It is evident that we are no longer in a Buyer’s Market. Home prices in the Greater Tampa area have increased by over 8% in the last year and the area’s inventory is the lowest it has been since record keeping on the statistic began. In addition to this, Florida has once again become an attractive destination for people from all over the world – a strong difference to the mass exit Florida faced in the mid 2000’s.
The Breakdown for Sellers
Many potential sellers are still wondering if the time is right to sell when the truth is; There Has Been No Better Time Than NOW. With inventory at an all time low, Sellers are seeing short days on market (DOM) and multiple offer scenarios on their properties. Homeowners saw a drastic reduction in their home’s equity in the past decade and the market may not have completely turned this around, but there is a reason for this. Just before the market collapse, home prices had been so inflated that home affordability saw a drastic hit. Home values were increasing drastically while the economy was failing and unemployment rates were climbing. It was inevitable that the market would be forced to stabilize; unfortunately on the backs of homeowners. Now, the market in our area seems to have it bottom and is currently in a more natural, healthy state producing a comfortable annual equity.
The Breakdown for Buyers
Just two years ago, a good interest rate was at 5.5%. Now, interest rates are sitting at a full 2-points less; 3.5%. This is an astonishing opportunity for Buyers. And although it is not a Buyer’s Market it is still THE TIME TO BUY. The key to a successful attempt at purchasing a home it today’s market is to be realistic by understanding exactly what you are up against. The days of sellers paying all of a Buyer’s closing costs are gone. The days of offering thousands less than the list price are gone. And the days of, ” I love this house but let me think about it before I make an offer” – are gone.
First and foremost a Buyer must be vigilant. With inventory at an all time low and with interest rates at an all time low, a Buyer will have strong competition on any home they hope to purchase. Offering the asking price and even, in some cases, a bit more than the asking price is a good starting point if the Buyer is serious about the home. The next thing a buyer must consider is the actual cost to purchase a home. Closing costs can run upwards of $7,000 on a $150,000 home and a Buyer must be prepared to bring at least some of that to closing. The good news: with interest rates as low as they are today, a Buyer can purchase a home worth nearly $50,000 more than a home they could have purchased two years ago. Interest rates have the largest impact on your monthly payment and directly affect the home price a Buyer will qualify for.