This month's update will include how the Tampa Bay real estate market performed in December 2018 but also some fun stats about the year as a whole, and my personal take on what the future of real estate has in store!
December 2018 Review
After seeing a spike in mortgage rates around October/November that lead many to believe the era of super low borrowing costs was over, mortgage rates ended the year at the same rate they were in September (before they started to climb dramatically). According to Freddie Mac, rates were at 4.55% for a 30 year conventional mortgage. However rates are still much higher than in December 2017 when they were at 3.94%. Even with rates dipping back down in December, they are still the highest they've been since early 2011.
In December 2018, over $1.2 billion of residential real estate was sold throughout Hillsborough, Pasco, and Pinellas counties (down from both last month and last year). There were 4,535 new listings added to the market (down 4% from last December and down 30% from November). The total number of currently active listings was 15,136 - up by 1,279 year-over-year so there is slightly more inventory on the market this year than last. Homes sold for 97.8% of their list price which is down slightly from previous months of the year, but on par with this time last year. As there are added benefits to selling a home before the end of the year and people who typically list during the holidays really have to sell, owners are usually willing to take less which accounts for the lower list price to sales price ratio. So while we were still in a seller's market (which by definition means having less than 6 months of inventory available), buyers had more opportunity to negotiate in December than in previous months.
In December, the number of home sales combined in Hillsborough, Pasco, and Pinellas counties was 4,408 - a decrease year-over-year of 15.9% and a month-over-month decrease of 11.7%. Of the total home sales, Hillsborough county was responsible for 1,797, Pasco had 913, and Pinellas had 1,698. Last month I predicted that we would see an uptick in sales in December as it was the end of the year and many people rush to buy for the benefits (including homestead tax exemption), but surprisingly that was not the case. This decrease in sales is another sign of the market shift that we have already started to experience. While there are eager buyers out there, interest rates are causing people to slow down and consider their options. As this happens, homes will stay on the market longer leading to increased inventory and the turn to a buyer's market.
But to counter the opinion that a market shift means a decline in home values, in the tri-county area, the average home price increased year-over-year by 5.7% and rose month-over-month by 0.6%. Experts agree that we will continue to see a modest 4%-5% annual increase in home values even as the market begins to change. So for those who are considering waiting to see what happens, even if interest rates stay the same, it will still become more expensive to buy as time goes on. The average sales price was $276,754 in Hillsborough, $212,275 in Pasco, $313,455 in Pinellas, and $267,265 overall.
In December 2018, the median time homes were on the market before going under contract was 27 days, up one day from last month but up three days from last year. A good month for Pinellas county skewed this number down a bit, as homes in Pasco were staying on the market a median of 30 days and Hillsborough county was 28 days - much longer than they were earlier this year.
2018 Annual Review
On the whole, 2018 saw a lot of indicators that we are heading for the market shift we have been expecting for years. The biggest take away from 2018, especially in the last quarter, is that the era of rapid home value increases is finally coming to an end. While values are still expected to go up, their growth will likely be more modest as interest rates continue to rise, more inventory becomes available, and the typical buyer profile in our market changes.
The recent market changes coupled with the vast amount of information available online is likely to change the face of real estate as time goes on. The National Association of Realtors expects many part-time and low-volume agents to leave the industry in 2019 as homes take longer to sell and it becomes more difficult to provide top notch service. For consumers, it will become more important to work with a knowledgeable agent who can make sure they are finding you the right opportunities if you're a buyer and using the right sales tactics to get your home sold if you are a seller.
As so much data becomes available to the public via sites like Zillow, it will become more important than ever to work with someone who can process that data and put it into meaningful terms. As the market shifts, there will be a shift in the every day role of a real estate agent as well, and consumers need to choose an agent they know is going to be proactive and know the ins-and-outs of how to handle their specific situation. This will be especially true for first time home buyers and those who have not purchased/sold within the last 5 - 7 years. While it's true the internet makes the process of purchasing or selling a home easier for both the client and the agent, the value for the client will always be in working with someone who can assess your personal needs and make sure you get a tailored service from start to finish.
To celebrate the past year of real estate in Tampa Bay, here's a review of some of the most interesting statistics from 2018 for Hillsborough, Pasco, and Pinellas counties:
Month with highest total dollar volume sold: June with $1.72 billion of residential sales
Total number of homes sold in 2018: 62,949
Total dollar amount sold in the whole year: $16,758,635,931 (almost $17 BILLION dollars!)
Month with most homes sold: May with 6,385
Highest monthly average home price:
Hillsborough: $298,395 in June
Pasco: $215,667 in June
Pinellas: $313,455 in December
The most expensive home that sold this year was in Reddington Beach in Pinellas county. It was a 8,600 square foot home that sold for $7.25 million after being on the market 279 days.
Of the top 10 most expensive homes sold in the tri-county area, three were in Hillsborough and seven were in Pinellas (of which those were split between Reddington Beach and Belleair Shores, 4 to 3).
The least expensive home (that was still habitable and not just land) in 2018 was a 422 square foot studio condo in Kenneth City in Pinellas that sold for $19,900.
Of the 62,000 homes for sale in 2018, only 2,600 were distressed sales (foreclosures, short sales, auctions). This equates to only 4% of total sales in 2018 vs 25% in 2015 (which is as far back as stats are available). This is one of the reasons why many publications have named Tampa Bay one of the strongest real estate markets in the country.
Whether you are thinking of buying or selling, I would love to help guide you through the process. There are a lot of steps to take on either side, and it helps to have a local and knowledgeable Realtor working for you (even if you are building a home).
Remember, real estate is hyper-local and what's happening in your neighborhood could dramatically differ from someone else's. If you'd like a customized analysis of your home's current value or help in deciding whether it's the right time for you personally to buy a home, 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