Why Waiting to Buy a Home Until Next Year Could Cost YouMany people in the Tampa Bay area are sitting on the fence trying to decide if now’s the best time to buy a home. These include renters
5 Reasons Why Tampa Bay Housing Prices Continue To Rise
Dated: April 19 2021
5 Reasons Why Tampa Bay Housing Prices Continue to Rise
Low Inventory- The Tampa Bay area of Florida could handle up to 5 TIMES more inventory hitting the market TODAY and we would then be in what’s considered a ‘normal’ housing market. According to Freddie Mac, the U.S. housing market is over 4 million homes shy of what buyers need right now.
The Price of Lumber Has Increased Big Time- A solution to the housing inventory problem is an obvious one…build more homes! Our country has spent the last decade NOT building enough new homes to prepare for the influx of Millennials who want to buy a home in this decade. Builders have notably kicked it up a notch and are trying to build more homes faster than ever…but there’s one major caveat- the price of lumber. In the past year, the price of lumber has INCREASED OVER 250%. According to this recent article, the massive price increase has added more than $24,000 to the price of an average newly built single-family home and $9,000 to the average price of new construction condos and townhouses.
Low Mortgage Rates- Even if mortgage rates rose to just over 4% for a 30-year fixed mortgage, that would still be considered VERY low by the majority of financial analysts out there. Buyers will continue to try and buy homes to take advantage of low rates before they’re gone. More buyer demand = higher prices. To see how fluctuating mortgage rates can affect your monthly housing payment, check out our recent blog on this topic HERE.
Bidding Wars- It’s no secret homes are going up in price faster than appraisers can account for it. How many people have told you about homes that aren’t appraising for the price they’re under contract for recently? That’s because a whopping 42% of homes are selling above the asking price right now (equating to 2 out of every 5 homes sold). As home buyers compete for limited housing inventory, bidding wars are driving up the prices. It doesn’t mean the homes are necessarily selling for too much, as market demand determines that, but it does mean prices will continue to increase until we solve the inventory problem.
There Are A Lot of Cash Buyers- Did you know that 1 in 3 home buyers in Pinellas County acquire homes with cash and no mortgage loan? The luxury housing market is even more cash-driven, with 1 out of 2 buyers using cash to make a home purchase. It used to be that making an offer on a home with cash would get you a better price, now it just gets your offer closer to the top of the pile on most homes. Due to the large amount of cash transactions, buyers using a mortgage to purchase a home are offering even higher prices and less contract contingencies to get into a home, again driving up those prices.
If you would like more information on your local housing market in Pinellas County or the Greater Tampa Bay Area, feel free to MESSAGE US or Call Us at (727) 400-3315. We'd love you help you with all your real estate needs.
Andrea is the Managing Partner of The Sandy Hartmann Group. Andrea was born and raised in the Tampa Bay area and is a licensed Realtor with over 15 years of Marketing and Finance experience, holding ....
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