Tuesday, March 8, 2016
Real Estate Pulse 2016: Short Supply Continues to Push Home Prices Up
It’s no secret that for the past 6-8 months the supply of single family homes has been well below average. Here in the Florida market, the lack of homes to purchase is causing a buyer frenzy. Specifically in the Tampa Bay and Miami housing markets, the shortage is readily apparent. Prices have shot up already in the beginning of 2016 as both first time home buyers and move up buyers struggle to find what they want without paying a supply shortage premium. Shoppers are also having to compete with other buyers when they do locate a property that fits their needs.
Closed sales in the first part of 2016 have drastically outnumbered the amount of properties put on the market in Tampa Bay as well as statewide in Florida. This has further reduced the supply of available homes, forcing prices to jump up in a hurry. All of the large counties in our area: Hillsborough, Pasco, Hernando and Pinellas have less than a 3 month supply of available homes. Real Estate inventory target is a 6 month supply in order to maintain a healthy supply/demand balance. There are an abundance of buyers looking in our Tampa Bay market at the moment, and they are having to compete if they want to secure a contract. Example: SI Real Estate is are currently working with a repeat client of ours who is looking for a new property to add to his portfolio. We are finding that homes priced correctly are selling in days; multiple offer scenarios can and do exceed listing prices. One single family house popped up a few days ago we were interested in for this client. The listing agent advised to submit our best and highest offer by that evening. He also said it would need to be above asking price since they already have offers at full listing price. As you can imagine, sellers in this housing market are securely in the driver’s seat… dating back to about 2013. Many of our clients are getting in now to list and sell their homes at the highest possible prices in nearly a decade! A strong spring real estate market is predicted for spring 2016. Let's see if it happens!
The market is definitely jumping. Sellers are rejoicing with all of the action and buyers are having to act quickly on resales as well as for new builder inventory! Savvy buyers looking for a new home also realize they should have representation in builder transactions for finding all available discounts and negotiating the best deal on their behalf.
Some of the January 2016 data that has been released is extremely impressive: median prices of single family homes in Pinellas, Hillsborough and Hernando saw an average 22% increase in sales prices from January of 2015 to January of 2016. Hillsborough 21.3% for a median price of $194,000, Pinellas jumped 23.6% to $193,500 and Hernando spiked 23.8% to $130,000. This is the 50th month in a row that the statewide median price went up. Just let that sink in!