Tampa Bay Real Estate Statistics – Second Quarter 2022
The real estate market remains scorching hot in Tampa Bay. Continued migration to Florida (with Tampa Bay being a top destination) generates increased demand for housing. Building supply and workforce shortages make it difficult for developers to expand to meet increased demand. As a result, homes listed in MLS go under contract within a few days. To increase the chance of success, contracts sometimes include:
- An all-cash offer with no appraisal contingency
- Either a short inspection period or total waiver of the inspection requirement
- An escalation clause that increases an offer above the best-documented offer received.
- Offers are being made prior to the client even seeing the home
For the next several quarters, we anticipate this aggressive environment will continue. During the last quarter of 2022, there may be factors that slow down demand and allow the housing market to rebalance to a more normal (still tight supply) balance. That is dependent on:
- First-time homebuyers being priced out of the market by skyrocketing prices (up 19.2% last year)
- Interest rates, already at 4.42%, continue to increase to 5+%, making monthly payments for homeownership less affordable. A 1% increase in interest rates (4-5%) results in a 12.4% increase in payments
- Rising interest rates make it more expensive for existing homeowners to give up their low rate only to obtain a higher interest rate mortgage on their new home
- A potentially active storm season would dampen the migration to Florida as it did after the storms in 2004 and 2005
If considering a new home, one should not wait for home prices to decrease as nothing in the current market indicates a price reduction soon. Waiting will most likely result in an even higher interest rate and a higher price, reducing the home you can afford. So even with these headwinds, today continues to be the best time to purchase a home if you are looking to make a change in the near term.