Before getting into what may lie ahead in 2014, let’s look at how 2013 ended up.
Sales in December were slightly down from December 2012 which was the 3rd month in a row where sales were lower than the same month in the previous year. However, each of those 3 months were higher than in all previous years back to 2007 except for 2012. This indicates a slowing of the pace of sales but without an overall significant drop.
Inventory dropped slightly from November even though the number of listings coming on the market increased a little because the number of sales in December also went up. The increase in sales during December from November is a pretty standard trend each year, but typically the number of new listings in December are less than in November so this indicates that the trend of more sellers coming back into the market is continuing. This should help stabilize the level of inventory and make things easier for buyers while stabilizing prices. All in all it shows we are moving toward a more normal, balanced market.
The final chart is the annual sales chart for Pinellas County residential properties. This shows that the local market started to reverse the downward trend in 2009, started to pick up the pace of sales in 2011 and has shown strong increases since then.
Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru November 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.
Looking Ahead to 2014
I’m basing my ‘predictions’ on what the graphs are showing and what I’m experiencing in the way of seller and buyer interest but what will actually happen can be affected by outside factors as we saw in 2008.
I think that sales will still be strong in 2014 but that we won’t see the type of increases we have since 2009. Large-scale investors are either reducing their purchases or moving out of our local market due to increased prices so most sales will likely be people moving into the area, buying a retirement or 2nd home/condo and people moving from a rental or to a larger or smaller home.
There is an increasing interest in buying by non-investors but with the large scale investors reducing their purchases we will likely see only a small overall increase in sales if any.
With prices having increased significantly, more sellers will put their properties up for sale. Many have been waiting either until they were no longer underwater or until they could get what they felt was an acceptable price. We’re now at a point where more sellers can accomplish that.
In addition, banks are pushing more foreclosures through faster so we should see more coming on the market but I have seen in the past year that these are being listed close to the price that a similar, non-foreclosure property would be listed at.
There are already less short sales and there will continue to be a lower number of these available than in past years due to banks going faster to foreclosure and more homeowners gaining equity. However, there will still be many people who should do short sales to avoid foreclosure but they will not be getting as much attention (although I will still be doing whatever I can to reach and help people in this situation).
Prices should stabilize and show single digit increase as opposed to the double digit increases we saw last year. I think we will hold the gains we have seen but won’t see dramatic increases. During the Spring months there is usually very strong buyer activity and Mar-July often see the highest price increases, but since we had very big increases last year during that time I still think the increases in those months will only be in the single digits as compared to the same time last year.
The law that went into effect in October created some very negative effects, ones that weren’t anticipated by those who wrote and passed the law (but that is pretty common). There has been a lot of pressure on Congress to do something to fix this and I think that in the first quarter of the year there will be a delay passed so that this can be studied further.
Will all these things happen? We’ll find out as the year unfolds.