The real estate market continued to show signs of ravenous demand in April, but sales have slowed as inventory remained near historic lows — while prices continued their upward sprint.
Nationally, sales of single-family homes, townhomes, condos and co-ops declined 2.7 percent in April compared to March, though they were still up nearly 34 percent year-over-year, according to numbers released Friday by the National Association of Realtors. The median sales price once again hit a record, at $341,600, up 19.1 percent from this time last year.
Lawrence Yun, the association’s chief economist, pointed to the lack of homes for sale as continuing to stifle sales and inflate prices, but said the problem could soon be eased.
“We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” he said in a statement. “The falling number of homeowners in mortgage forbearance will also bring about more inventory.”
But not all metrics point in that direction. The construction of new homes dropped 9.5 percent in April, according to U.S. Census Bureau data, which builders attributed to rising costs of building materials.
Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association, said that data suggest “in the short-term, inventory shortages will persist.”
In past months, Tampa Bay had bucked the national trend of slowing sales — but in April, that was not entirely the case, according to new figures released by Florida Realtors. Pasco, Hillsborough and Hernando counties all saw slightly fewer single-family home sales in April compared to March, suggesting the dearth of homes on the market may have had a more serious slowing effect than earlier this year.
Pinellas’ sales were still up, and all four counties still saw huge increases in sales compared to April of last year.
Prices in Tampa Bay also continued their meteoric rise in April. The median single-family home sale price in Pinellas hit $350,000, more than 20 percent higher than one year ago. In Hillsborough, the median sale price was $325,000, also a more than 20 percent annual increase; Pasco’s was $287,790, a 16.5 percent annual rise; and Hernando’s was $240,000, about 20 percent higher than this time last year.
Brian Scott Sprague, a broker associate and director of developer services with Keller Williams St. Pete, said to make up for homes not appraising out to the high prices, “almost every single buyer offer my team has written in the last few months has waived appraisal contingencies,” meaning that the buyer will still commit to purchasing a property even if the appraisal comes in low.
“It doesn’t matter if it doesn’t appraise, you’re still buying it,” he said. Because banks will only lend for the appraised value, that means many buyers are willing to either pay the difference outright, or will renegotiate with the seller for an amount they can pay out-of-pocket on top of the appraised value.
The types of people who are buying homes are also shifting, according to Friday’s numbers.
The National Association of Realtors said that first-time buyers were responsible for 31 percent of sales in April, down from 32 percent in March and 36 percent in April 2020. At the same time, purchases by investors and second-home buyers were on the rise, as were cash sales.
“First-time buyers in particular are having trouble securing that first home for a multitude of reasons, including not enough affordable properties, competition with cash buyers and properties leaving the market at such a rapid pace,” Yun, the economist, said.
Cash sales have dramatically increased in the Tampa Bay market over the past year. In Pinellas, Pasco and Hillsborough, the percentage of sales that were paid in cash has more than doubled since April 2020, according to the Florida Realtors figures.
Sprague personally sold a property in April — a newly constructed home in Palmetto that he bought during the onset of the pandemic last year, when uncertainty was high and builders were offering major perks and big discounts. A buyer had walked away from the sale, and Sprague was able to purchase it for about $315,000, he said.
Last month, he sold it for around $489,000, to someone from Atlanta looking for a second home, he said. Sprague has also noticed more people buying homes to use as vacation rentals.
“People are just coming from everywhere,” he said. “Usually in a normal market we see people predominantly from Chicago, D.C., but it’s literally New York, Miami — there’s a lot of focus on St. Pete.”