Tampa Bay real estate market heats up
After a prolonged slump in housing, rising prices and bidding wars are back in the Tampa Bay area.
The Florida Realtors trade group said today the number of single-family homes sold rose by 17.4 percent in March in the Tampa-St. Petersburg-Clearwater area, when compared with the same month last year. Prices, too, rose by 20 percent over the past year, with a median home price of $144,049.
Condo sales were a little more subdued, with just a 1.7 percent increase in sales over the year. Condo prices, though, rose a more impressive 15 percent last month to a median price of $92,000.
Big, out-of-state investment groups are behind much of the real estate surge. Firms such as New York-based Blackstone Group are buying thousands of homes in Florida for cash, many of them foreclosures, and forcing buyers who actually want to live in the homes to outbid them.
For example, 48.4 percent of all purchases last month went to cash buyers, many of whom were likely investors. In a more normal real estate cycle, 15 or 20 percent of purchases would be done using cash, Florida Realtors economist John Tuccillo said.
That’s good for local real estate brokers, who are grateful to have a glut of buyers. But, Tuccillo would prefer to see more Florida families buying homes. In several years the investors will likely put thousands of homes back on the market for sale, which could depress prices.
“It’s positive for the short term,” Tuccillo said of the investor boom. “But it is a risk for the long term to have all these investors. I worry about what happens when.”
The Bay area’s housing market is hotter than the state overall, according to Florida Realtors data. Where sales rose by 17.4 percent in the Bay area, they rose by just 9 percent statewide. And, the Bay area’s 20 percent bump in median sale price outshined the state’s 15.2 percent bump.
Local sellers are still fetching relatively low prices, though, when compared with other major Florida regions. For example, in metro Miami, Jacksonville and Orlando the median sale price last month was $240,000, $161,000 and $159,000, respectively.
Also, prices in the Bay area are still nearly $80,000 less than where they were in 2006. In March of that year the median sale price for the Bay area was $222,800.
Local real estate professionals say their biggest problem these days is finding houses to sell.
Dale Hunter, who owns a Tampa real estate firm called Vanguard Real Estate, said he sometimes gets offers on homes within hours of listing them for sale. The sales go through quickly, he said, because the investment firms pay with cash and don’t have to wait for financing to come through.
“They’re good offers, they’re cash offers,” Hunter said.
One problem emerging from the hot real estate market is a tie-up in some home appraisals. Appraisals may not be able to keep up with the change in home prices.
For example, a home that sold for $100,000 in January might fetch a price of $110,000 today. But an appraiser might value the home at only $105,000 based on the best available statistics, said David Donaldson, a senior loan originator at VanDyk Mortgage.
That mismatch between appraisal and sale price can hold up a sale, he said.
Nevertheless, Donaldson was bullish on real estate. Interest rates are low and home prices, while rising, are still low.
“It’s a fantastic time, and anybody that does not own a home, should be trying to buy one,” he said.