A key metric we like to monitor when looking at the health of the Tampa Bay real estate market is the Month’s Supply of Inventory (MSI). The generally accepted benchmark for a healthy market, one that favors neither the seller or the buyer, is 5.5 months supply of inventory. Anything higher than that would be considered a buyer’s market, anything lower – a seller’s market.
So how is MSI calculated?
You divide the current inventory in the market by the 12-month average of monthly closed sales. By dividing by the average of monthly closed sales, we eliminate seasonal effects such as the busy spring selling season or the slow winter season.
Looking at single family homes in Hillsborough County for the month of April 2017, we are currently at a 2.7 months supply of inventory. What this means is if no new single family homes were listed for sale in Hillsborough County, the current supply would be depleted in only 2.7 months!
Looking at the chart above you’ll notice that we have been at or below 3 months supply of inventory for the past 12 months. In fact, check out the chart below and you’ll see we’ve been at or below 3 months supply since around September 2015!
So what does this mean for you if you are looking to buy or sell real estate anywhere in Hillsborough County?
With the steady low inventory over the past few years, seller’s are still in the driver’s seat. This means there are more buyers in the market bidding on the same limited supply of housing available. Simply put, this is still a great time to sell! We are seeing multiple offers on a daily basis on listings, especially those in highly desirable parts of Hillsborough County.
Now this isn’t all bad news for buyers. What it means is you need to be sure to align yourself with an experienced real estate professional skilled in negotiation, listening to your needs, identifying the right property for you, and moving quickly on it. It is also another reason why it is vital that buyers get pre-approved by a reputable lender so the pre-approval letter can be submitted with your offer. When it comes to multiple-offer situations, showing the seller you have the financial ability to close on their home goes a long way!
Have more questions about the market or looking to sell or buy in Tampa Bay? Reach out to one of our associates or email our office at connect@DiscoverYourPlace.com.