A few years ago sellers were desperate here and in many other formerly hot markets. Eighteen to twenty month supplies of homes were common. No more. The current supply of single family homes is down to fewer than four months. In parts of the Bay it is down to a mere three and a half months of inventory.
There are many factors at play. Employment is increasing, distressed sales are decreasing and prices are going up. What is often overlooked is that these factors are both cause and effect. Nothing is more elastic than real estate prices. When demand goes up, so do prices. When employment increases, more people want to own. When prices go up, many who were underwater or were waiting to an improved market before listing decide to act. These factors are now working to reinforce and continue this market shit.
As you would expect, the statistics confirm the end of what was one a buyerÃ¢â‚¬â„¢s market. Sales for October of this year increased by 35% compared to last October.Ã‚Â The median sales price rose 9% over the same period. Distressed sales, foreclosures and short sales, accounted for no more than 40% so far this year.
In the more sought after neighborhoods, multiple offers and bidding wars are occurring once again. Many transactions are cash sales. The demand has been so strong that should a home fail to appraise, the seller is apt to cancel the contract and wait for a new buyer. Unless, of course, the difference is bought to the closing table by the original buyer. And buyers have been willing to make up the difference between the contract price and the appraised value in cash.
Many buyers, particularly those moving to Florida from out of state, are unprepared for this change in the market. For so long the news has reported that Florida suffers from a significant housing glut, the lack of inventory comes as a total surprise. Educating the buyer has always been important. But it is critical now that the market has sifted so suddenly.
For more of the statistical background, please refer to the following article published November 12, 2012, in the Tampa Bay Times: http://www.tampabay.com/news/business/realestate/buyers-snap-up-homes-bumping-up-tampa-bay-prices/1261154