The local 2016 real estate market may not have been as annoying/frustrating/awesome/disgusting/exciting (depending on how you viewed it) as the election, but it was still newsworthy nonetheless.
Sales increased for the 8th straight year, prices rose and inventory remained too low. None of that was too newsworthy except for the fact that we are continuing to see a strong market for the past few years and despite the fact that we still have too few properties for sale to meet the demand we are continuing to see an increase of sales each year.
There was something unusual that happened in the last 2 months of last year – normally November sales dip and December sales jump but in 2016 there was a significant spike in November sales and a slight dip in December sales. Could this have to do with the election? Yes. Does it matter in the overall scheme of things? No.
One thing I did notice this year was that as prices rose the length of time it took to sell properties started increasing. I’ll keep an eye on that this year as it will affect how to properly price a property when listing it.
Another factor which changed this year, toward the end of the year, was an increase in interest rates for home loans and is likely the first of several that will occur over the next few years. This happened following the election and was about a half percent jump. That small of an increase should not slow down this market and it may actually have an effect of increasing sales since buyers who have been on the fence often decide to get into action when interest rates go up because they anticipate more increases coming and don’t want to wait for any more to happen. That will likely be a positive effect on the market. However, as interest rates increase so do monthly payments which means that affordability will start decreasing and that usually puts a damper on value/price increases for properties. This means sellers who have been waiting should decide soon whether or not they are going to sell in 2017 and, if the decision is to sell, then get things rolling as soon as is feasible.
The first chart below shows the annual overall residential sales in Pinellas County which shows yet another year of growth in sales – the 8th consecutive year! The following charts show November’s sales and inventory levels (click or tap on any chart to see if full-sized):
(Information for the charts was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru November 2016. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.)