Nancy Cross with The Cross Team at eXp Realty, your resource for Commercial and Residential real estate.
I talk with people all the time who ask me whether we’re in a bubble and whether the market will crash soon.
I love numbers and I watch our market every day, looking at trends, recent activity, and current pricing. Let me share with you my thoughts on what’s happening now and what to expect for the remainder of 2022.
Since the pandemic, home prices have shot up tremendously with home values increasing by 30% or more since January of 2021. Mortgage rates have been at historic lows making home ownership affordable for many buyers.
In the past few months, the Fed has increased rates in an effort to curb inflation and runaway home prices. It’s working! The demand is slowing somewhat, although here in Tampa Bay we still have less than a month of inventory – which means there aren’t enough homes for sale for the number of buyers moving into the area.
That being said, I’ve noticed 4 things happening now:
- Multiple builders are sending me inventory sheets showing what homes they have coming available. That’s something I haven’t seen for the past year. Those inventory homes may not be available until the summer or fall, but that means the demand is easing a bit.
- I’m still seeing homes going under contract faster than new listings are coming up for sale, but as I look at activity in our Multiple Listing Service or MLS, I’m seeing more homes coming back on the market as contracts fall through and more price decreases than I’ve seen in a while. This is telling me that buyers may not be willing or able to pay those appraisal gaps like we’ve been seeing.
- When I list a home for sale, I’m seeing fewer offers in a multiple offers situations. So instead of receiving 14 offers like I did last year, I may only receive 5. That’s still a lot, but …
- I talk with agents around the country regularly and I’m hearing from some parts of the county where prices are already declining and their markets are cooling.
What does all this mean? It means that we may have hit the peak, but none of us will know that for sure until the trends actually show a decline. Just like the stock market.
Here’s my prediction for the rest of 2022 and possibly 2023:
We’ll continue to see a supply shortage until builders step up their pace of construction, especially with the number of people moving to Tampa Bay. Thanks to their ability to work virtually, our great weather, no state income tax, gorgeous sunsets and an abundance of outdoor activities, people want to come to Florida! And who can blame them! We all love it here!
But what about the mortgage rates? The media is really good at scaring the pants off of us all. The headlines read gloom and doom for the housing market, spooking people into thinking that the Second Great Recession is coming with housing prices tanking. I don’t see that happening.
Mortgage rates are STILL historically low compared with 12-16% in the mid 80’s. Is a 2% interest rate better? YES it is, but I don’t think we’ll see that again any time soon. Earlier in the year, I predicted we’d see 4-5% mortgage rates for 2022. Set your expectations between 4-6% interest rates over the next two years.
Home prices simply cannot continue to increase at 30% every year. That’s unsustainable and it’s always disappointing when the ride ends.
Bottom line for Tampa Bay’s Real Estate Market:
- Home sales are still strong
- There are still more buyers than there are homes for sale, which will keep prices high in Tampa Bay.
- We live in one of the hottest markets in the US. And I’m not just talking about temperature.
- Tampa Bay is attracting more and more businesses to the area which means more demand for housing
- Interest rates, historically, aren’t terrible. In fact, they’re still great! If you’ve owned a home before, remember when we thought 4% was like hitting the lottery? Keep it in perspective!
Above all: There’s no need panic! If you have no need to move, stay where you are. If you need to sell or buy, call me! We’ll talk about market conditions in detail. I’ll be happy to talk through any concerns you have and what options for buying or selling are available for you.
Remember, For Your Real Estate Dreams … Don’t Get Antsy, Just Call Nancy!