What goes up must come down. After nearly two years of explosive growth in the housing sector, economists and real estate experts said sales could take a major dip in 2023.
But so far, that hasn’t happened.
Kristine Smale, an executive vice president for the real estate analytics company Zonda, said that markets across the country are faring better now than they were during the fourth quarter of last year.
In Tampa, St. Petersburg and Clearwater, sales are down 19.4% from this time last year, according to February data from Greater Tampa Realtors. Still, sales have increased 24.6% from last month.
That may be due to softening mortgage rates. Rates peaked in October when they crossed 7% for the first time in two decades.
“We’ve had some time to recover from that punch, get our bearings, and now people are saying, ‘You know what? 6% mortgage rates aren’t so bad,’” said Tampa-based Realtor Lance Williams.
The days of sellers receiving multiple offers over asking price within 24 hours of listing their homes are long gone. But Williams said he and other agents are glad to see it.
“We are almost back to a normal market. We are seeing things increase in a healthy manner, rather than ‘the house is on fire.’”
Meanwhile, home prices have not let up. The median sales price in the Tampa Bay area is $389,995, up 3.1% from last year. Nationwide, the median sales price decreased 0.2% from last year, according to February data from the National Association of Realtors.
“Tampa has a bit more resiliency and that’s because we’re still seeing this out of state migration coming to the area with higher incomes,” Smale said.
A lack of supply has also driven prices up. Last month there were 6,988 active listings in Tampa Bay. That’s a far cry from the 11,816 listings on the market in February 2019, before the pandemic-fueled home-buying spree took hold.
Many buyers are seeking out new construction homes as a result. Vaike O’Grady, vice president of marketing and communications for Metro Development Group, said her company is currently on track to match sales from 2022.
“New home builders have been very nimble with coming up with ways to reduce the cost of a home and get buyers in,” she said. The builders her company works with have offered mortgage “buy downs,” meaning they will subsidize a buyer’s mortgage to give them a lower rate for the first two years.
As 2023 progresses, experts agreed that the fate of the real estate market will largely depend on whether or not there is a recession.