2023 Second Quarter Tampa Bay Real Estate Trends
West Central Florida’s real estate market continues to be pulled by counterbalancing forces. Inventory is low, and people continue to migrate to Florida in record numbers. Interest rates are fluctuating between 5.5-7%, which is about average for a 50-year period, but they still feel high after record-low rates below 3%. Prices seem high but have remained strong because of low inventory and continued population growth. Let’s look at these factors individually.
Inventory is almost double the number last March but remains at least 30% lower than inventory in 2020. Many homeowners with a sub-4% mortgage are hanging onto their current homes. Getting them to accept a new home at a significantly higher rate will take years and some major life events. New home construction has not jumped yet, as concerns about the economy and interest rates have kept builders from ramping up faster.
Home sales have been improving since September 2022. March 2022 was the first time sales reached 4000 since June 2022. Part of the increase is because more homes are sold in the spring than at any other time of the year. But it also reflects the need of new Floridians to find a place to live. One factor depressing home sales is the pullback of first-time home buyers, with the double whammy of relatively high interest rates and continued strong home prices. Either would have caused them to pause, but the two together make it difficult. Now they have an issue with both coming up with a higher down payment and then accepting higher monthly interest payments. This is a temporary pause for this group; when they return, we’ll see a significant jump in sales.
Finally, prices have remained stable since July 2022, when the average price peaked at $400,000. Since then, prices have fluctuated between $390k and $370k. We do not anticipate a significant price drop in the next 12 months as we work toward a better balance between supply and demand.
So, what does that mean for the home buyer or seller? The next 12 months represent a relatively stable time in the real estate market. You should be able to sell your home for a reasonable price (significantly more than 2-3 years ago) as well as buy a home with stable pricing and reasonable rates by historical standards. When anticipating a major purchase/sale like a home, stability is a good thing.
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