The 2018 housing market is doing very well, so far this year. It was a familiar report that came out in January: sales of new homes had fallen for the second straight month.
Sales of single-family homes in Florida also dropped in January compared to a year ago.
But as with most statistics about the housing market, there’s a lot more here than meets the eye. Judging either result as a clear sign of weakness in the market would be too simplistic. The picture is a lot more complicated than that.
Bloomberg has echoed that, noting that they did not want to say sales had dropped, but rather had “normalized.”
What does that mean?
Let’s look a bit closer at what happened in January.
Nationally, the drop in sales of new homes was blamed on harsh winter weather up north. The Commerce Department reported that January’s sales totaled 593,000, the lowest level since August and down 7.8 percent from December.
In Florida, sales of single-family homes totaled 16,564 in January, down 1.3 percent compared to January 2017. Those figures were reported by Florida Realtors, which noted that the issue here, as it has been for months now, was inventory.
The ongoing shortage of available homes in many of Florida markets contributed to another drop in sales, even as median sales prices rose.
So will this trend ever change? Possibly, for several reasons.
How strong is the spring 2018 housing market expected to be?
Real Estate site Zillow is projecting that the spring buying season will be a strong one this year. Zillow is predicting that nationwide, homes listed in May will sell around nine days faster and for nearly 1 percent more than the average listing compared to past years.
Zillow also believes the percentage could be even higher in some markets, reinforcing the idea that spring is an ideal time to sell.
And certainly no one is predicting diminishing interest among buyers. Buyer demand has been sky high for more than a year, which is why prices have been rising steadily. The challenge throughout the year has been inventory, which has left a lot of prospective buyers feeling frustrated. But it has also put considerable pressure on many of those buyers, leading to bids for homes higher than the asking price.
What happened to the 2018 housing market in January?
The statewide median sales price for single-family existing homes was $240,000, up 9.1 percent from the previous year. The statewide median price for condo-townhouse properties in January was $179,900, which was 11.7 percent higher than January 2017.
And January marked 73 consecutive months that the statewide median sales prices for both single-family homes and townhouse-condo properties had gone up from one year to the next.
But at the same time, the inventory in January was very tight, with just a 3.9-months’ supply for single-family homes.
That’s why 2018 has already been dubbed the “Year of the Seller,” with a 2018 housing market that seems likely, as Zillow predicted, to heat up for the spring and summer home buying seasons. This is a market where there’s already a lot of buyers lined up, and the limited stock is helping to boost prices. That means a sellers’ market that’s going to be sitting pretty come spring.
So what could change that?
One simple factor: construction.
Will there be more home construction in 2018?
In recent months, the housing market has seen an increase in new construction projects coming down the pipeline.
And there are projections that a growing number of homeowners thinking about selling and upgrading, or looking to downsize, will look to new construction to buy. They have the advantage of selling in a strong market, then focusing on brand new products soon to hit the market.
Zillow has reported that new home construction in the U.S. should increase in 2018. Zillow is forecasting that new home building will rise 10 percent by the end of this year, totaling 633,000 new homes at a seasonally adjusted rate.
That’s likely to positively impact the tight inventory in this market, which has to some extent been impacted by slow new home building, as well as fewer homeowners deciding to sell.
What Does The 2018 Housing Market Mean for the Tampa Area?
In Tampa Bay, both trends – rising prices and limited inventory – were on full display in January. Home prices in Pinellas and Hillsborough counties soared in January, marking the largest prices gains in months.
The median price of a house in Pinellas was up 14 percent in January to $245,000, even as closed sales plunged by 12.8 percent. Prices were up by 12 percent in Hillsborough, to a median of $234,945.
However, Tampa Bay has also benefited because housing costs here are lower than in other metro areas in Florida, not to mention many other parts of the country. In Tampa Bay, the cost of housing amounts to 77 percent of the national average, which is 12 percentage points less than other Florida cities like Jacksonville and Orlando, and well below cities like Dallas, Denver and Austin.
And for those who have relocated to the Tampa Bay area recently and are looking for new homes in Tampa, the Tampa Bay customer home builder Domain Homes has not only been constructing new homes but is doing so in some of Tampa’s most desirable neighborhoods, giving buyers more options than in other cities. Those looking for new homes for sale in Tampa Bay have a great option with Domain Homes.
Tampa Housing Market
As the 2018 housing market continues to ramp up in Florida and nationally, there are good reasons to expect a strong housing market this spring, where buyers normally are out in force. Tampa homes for sale should go fast.
And it helps as well that in the Tampa Bay area, Domain Homes, the region’s urban renaissance new home builder, continues to build in Tampa Bay’s most sought-after and established neighborhoods. That includes South Tampa, West Tampa, North Hyde Park, the Heights, and St. Petersburg.
Domain Homes purchases older, often run down and dilapidated homes in these popular neighborhoods, and replaces them with brand new homes, knowing how important location is to their buyers.
Their homes are close to what buyers are looking for, including top-rated school districts, shopping, and the exciting downtown night life.