Gradual improvement in the housing market continues at a steady pace without government support. Six months after two consecutive years of tax incentives for buyers; starting in July 2008 with a $7,500 repayable first-time buyer tax credit, extending to a $8,000 non repayable first-time buyer tax credit in January 2009, and ending in June 2010 with the expanded credit to repeat buyers; the market has shown remarkable improvement from the initial drop this past July. With mortgage rates remaining near historic lows and home prices having generally stabilized, economists are expecting further strength in 2011.
Consumers are showing some signs that they’re feeling better: a significant boost in the food and services industry implies they are eating out more, vacations are back on the rise as spending on travel and tourism increased 8% in the third quarter, and household net worth has risen notably thanks to a strong stock market even as they continue to shrink their debt.
As the economy improves, current stimulus efforts by the government and the Federal Reserve Board are expected to gradually wind down, which typically means rising interest rates. Meanwhile, buyers continue to benefit from historically favorable buying conditions and sellers enjoy increased stability in the market.
Home Sales
Sales of existing homes in the Tampa Bay area were up in 2010. Comparing December 2009 with December 2010, closed sales were up 7%.
*Data from Mid Florida Regional MLS
Home Prices
The average list and sale prices were both down 5% over a year ago. However, increasing sales and decreasing supplies indicate a recovery that’s gaining a firmer footing. The market’s upward momentum, despite the absence of the tax credit, is a welcoming sign.
Inventory-Month's Supply
Inventory is down to 8.2 months of supply, a six month supply is generally considered the tipping point between a buyer's market and a normal market. In the 4th quarter of 2010 there was a moratorium on bank foreclosures which will likely distort 4th quarter results leaving the true market yet to be discovered this spring.
