Is the Tampa Bay Real Estate Market Shifting?
If you’re noticing yourself becoming confused about what’s happening in our real estate market or worse, going down a habit hole of being sure the real estate market is going to fall apart anytime, then you’re not alone. It is easier than not to assume a big dip in prices may occur especially considering the recent rise in interest rates, the stock market decline, the Russia/Ukraine war, but Tampa may be more protected than other areas of Florida.
Unfortunately, much of the real estate news is filled with titles to attract our attention for us to click on them or watch them. The majority of people are attracted to drama and most titles of recent real estate news is dramatized. If you actually read them, you will see much of it is simply chatter or not fully relevant to our Central Florida areas.
We are not in a real estate recession.
We are not experiencing a market correction.
We are experiencing a slight market shift in our Central Florida market.
Even if we do going an economic recession, it does not mean the home values are going to decrease. Interestingly, in four of the last six economic recessions, the homes values increased!
A market correction would be indicated by a sharp decline in home values. This has not happened in Florida and certainly not Tampa Bay.
What is a Market Shift?
There are many signs of a market shift and central Florida seems to be experiencing a few of them.
These include an increase in price reductions, erratic market behavior, and production builders are now bringing back buyer incentives and getting rid of the new home site waitlists.
Current Inventory in the Tampa Bay Cities:
Inventory remains very low at an average of .99 months across our MLS which is basically the center of the State of Florida. A balanced market is about 5.5 months of inventory. We are still very much in a seller market.
South Tampa Inventory: 1.5 months
Tampa Inventory: 1.13 months
St Petersburg Inventory: 1.11 months
Clearwater: 1.00 months
Hillsborough County: 1.04 months
Pinellas County: 0.99 months
Pasco County: 0.92 months
If you’re thinking, “well hey, the sold homes used to calculate the inventory here likely went under contract before the interest rates significantly increased.” Then yes, you’re correct and I’m so glad you thought about that.
Let’s look at if the number of pending sales declined. And if there has been any changes in the amount of new listings that have been coming to the market.
Looks as if there was a slight dip in pending sales for about one week right around the time the interest rates increased. The activity came right back.
The amount of new listings coming to market, homes going under contract, and sales are down from last year at this time, but that is simply due to the lack of inventory. There have not been enough homes to buy so there have been less sales. The market activity has been consistent this year so far with no major changes in pricing, activity, or inventory.
Advise for Home Sellers:
Be very tactful when deciding a list price to enter the open market. The buyers of today may seem more picky and sensitive to home prices. No need to discount your home if selling at the time this article was written. Also, might not want to severely overprice your home as the buyer may be cautious causing your home to sit on the market and go stale.
Advise for Buyers:
Get out there and buy a home while there is less competition and potentially nervous sellers. You may be the only one making an offer. You may be able to get contingencies such as appraisals or sale of your property. Don’t expect home sellers to be highly negotiable on the price of the homes as we are still in a seller market.
My Prediction on where the market is heading: I’ll leave that in the video above.