas saw decreases in average sales price while Hillsborough had an increase, though the decrease in Pinellas pricing was small. The overall decrease in average price in the Tampa Bay area can be attributed to Pasco county's average price decreasing month-over-month by $25,000. On a month-to-month basis it is sometimes difficult to see the overall pricing trend. Currently, many people are speculating that the market will "correct itself" and they, therefore, expect a drop in housing prices. However, a real estate market correction involves the overall pricing trend increasing only slightly, versus substantially, and those hoping to see a "bubble burst" leading to prices dropping will most likely be disappointed. Looking at the monthly statistics indicates we are in a healthy real estate market, not one headed for collapse, so do not wait to purchase because you think prices are going to go down, as it is unlikely they will.
In May 2018, the median time homes were on the market before going under contract was 23 days, which was the same in both April 2018 and May 2017. As has been the case for the past few years, homes that are priced right are moving quickly as there are plenty of buyers ready to purchase. Naturally, homes that are overpriced sit longer and require either price drops or contract negotiations, as even though it is a seller's market, homes that do not appraise for the asking price are rarely purchased above market value.
While the amount of inventory currently available is still about only two months (defining this as a strong seller's market), the recent expansion of down payment assistance programs has made it an opportune time for first time buyers to purchase. Currently there is an option to put down only 3% and also get $7,500 towards your down payment and/or closing costs, meaning a $200,000 home could be purchased with as little as $8,5000 out of pocket. Buyers can utilize gift money from family or friends as well as qualified withdrawals from a retirement account to help fund their down payment.
Additionally, while mortgage rates have fluctuated this month, the average rate is currently hovering around the mid 4% (4.56% on May 31st according to FreddieMac.com). While this was a small drop from the middle of May when it was closer to 4.7%, the general trend since the beginning of the year has been that mortgage rates are increasing, and in comparison to a year ago when rates were below 4%, it is clear that rates are going up.
Whether you are thinking of buying or selling, now is the time as the hot sellers market makes it ideal for current home owners to list, and the still-low interest rates and small down payment requirements have made it more affordable than ever before to purchase a home.
Remember, real estate is hyper-local and what's happening in your neighborhood could dramatically differ from someone else's. If you're looking for a customized analysis of your home's current value or help in deciding whether it's the right time for you to buy in your dream community, contact me directly and I'd be happy to provide local, expert advice.
Keller Williams Tampa Properties
5020 W Linebaugh Ave #100
Tampa, FL 33618