Handling the real estate market is very similar to managing stocks; buy low, sell high, and always make intelligent investments that will earn you the most money over the long term. Unlike the stock market, however, real estate requires much more involvement than simply checking performance on your computer, and the results are, unfortunately, not instantaneous.
Selling a home elicits a significant amount of effort; finding an agent, listing and staging your home for buyers, and even finding a location to live while your home is on the market all serve as inconveniences that can add to the stress that selling a house already causes.
To better cope with the strain this causes, an experienced real estate agent is a powerful asset to have when looking to sell your home.
Markets all across the country are still recovering from the market decline that occurred in 2006 and needed government intervention to prevent a collapse of the industry. However, performance today is far better than it used to be, resulting in a greater amount of housing market activity.
In order to know when is the best time to sell your home, it is vital to understand how the market in your area is currently performing. Aspects such as total market inventory, neighborhood quality, and interest rates are only a few of the many factors that influence when you should attempt to sell your home, and how efficiently you can expect it to sell.
Knowledge about market trends is also essential before you rush and attempt to list your home on the local market, as you need to know exactly what you are getting yourself into. The local housing market’s performance over recent months and years is indicative of what you can expect while attempting to sell your home.
Of course, it isn’t enough for you to know all that you can about the market; your agent should be just as informed, as well, so they can sell your home as quickly as possible for the most amount of money.
National trends that may affect the market
Rise in interest rates
The Fed has been talking about a slow but steady rise in interest rates for all of 2016. However, there was only one rate increase. However, it is still a possibility that rates will increase by ½% in the next few months. As rates rise, if all other factors remain the same, current home prices will fall.
Mortgage qualification and availability
It has been very hard for first time buyers to qualify for loans, and it appears that trend will continue in 2017. However, if interest rates rise, lenders will be forced to ease up on their guidelines to keep business flowing.
First time buyers have represented the lowest percentage of home sales this year than ever before. If this trend continues, this will cause a falloff in the market, as there will be no move up buyers.
Lack of available inventory
2016 had many markets with a very low inventory of homes available for sale. The trend for that has eased up somewhat recently, but this may be due to the seasonality of home sales versus more homes on the market.
New home construction
Builders have started more homes this year than in many previous years, although we are not quite back to the peak building years of 2004-2006.
Developers and builders have cited excessive regulation as one issue they feel has hindered new construction. The time it takes to get a permit approved for a new home or development is at an all time high, as are costs to obtain the approvals.
Local trends in Northwest Tampa
Prices increased by 19% in the last 3 years, and about 6.6% in 2016
However, this was not the same for all areas of the market.
Prices have increased because, like the national trend, there is a lack of inventory available. New construction is just now catching up with demand, but is still several years off the peak for this.
There is a lot of new construction on lots and parcels that have been sitting around undeveloped since the downturn in 2006. For example, there are new home developments off Wilcox road and Lakeshore, and another new development off Dale Mabry and Van Dyke.
The lower the price, the stronger the demand
This may seem simple at first, but in most publications the appreciation is mentioned as if it affects every price range equally.
For example: homes for sale for under $200K in Northwest Tampa have been selling at a rate of 75/month in the last 90 days. There are currently 90 homes on the market in this price range. If no other homes come on the market, the available inventory will be sold in 1.2 months. Of course, more homes will be put up for sale, but this really places upward price pressure for new homebuyers.
By contrast, in this same area of Northwest Tampa, there were an average of 20 homes sold per month above $600,000, and 181 currently on the market. If no other homes come on the market, the available inventory will be sold in 9 months. Obviously, more homes will come on the market, meaning less upward price pressure.
At above $1 million, there were 4 homes sold per month with 67 active listings. This will take over 16 months to sell off the existing inventory of homes.
The closer to town, the better the appreciation
This should continue into 2017. Original Carrollwood and Carrollwood Village are both notable locations in this respect. The people who I have seen purchase here have moved locally from other parts of the area and want to be closer. South Tampa prices have gotten so high, that these areas have become a good alternative.
The newest homes also seem to have the most appreciation. Many homes built since 2010 are conveniently located near downtown and Westshore. South of Bearss/Ehrlich, there are only 12 resale homes built in 2010 or later.
Planned communities have held up very well. Westchase, which has a shopping and dining district, community parks and pools, and a golf course, has done very well and will continue to do so.
Great school districts have made a lot of difference
Villarosa, which is right next to Steinbrenner High School, Martinez Middle School, and McKitrick Elementary averaged a little over 5 sales per month, and has only 10 active listings on the market. This is a 2-month level of inventory, meaning that if sales stayed the same and no new homes were listed it would only take 2 months for all the current homes to be sold.
Fewer foreclosures and short sales
In the area, there were only 21 short sales sold per month in the last 90 days, and 61 bank-owned in this same time period. At the moment, there are only 50 short sales and foreclosed homes for sale in the area.
This contrasts the 656 short sale and bank-owned homes sold in 2015, which had an average of 54 per month.
Low interest rates have been the driving force in this market.
Interest rates this past year have been around 3.5% for a 30-year fixed rate loan. As long as they stay at this level, affordability will keep driving prices upward.
However, if rates were to rise abruptly, the impact might affect sale prices. At current rates, a family with reasonable debt can afford a $300,000 home if they earn $75,000 per year. At the current 3.5% interest, the payment on this home is $1,347 per month. If rates increased to 4.5%, that payment becomes $1,520 a month, which is a 13% increase. The family now needs to earn almost $85,000 per year.
The market has stayed fairly steady for the last several years.
There is talk of a real estate bubble. However, population growth in this area has been good, income levels have been rising, and real estate inflation, while significant, has not been exorbitant in Northwest Tampa.
All of this looks to forecast a good and recovering market from the decade-long downturn that has been a damper in recent years.
Northwest Tampa has proven to be a prime location to buy and sell real estate due to the expansion of neighborhoods through new construction, low interest rates, and an overall increase in market performance.
With a unique market like the northwest Tampa area, it’s best to hire a professional who understands the location’s extensive history and can efficiently capitalize on selling points that appeal to buyers. Doing so can not only make your life easier by assisting with the home selling process, but may also earn you more money, as well.
Fortunately for those who are looking to buy or sell a home in the region, Joe Lewkowicz is equipped with the knowledge and expertise to connect eager buyers with those intending to sell their homes in the area.
Joe Lewkowicz has over 40+ years of experience in the real estate industry, specifically the Northwest Tampa market. This establishes him as a powerful primary source for information about local market performance, future market projections, and the many factors that influence both.
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