On a warm summer’s evening, on a train bound for nowhere I met up with… Are you a gambler, high risk taker? If not, why would you stake one of your largest assets with a real estate agent with little to no experience. As experienced Realtors, we see examples of this day in and day out and the outcome is truly unnecessary. Optimistically you have teamed up with an experienced Realtor to provide justification to the current state of the real estate market and how to market your asset. Inexperience will cost you time and money in the transaction.
We had a listing appointment a couple of months back where all the data pointed to a pricing strategy in the $350k to $375k range, but it didn’t agree with what the Seller’s wanted to receive and they kept interviewing agents until they found someone who would list at their price point. Although none of us have a crystal ball in pricing, Agent X listed the property at a 30 percent inflated price point. Can you guess what occurred next, half a dozen price declines, days on market approaching three months and the property still isn’t under contract. At this point in time, any potential buyer is concerned something is amiss with the property. Had Agent X priced the property closer to the anticipated range, it would perhaps be under contract and may have had multiples offers, but instead the Seller will either take the property off the market or accept an offer substantially less than the original pricing strategy. Pricing higher to give the Seller more room to negotiate is a fallacy. The given market will determine the prevailing price.
Crossroads… the real estate market has a new “old” normal coming back. So, what does the new normal consist of? Days on market or how quick a seller receives an acceptable contract offer will start averaging about 35 days, which will seem to be an eternality. Inventory of homes will continue volume escalation; the buyer gains a slight advantage in the process. Contract prices as a relation to list price will decrease in the range of 95-96 percent.
Although mortgage lending rates have not peaked yet, the qualified buyer will secure rates in the low to mid 6’s. During the 1990’s the rates fluctuated from 6.5 percent-8.5 percent, in the early 2000’s it oscillated between 5.5 percent -7 percent which I think will be more of the scope going forward. Left to its own merits, the supply demand model will correct itself over time. So, it’s extremely important to gain the correct pricing on day one.
As we continue to look at the Plant City housing data, August-2022, our market area sold 89 homes, about a 10 percent increase from the previous month while the year over year numbers were down 24 percent and year-to-date up 4.7 percent.
The average selling price per square foot was $204.41, which accounted for a 0.2 percent decrease over last month, but when compared to the year-to-date average it accounted for a 2.2 percent gain. The average selling price was $352,877 in August or a 6.2 percent decrease over last month and compared to the year-to-date average it amounts to a 2.4 percent decrease. Now it’s hard to define the trendline, but it appears that our market peaked in May and has starting to decline slightly. One of the factors of the supply demand model, with higher interest rates for mortgages you tend to see prices decline in relevance.
The active inventory increased for the fifth month in a row, August had a five percent increase or 2.29 month’s supply over July and 59 percent increase Year-to-date. We are gaining ground on the equilibrium of four-six month’s supply levels.
Comparing the Median prices month over month data, August finished with a Median sales price of $340,000 which was 9 percent less than July’s number and flat year-to-date.
The average days on market (ADOM) for August was 23 days, a 23 percent increase over July’s 18.7 days and 109 percent increase Year over Year (YoY).
Lastly, in a recent real estate media article the writer highlighted 4 items: Slowdown, Correction, Recession and Collapse. The most negative is market collapse, the experts agree we are no where close to that, basically in part due to the new lending regulations that buyers must qualify to obtain mortgages. Recession: The organization informally defines a housing recession as six months of straight decline in home sales, which our community hasn’t had, but that is too simple an explanation since there are so many more moving data points to consider. As for Slowdown and Correction, I would group these two items together and say the law of supply and demand is taking shape here. Although we will never reach absolute equilibrium, these different variables are making movements to correct themselves over time.
AS always, if you are in the market to buy or sell your home … seek out an experienced professional realtor to assist you in this transaction process. There are too many consequences to go it alone without proper representation. If you have any questions, please reach out.
M Crawford Crawford Group
Sales Snapshot
The following residential properties were a sample listed as sold on the Greater Tampa Realtors Association MLS in August 2022 for the Plant City Market Area.
The home at 4505 Airport Rd sold August 23 for $140,000. Built in 1957, it has 4 bedrooms, 2.5 bath and 1298 square feet of living area.
The home at 3002 Holloway Rd sold August 29 for $150,100. Built in 1958, it has 3 bedrooms, 1 bath and 768 square feet of living area.
The home at 908 W Tever St sold August 4 for $200,000. Built in 1949, it has 3 bedrooms, 2 bath and 1400 square feet of living area.
The home at 1202 W Ferrell St sold August 17 for $230,000. Built in 1950 it has 3 bedrooms, 1.5 bath and 1180 square feet of living area.
The home at 815 Ashentree Dr sold August 31 for $275,000. Built in 2015, it has 3 bedrooms, 2.5 bath and 1594 square feet of living area.
The home at 602 W Cherry St sold August 18 for $280,000. Built in 1912, it has 3 bedrooms, 2 baths and 1772 square feet of living area.
The home at 4715 N Dawnmeadow Ct sold August 31 for $335,000. Built in 1986, it has 3 bedrooms, 2 bath and 1304 square feet of living area.
The home at 3553 Coastal Dusk Dr sold August 29 for $369,990. Built in 2022, it has 4 bedrooms, 2.5 baths and 2584 square feet of living area.
The home at 2907 Aston Ave sold August 28 for $400,000. Built in 1991, it has 4 bedrooms, 2 baths and 2284 square feet of living area.
The home 3409 Walden Reserve Dr sold August 9 for $425,000. Built in 2014, it has 3 bedrooms, 2 baths and 2200 square feet of living area.
The home at 1204 Spotted Lilac Ln sold August 29 for $450,000. Built in 2013, it has 3 bedrooms, 2 baths and 1903 square feet of living area.
The home at 3512 Regner Dr sold August 25 for $505,000. Built in 2007, it has 4 bedrooms, 4 baths and 2901 square feet of living area.
The home at 3021 Leila Estelle Dr sold August 31 for $575,000. Built in 1991, it has 3 bedrooms, 2.5 baths and 2582 square feet of living area.
The home at 7205 Big Buck Ct sold August 3 for $610,000. Built in 2000, it has 4 bedrooms, 3 baths and 2269 square feet of living area.
The home at 2461 W Sam Allen Rd sold August 29 for $639,500. Built in 1986, it has 3 bedrooms, 3 baths and 2441 square feet of living area.
The home at 1902 Sweet Bay Ct sold August 5 for $650,000. Built in 1985, it has 5 bedrooms, 4.5 baths and 4373 square feet of living area.