Market Update: COVID-19 & Tampa Bay Area Real Estate

How is the COVID-19 crisis affecting
the Tampa Bay housing market?

Over the past several weeks I have spoken to many concerned clients & friends with questions about what is happening in the real estate market, regarding the COVID-19 health and economic crisis. Understandably so, since just a few short years ago the entire nation experienced a catastrophic meltdown of the housing industry & economy unlike any we had ever seen since the 1929 Great Depression. Our experience written in this blog offers a “Boots-on-the-ground” perspective, direct from the day-to-day real estate frontline through the past 14 years of ups and downs in the market.

Yes, this is a lengthy blog, and I hope you find it valuable. Real estate is complicated, and it important to understand the dynamics that do and do not affect the market. Read on if you are ready to learn more!


Is the real estate market going to crash like 2008?

This is not 2008.

The current market conditions are not the same as 2008, and we will show you what we see as the difference makers throughout this blog. This health and economic crisis with COVID-19 is a fluid situation, and none of us know exactly what the future holds, but we can find important vital clues when we look to the right resources. We are sharing our research and perspective to help us all understand our current reality, and to discover more clues that point to our collective future, as we move forward and through this troubling time.
 
As of April 11, 2020, the Tampa Bay market has remained healthy and stable with a steady stream of Sellers who can expect multiple Buyer offers on the majority of correctly priced homes. Buyers have it good also, with historically low interest rates their buying power remains strong, and the Tampa Bay Area is still affordable compared to many other metropolitan cities.
 
Even after massive lay-offs and a looming health crisis, here is why the market seems to be mostly unaffected

The Tampa Bay Area Real Estate Market:

PAST, PRESENT, & possible FUTURE

The Past is not Repeating. Dynamics will make the Difference

Workforce Dynamics- Expansion and growth to the Bay Area have been in full swing for at least 5 years. The increase in housing demand now not only includes Baby Boomers, but the even larger demographic population of Millennials moving here to fill the high demand for workforce labor.
 
Market & Economic Dynamics- Florida, and especially the Tampa Bay Area, have been growing, even with many labor shortages. Businesses have begun to move here in larger numbers because of our tax incentives, workforce talent, affordability, and quality of life incentives further increasing demands for housing.

More Lessons from the Past & Present

We are sure that we can expect recessionary ripple effects throughout our national economy, and there are also many reasons why this real estate market is not the same as 2008. The high demand and low supply in 2020 are part of the reason. This and the following differences below are factors to consider that should help us overcome, and completely avoid obstacles that hindered our recovery 12 years ago:
  1. By 2005 the market was likely over supplied, yet large national builders continued to build, fueled by the large speculative investor market, not true home-owners. This means more homes were built faster than there were Owner-occupants available to fill them. Speculation in the investor market was the driving force in the 2008, resulting in the bubble and crash. High supply of houses, and low buyer demand.
  2. Today, Lenders have more restrictions and regulatory safeguards, bringing checks and balances that are more thorough in validating a buyers ability to pay. “Straw Buyers” (fake buyers) are all but a thing of the past. 
  3. Baby Boomers are now competing for housing with Millennials in their 30s who were not a part of Buyer demand in 2008. Demand is at an all-time high and supply is at an all-time low further increasing the pressure on the current market.
  4. Land Development was all but halted during 2008-2012 creating a disruption (gap) in the natural flow of new housing supply into the market, further restricting the current supply chain. (Think the 2020 toilet paper shortage, on a much larger scale) 😄
marketupdate01photo_1_original

Check the Facts. Market Indicators Tell a Story

We must look for market indicators that leave bread crumb trails to our future possibilities. The current low housing supply is one of those big clues. The indicators point to a stable strong market, even in the midst of some recessionary & economic impacts. For example:
  1. For the week of April 4-10, 2020, the MLS Market Activity Report shows little to no change from previous months in Hillsborough, Pinellas, Pasco Counties. See statistical graphic.
  2. Even today, we are still in a fastmoving market where an average of 60% of homes for sale are under contract in under 30 days (often within 1 week).
  3. Only 2-3 months average home supply (extreme Seller’s Market) has continued to be commonplace in price points under $550,000 for the past 4 years. Anyone can verify this by watching the majority of home listings quickly go pending, many times within a matter of days, and with multiple offers.   
  4. Remember, not all businesses were affected equally. There are many businesses that are experiencing massive growth, and they are hiring in large numbers.
external

The Future: What does the future hold for home prices?

Food, clothing and shelter are some of our most basic needs, I can’t think of anyone who disputes this. Housing availability, especially affordable housing, have been at all-time lows for years now. Based on all the research and evidence thus far, the high demand for housing will continue to keep our market strong and stable.
 
That said, then the questions still remains the same –  Is the timing right for you to consider purchasing own your own home? Or are you ok with someone else owning it? Either way you will be living somewhere… paying either your mortgage or another’s mortgage as rent. 😃
 
Over the next several months I will be closely watching the real estate market, and will share more insights from our experience as we move through this shift.
 
Through our years of experience, and over 400 successful property transactions we continue to assist Sellers and Buyers in one of the largest financial transactions of their lives. We have also worked with many clients who have been through very tough circumstances, where correct information was vitally important, so they could make crucial decisions for the welfare of their families. If you have any questions you want to discuss, or topics to add to these blogs, please contact me anytime.

Ready to Sell or Buy? Contact Us!

(813) 812-4309

We have safe and effective procedures in place to help clients Buy or Sell their home. We are compliant with the current CDC rules for social distancing and healthy practices. Let us show you how we can help you reach your goals.
 
Helping our clients understand today’s market, with straight talk and a common sense approach are how we do business. No drama and no pressure. Ever. We are happy to help!
 
Sources:
Keeping Current Matters:  www.MYKCM.com
Stellar MLS- Stats for Hillsborough, Pinellas, & Pasco Counties:  www.mfr.mlsmatrix.com

More Questions? Ask me!

kristina-volgenau-cFCmhbrQXmE-unsplash

Share this post