Recently I saw the media reporting how Tampa Home Sales plummeted in January. The story was in numerous papers and on TV.
It sure seems like Armageddon is right around the corner. But is what they are saying true. Yes, home sales did decline by 32.4% from December to January, though sales normally decline in January, this was a larger percentage decline than we have seen in the past couple of years; this is truly an incomplete picture. Hopefully, this article will fill in the blanks and give a more complete picture of the past, present and future market for Tampa home sales.
Although reporting changes that occur from month to month makes for big news and makes the news appear dire, seasonal cycles happen every year, and of course this year we have had abnormally cold winter weather. Therefore rather than looking at the month to month fluctuations, we can get a more accurate picture by comparing any month with the corresponding month from the previous year.
For example, sales for January 2010 are actually 2.8% higher than they were in January of 2009. This surely would not make news but the 32.4% month to month sales decline surely sounds more exciting.
Looking back over the years it is quite normal for the December to January numbers to decline by quite a bit. For example, December 2003 to January 2004 found a decline of 33.4%, December 2004 to January 2005 a decline of 27.5%, December 2005 to January 2006 a decline of 32%, December 2006 to January 2007 a decline of 29.1%, December 2007 to January 2008 a decline of 23%, and finally December 2008 to January 2009 a decline of 23.7%. So 32.4% this year is a greater decline than some of the other years, and comparable to others, so it does not appear so bad taken in context of normal December to January declines over the years.
Even though the closed sales give an accurate picture of actual closings they do not show the entire picture. Two other important numbers that should be reported are the number of homes for sale (the inventory) and the number of pended sales.
For example in January 2009 we had 9,487 homes for sale in Hillsborough County whereas in January 2010 we had 6,899 or 27.3% less homes for sale over a year ago.
The number of homes for sale is a snapshot of the present market or past. Likewise the number of homes sold is either current numbers or a snapshot from the past. The pended sales actually forecast the future as they will become the closed sales for the coming months.
If the pended sales are less than the same months sales we expect future sales to decline, if they are equal we expect little to no change, and if the number of pended sales is higher than the current sales we expect the sales to increase in the coming months.
Looking at the graph we see that only 611 homes sold in January 2010, however we see that there are 1232 homes currently under contract or more than double the number of homes sold. We therefore expect to see a nice increase in closed sales in the coming months.
If you are ready to make Tampa your home, or looking to sell your Tampa home please contact me at 813-469-3163 or Jeff@MakeTampaYourHome.com.
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