Tampa Real Estate Market Report | December 2015
Welcome. This report will recap market activity for 2015 and look ahead to 2016. ****
This report is brought to you by David and Mary Diaz at TampaTodayRealEstate.com. Our goal is to provide you with accurate and objective thought relative to the current state of real estate for the Tampa Bay area. We are not here to slant reality one way or the other, but rather "tell it like it is" and hope the reader appreciates it. We welcome your thoughts and comments.
Recap of 2015: By most accounts, a very, very good year. Sold volume up 8.86%, Median prices up 11.61%, and number of properties sold up 3.12%. For more details see the the chart below:
Other details can be found in this chart of changes from Nov. to Dec. 2015 and for year over year in Single Family Houses only:
However, there are kinks in the armor.
Pending Sales (contracts not yet closed) and Active Listings have been trending down and for the real estate market in Tampa to remain healthy these trends need to stabilize and rebound.
Pending Sales have been declining for the last 3 years (chart below) to about 1/2 of the 2012 high. Granted, we were coming off a steep recession decline loaded with Short Sales and REOs. Still, not a good thing to see.
Active Listings, the life blood of real estate market activity has also been trending down for many months (see chart below). Lack of sellers (low inventory) has been a complaint for a while and there are many reason for it. First time buyers and Millennials have been reluctant to own real estate, home prices, while up substantially, are still at a level where about 20% of all homeowners in Tampa are still under water and can't sell without doing a Short Sale, and damaged credit impairing financing, etc. are some.
Bottom Line: While the market is still healthy today, it won't stay that way unless these two trends bottom out and reverse in the coming months. ****
What about 2016: As outlined above, there are flags to keep an eye on. With that said, the real estate market in Tampa remains healthy. Typically end of year and new year activity is slow, and it has been. As Springs comes into the picture we expect activity to pick up, however, we think the market will be flat in 2016 overall with a slower 1st Quarter compared to 2015. Further, we would not be surprised if the whole year was also slower than 2015. All said, fewer participants, but prices holding up.
In addition to the two items above, there are other cross currents to deal with this year. Uncertainty over US elections, economic anxiety (slowing economies overseas), the Federal Reserve increasing interest rates (diminishing buying power) and a stock market seemingly in peril are just some to the factors that grab people's attention and create anxiety. There is pent up demand for real estate, but many folks are unable to buy at this time due to damaged credit.
Home Prices however, have continued their steady rise from the bottom of the market in January 2011 (see chart below). We expect continued home price appreciation for 2016, but perhaps not as strongly as in years past. Of course, there is more benefit to owning real estate than just price appreciation, such tax benefits and equity build up.
We are in a Sellers Market, with home supply of about 4 months currently (6 months is considered a balanced market), thus the low home inventory available for buyers. This creates upward pressure on home prices as more buyers compete for fewer houses. It has been a Sellers Market for some time now and we expect this trend to continue.
Unless you are a house "flipper," buying and selling real estate should be a long term decision. We have seen it time and time again. Timing the market doesn't work. All we know about the real estate market, we know it in hindsight. There are way too many variables out there, not to mention the unknowns, to predict real estate activity. The best we can do is look at trends, look for warning flags, and make the best educated guess as to what lies ahead. This is all we can do. Anybody tells you otherwise, run!
We invite you to call on us. Ask the tough questions, check our track record, our experience, ask us about our marketing plan for your home. These things do matter. We thank for reading our report and don't forget to visit us at Tampa Today Real Estate. You can also reach us at 813-245-9677.
**** As always, real estate is local. What is happening in my neighborhood may not be what's happening in yours. This we witnessed during market decline following "the bubble." Call us about your neighborhood.