When will house prices drop? It doesn’t look like housing prices are dropping anytime soon.
As the economy continues to grow and the housing market gets stronger with each passing week, the nation just hit another milestone. And the magic number is $200,000.
For the first time in this nation’s history, the average home in the U.S. is now worth more than $200,000 – or $200,400, to be exact.
That figure was provided in a new report by Zillow, which also noted that the national median home value is up 7.5 percent from a year ago.
The desire among prospective buyers to jump into the housing market isn’t limited to certain “hot spots.” Across the country, buyer demand remains uniformly high.
At the same time, Zillow noted there’s a shrinking number of homes for sale – 11 percent fewer homes on the market today compared to a year ago. That represents the largest drop in inventory in four years.
And that’s helping to push home values up across the country.
The same is true in cities across Central Florida, like Tampa and Orlando – except for one key difference. In both of those cities, the median price for a home is close to the national average.
That means prices haven’t soared to the sky-high levels seen in cities like San Francisco, New York City and Washington D.C. In those cities, a lot of prospective buyers have been pushed out of the market entirely.
In the Tampa Bay area, that’s definitely not the case.
What is creating an increase in current housing market in 2017?
In many markets around the country, Zillow notes, home prices are still on the upswing. Some cities are experiencing double-digit year-over-year gains in home prices: up 13 percent in Seattle, and 10 percent in Dallas and Las Vegas, for example.
Zillow pointed out that the national housing market remains red hot. And there are no signs that it will start slowing down.
What Zillow found was that across the country:
• Home values are at or close to peak levels across the board.
• Supply is limited, with fewer homes on the market.
• Demand among buyers is sky high, and competition has been fierce in some locations.
• In most markets, prices are likely to continue rising.
Zillow’s advice to prospective buyers in this highly competitive environment is to be sure their finances are in order in case they find a house they want to put an offer on. They also recommend:
• Checking first to know what you can afford so there is no trouble obtaining financing if your offer gets accepted.
• Finding a real estate agent with some experience handling markets where bidding wars are common.
• Staying in the market as buyers. The nationwide median rent of $1,422 per month is also up, so it’s possible to secure a mortgage where you pay less, or only slightly more, than what you would pay in rent. And at the same time, you’re not a homeowner.
What is else contributing the rising prices in the current real estate market? ?
The market isn’t being fueled solely by the limited supply of homes. There’s also an extreme shortage of low-priced starter homes for sale. In some markets, the only homes being listed for sale are on the high end.
Many market analysts believe the reason so few starter homes are available is because when the foreclosure crisis hit in 2008 and prices plummeted, investors swooped in and purchased many of these houses at bargain basement prices, then turned them into rentals. Today, a lot of those starter homes are still being used as rentals and are not going back on the market.
It’s been estimated that if those investors/landlords had placed all those starter homes on the market, the national median value would not have reached $200,000.
In fact, in some of the nation’s most expensive housing markets, inventory has fallen at a much faster pace than Zillow’s reported 11 percent drop nationally. That includes in San Francisco, where inventory is down by 26 percent; in Seattle (down by 24 percent); and in Washington, D.C. (down 20 percent).
That’s why in June, home sales dropped by 1.8 percent nationally, but the median price was up nearly 7 percent. The drop in sales didn’t reflect a weakening housing market, but rather the fact that there simply wasn’t enough homes for sale in June to meet buyer demand.
Why is the housing market in Tampa succeeding?
Some metropolitan areas, like Dallas and Tampa, have a healthier supply of homes for sale. They’re also benefitting from something else: a strong economy and the continued availability of jobs.
In the Dallas, Texas housing market, the median price for a home is $211,000, just above the national average. In the Tampa Bay area, the median value was higher, at $245,000.
Those price tags are what keep many buyers, particularly Millennials in search of their first home, in the market.
In the South — and Florida and Texas in particular — business-friendly locations that remain affordable have been big winners economically. When it comes to which cities had the fastest growing high-wage service jobs, Orlando ranked at No. 11 and the Tampa-St. Petersburg-Clearwater area ranked No. 14.
In the last two years, the business services sector has grown in Central Florida at a faster pace than tourism, creating 24,000 jobs. That compares to 21,300 in tourism and hospitality.
Conclusion: The Domain Homes option
That strong economy is bringing more people to the Tampa Bay area, which is why Domain Homes continues to purchase older, dilapidated homes in some of the region’s most popular and appealing neighborhoods, and replaces them with brand new homes that are move-in ready.
Our homes are helping to keep Tampa’s housing market affordable, while at the same time giving prospective buyers the opportunity to settle into a new home that doesn’t require a long list of costly repairs.
Contact us today at 813-580-8111 to learn more about the homes we have available.