Interestingly, January was the first month in three years that the available supply of inventory reached five months. At six months, the market is considered balanced (meaning neither a strong buyer's nor strong seller's market). Educated Realtors have been discussing the market shift for a while and have seen the signs that it's coming. This number is the biggest indicator that what we have been expecting is finally here. Many don't realize that the shift is like a pendulum - starting slow and then rapidly speeding up as it gets closer to the peak change. Throughout 2018 we started to see the beginning of the shift, which then sped up around October. Now with the new year bringing 7,124 new listings in one month (a 44% increase since December 2018), inventory is back to where it needs to be to sustain an equilibrium between buyers and sellers.
In January, the number of home sales combined in Hillsborough, Pasco, and Pinellas counties was 3,440 - a decrease year-over-year of 8.6% and a month-over-month decrease of 27.5%. Of the total home sales, Hillsborough county was responsible for 1,412, Pasco had 773, and Pinellas had 1,255. But every year home sales always drop dramatically in January as many people push to close in December for all the related benefits of owning before the first of the year. January's home sales were on par with those in January 2015 and 2016, when the real estate market was good but not booming, so the year-over-year decrease is another indicator that we are starting to reach a more balanced market.
Media outlets are running stories this week about the "dramatic" decline of home sales and the implications for the American economy. However, real estate is hyper local and the Tampa market is still doing very well. That being said, real estate is also cyclical, and knowledgeable real estate agents have expected a market shift for some time. But this does not mean we are heading for a 2008 level market crisis. It means we will start to see homes staying on the market longer and sellers having to be more willing to negotiate or offer concessions to buyers if they want to sell their home. But for those who need to either sell or buy, it will still be a stable market in which to do so.
In the tri-county area the average home price increased month-over-month by 1.7% and rose year-over-year by 10.8%. The average sales price was $268,345 in Hillsborough, $201,565 in Pasco, $341,334 in Pinellas, and $270,415 overall. However, the overall average price for January (and consequently the growth percentages) is distorted by the astoundingly high average for Pinellas county. Both Hillsborough county and Pasco county actually saw drops in average price month-over-month (though they still saw reasonable growth year-over-year). It will be more important now to watch the stats closely in months to come to determine if we should expect a marginal drop in home prices this year as mortgage rates increase and more available inventory leads to more competition.
In January 2018, the median time homes were on the market before going under contract was 34 days, up five days from last year and six days from last month. However, this is a common annual trend and still a very short time for homes to be on the market before going under contract.
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're buying new construction!).
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