Inventory continues to rise, which is an unusual trend for this time of the year. The number of available homes hit a record high, up 137% with 572,000 single-family homes on the market as of Oct. 21, compared to March of this year when inventory bottomed out.
“Usually by this time of the year, we have fewer new listings, and some sales still wrapping up from the summer, so inventory typically falls… but not this year. There is so little buyer action that even with 20% fewer new homes hitting the market each week, inventory is still climbing,” said Mike Simonsen, the CEO of Altos Research.
“Demand is weakening as mortgage rates surge while housing inventory for sale is on the rise, meaning further large price falls are probable,” said James Knightley, chief international economist at ING. “Bad news for new homeowners, but it can help to get broader inflation lower quickly.”
The latest S&P CoreLogic Case-Shiller 20-city house-price index report finds continuing gains, but the rate of those gains is slowing across the U.S., due to the Fed’s interest rate hikes that have made mortgages more expensive and homebuyers more skittish about committing to a purchase.
Yesterday, November 2, the Fed raised rates by another 3-quarters of a point. In December, rates are expected to rise by another half a point, and will likely continue to increase in 2023.“The problem is by raising rates so much and so quickly, the chances of driving the economy into a recession keep getting higher. At this point, I strongly suspect that we’ll have a recession sometime in the middle to late 2023,” said Elliot Eisenberg, GTR’s Consulting Economist. Watch the full October 2022 Tampa Bay Housing Market Update.
Over the course of time, real estate has been seen as a hedge against inflation, but why is that, especially with house prices declining? Florida Realtors® takes a closer look in their recent article, Why Price Drops if RE Is an Inflation Hedge?
In other news, after an order was called to have the Hillsborough County transportation tax proposal removed from the November ballot – it has been added back and you will be able to cast your vote on the November ballot.
Join GTR for the Tampa Bay Water Webinar on Monday, November 21st at 10 a.m. to learn about our area’s long-term master water plan, current and future drinking water sources, and conservation efforts. Register today.
