The real estate market has seen an abundance of activity in 2012, both positive and promising. The local Tampa real estate market has shown significant growth since January. It continues to point in the right direction.
We started the year off hoping that the unemployment rate would continue to fall. To our benefit, it has fallen over 1.7% which is far better than the national average. There were also predictions of an increase in new home construction stemming from depleted inventory resulting in a more balanced supply and demand curve.
Jumping forward, September realized more new home starts than any month in the past four years! Not only is this a strong indicator of builder confidence, which was the highest it has been in six years, but new home starts result in construction jobs created. Economists from the Home Builder Group suggest that with each new home built, three additional jobs are created and about ninety thousand dollars in tax revenue are generated.
Back to spring of 2012, home prices and home sales were on the rise, as expected. Chief economist Lawrence Yun suggested that this was due to a recent rise in job growth and the rising prices of rental properties. It made sense to purchase a home! Tampa, Florida was mentioned as one of the highest ranking recovering cities by Clear Capital Research, only behind two other metro cities in the United States. The light at the end of the tunnel was clearly visible for the Florida real estate market in the early spring 2012. However, there were still some claiming it was too early to say for certain.
As the year progressed, more and more real estate headlines offered data about home affordability. The real estate experts explained the factors that were driving home affordability to new levels that made it a clear choice to be a property owner. For example, in April the housing affordability index in Tampa, Florida market was higher than most cities in the U.S. Moe Veissi, President of NAR, suggested that if mortgage rates continued to fall, we would realize a larger increase in real estate activity nationally, and in the Tampa market. Little did he know that in November 2012, our national mortgage rates would drop to the lowest all time rate of 3.31%, while only a year ago, rates hovered around 3.94%! National and international buyers fueled the Florida market during this part of 2012. The Tampa / St. Petersburg areas made the “top ten” list of U.S. hotspots for foreign real estate investors. These cash ready investor buyers accounted for 31% of all real estate transactions in Florida!
As the summer continued in Tampa, Florida signs of growth were sustained. The average listing price of a property had increased 14% from the previous year. The gap between listing prices and home sales price was rapidly widening. Further, we saw homes being sold for $126K when they were purchased for the $80k range only a year ago. Now the average median sales price has increased about $15k. Property inventory plays a big role in this real estate market trend. A decrease of inventory in the range of 24% from the previous year, coupled with new short sale guidelines set forth by the FHFA, are influencing factors to the upward trend of the real estate market as a whole in Florida. These guidelines have helped to diminish the activity of short sales and foreclosures, which previously were a drag on home values in many communities. As a result of these influences, multiple offer scenarios became commonplace in Tampa. Bidding wars produced quicker and higher home sale prices. The burden of showing homes for sellers was minimal. On the buyer side, the scenario spelled out higher initial offers and taking advantage of “cheap money” due to low interest rates.
As we close out 2012 on an encouraging note, it is prudent to recap this year’s improvements in Tampa, as well as on a national level. Real estate closings for existing home sales are up 25.3% from a year ago while the prices of these homes also increased 11.4%. Even Dr. John Tuccillo, Chief economist of Florida Realtors, was impressed of the year over gains and took note of the depth of our real estate recovery.
We would be glad to discuss your real estate goals for 2013 at your earliest convenience. We encourage everyone who is able to take advantage of this market to do so, whether you are a real estate buyer, a conventional or short sale seller, an investor, this opportunity is golden. Best wished to you and your family in 2013!
SI Real Estate offers highly personalized, multilingual, full-spectrum real estate purchase and sales services. We are a boutique for sophisticated investors, select owners or renters who may be upgrading locally, or those making traditional relocations. We also provide turnkey landlord and tenant management. Blending comprehensive insight into the Tampa Bay area with international perspectives for a worldwide clientele, we like to think that “SI Real Estate is Global Real Estate in Every Way!”