School’s out for the summer… where is our housing market going from here? Many thought we would be headed to a crash similar to the last market downturn of 2006-08, but we are nowhere close to a crash, quite the opposite. The Federal Reserve has been applying pressure with rate hikes in the treasury rates attempting to get the inflation down over the past 12-15 months. These rate increases have worked in slowing the inflation components; food costs, fuel, utilities, vehicle purchases, but housing costs seem to have bottomed in February and on the rise again.
Many would have thought mortgage rates more than doubling from the low three percentage rates of last year to the high 6.7 to 7.0’s would have stalled the housing market. Now in some areas of the US that has been the case, but in our central Florida area or Plant City our values continue to move up. Yes, when all the rate increases came, we peaked last May/June and had seven to eight months of slight declines, but those values bottomed in February and this May’s data numbers show we have surpassed the peak of last year.
People need housing, some may be downsizing, some may need more space for family growth, some may just be moving to the area with occupation change. While housing inventory is still at all-time lows in terms of supply, the demand for housing will keep prices moving up. I believe the new mantra is “marry the home and date the rate,” people are buying now and will be looking to refinance down the road when rates come back down. The house purchase is still one of the best investments one can make. Over the past 12 years, our area has averaged a 12 percent increase year over year return. Put another way; that 1,800 square foot three-bedroom, two-bath home purchased in 2011 for $116,500 is now valued at over $358,000.
So where do we go from here? Higher mortgage rates have not stalled the market. If the rates decline this summer in the high fives to low sixes, I believe we will be back into the multiple offer situations and increased property valuations. As a buyer, time isn’t on your side. As we look at the Plant City housing data, May 2023, our market area sold 93 homes for the month continuing to surpass the previous three-month average of 87 units per month. That number comprised of 15 new construction homes which should continue due to the new housing developments. Our housing inventory declined to 1.8 months’ supply, still considerably less than the three to four months average supply needed for a normal market period. Our ADOM, average days on market, last month was 32.8, about 10 days less than last month, which means homes are going under contract sooner.
We now have had three months of increases in the average sold price and average price per square foot of homes sold in Plant City. In May our average sold price was $391,151 a 2.2 percent increase over April, a 6.6 percent increase over the previous quarter, a 6.1 percent increase year-to-date and 2.9 percent over the previous May 2022 which happened to be the peak last year. When we look at average price per square foot, the percentage increases are even better; May 2023 – $228.65 per square foot, a 14 percent increase over April, an 18 percent increase over previous quarter, a 6.5 percent over the previous May 2022. This trend will continue and will increase substantially when the mortgage rates stabilize.
30-year average mortgage rates came in for the month of May at 6.49 percent but its still trending up for the time, the past week the rate was 6.79 percent but I believe the Fed may pause the rate increases this coming meeting in June which will help stabilize that component of the process.
So, what about the coming months? People will be buying and selling homes, prices have turned the corner and are rising again. We are progressing into the spring/summer buying season, typically we have the strongest buying demand during this time, with inventories low and the current lending rates will be the new norm. The supply-demand models will dictate the new market levels.
If you are in the market to buy or sell your home, please seek an experienced professional Realtor® to assist you in this transaction process. There are too many consequences, going it alone without proper representation. If you have any questions, want a market value analysis of your home, or see what’s available to purchase, 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 May 2023 for the Plant City Market Area.
The home at 709 E Alabama sold May 30 for $131,000. Built in 1959, it has 2 bedrooms, 1 bath and 735 square feet of living area.
The home at 3304 Hickman Ave sold May 3 for $195,000. Built in 1996 it has 2 bedrooms, 2 bath and 1011 square feet of living area.
The home at 1901 W Hunter Rd sold May 10 for $249,900. Built in 2019, it has 2 bedrooms, 2 bath and 1216 square feet of living area.
The home at 1203 N Ferrell St sold May 5 for $299,500. Built in 1953, it has 3 bedrooms, 2 bath and 1416 square feet of living area.
The home at 2211 Preservation Dr sold May 12 for $305,000. Built in 1992, it has 2 bedrooms, 2 bath and 1488 square feet of living area.
The home at 2804 Wilder Park Dr sold May 15 for $329,000. Built in 1994, it has 3 bedrooms, 2 bath and 1273 square feet of living area.
The home at 2741 Walden Woods Dr sold May 31 for $349,900. Built in 2011, it has 3 bedrooms, 2 bath and 1558 square feet of living area.
The home at 2601 Bridle Dr sold May 30 for $356,100. Built in 1990, it has 3 bedrooms, 2 bath and 2035 square feet of living area.
The home 7202 Whalens Hideaway St sold May 24 for $370,000. Built in 2017, it has 2 bedrooms, 2 bath and 984 square feet of living area.
The home at 1209 Wild Daisy Dr sold May 15 for $385,000. Built in 2018, it has 3 bedrooms, 2 bath and 1655 square feet of living area.
The home at 3105 Chitty Rd sold May 1 for $420,000. Built in 1976, it has 3 bedrooms, 2 bath and 1456 square feet of living area.
The home at 3886 W Capri Coast Dr sold May 12 for $472,980. Built in 2023, it has 4 bedrooms, 2 bath and 2162 square feet of living area.
The home at 1707 Charleston Woods Dr sold May 12 for $539,000. Built in 2001, it has 4 bedrooms, 3 bath and 2581 square feet of living area.
The home at 3301 Lampp Rd sold May 23 for $550,000. Built in 1990, it has 3 bedrooms, 3 bath and 1854 square feet of living area.
The home at 2895 Hammock Dr sold May 26 for $650,000. Built in 1994, it has 4 bedrooms, 3 bath and 2902 square feet of living area.
The home at 4909 Stanley Rd sold May 18 for $975,000. Built in 1979, it has 4 bedrooms, 3 bath and 2074 square feet of living area.