Monday, November 19, 2018
Real Estate

If it’s a sellers’ market, why are so many Tampa Bay sellers cutting their prices?

Despite a shortage of available homes, many Tampa Bay sellers are getting a rude awakening when the sign goes up but no offers come in .

More sellers are being forced to drop their prices as the reality hits that buyers don’t love that funky tile or purple accent wall.

According to a new analysis by Zillow, two-thirds of the nation’s largest housing markets — including Tampa Bay — had more listings with price cuts than they did a year ago. In just the seven days ended Wednesday, prices were reduced on nearly 1,300 single- family homes in the four-county bay area — 11.5 percent of all listings. Many of those already had dropped in price and some are in especially hot markets like Tampa’s Seminole Heights and St. Petersburg’s Crescent Lake area.

The problem: Sellers assume that a hot market means they can get top dollar for their home.

"Everybody thinks their house is the greatest on the planet," says Judson Kidd, an agent with Southern Roots Realty in St. Petersburg. "But there is so much differentiation between one side of the street and the other, between one house and another."

One reason so many homes are overpriced is that so many real estate agents are competing for so few listings. In the past two years, more than 60,000 people have gotten Florida real estate licenses yet the supply of homes for sale is at its lowest level in more than a decade.

RELATED: Homes sales drop, price increases slow in most of Tampa Bay in July

MORE: Go here for more Business News

"A lot of agents will price where the seller wants just so they can stick a sign out front," Kidd says "Then maybe somebody from out of town will blow in and pay that ridiculous price."

Or maybe not.

"Overpriced homes stay on the market longer and sell for less than homes that are priced correctly to start," says Jennifer Zales, a Coldwell Banker agent in Tampa. "It is important to act quickly and consider a price reduction early in the listing period. The number of buyers viewing a new listing drops significantly after the first few weeks so don’t wait to take action."

Charles Richardson, Coldewell Banker’s senior regional vice president, analyzes market trends to help Zales and other Coldwell agents. He says he’s found "an amazing number" of price cuts at almost every level, whether it’s houses over $1 million or under $300,000.

In Hillsborough County in July, for example, more than half of all single- family homes for sale had undergone price "repositioning" in the past 60 days. Of houses listed between $150,000 and $300,000 — so much in demand there is only a two-month supply — 70 percent had dropped in price.

"You’d think that just because there are a lot more buyers than sellers, they’d be falling all over themselves to buy property, but until it’s price well, they will not,’’ Richardson says.

During the real estate bubble of 2000 to 2007, buyers snatched up homes at ever soaring prices on the assumption they would continue to appreciate in value. Of course that turned out to be wrong, and the 2008 financial crash sent prices plunging by half or more.

In early 2013, prices started to climb again and now have reached pre-crash levels or higher in some parts of Tampa Bay. This time, though, buyers are starting to push back.

"Venetian Isles is a prime example," Kidd says of the waterfront community in northeast St. Petersburg where prices have skyrocketed. "Sales have (almost) ground to a halt because of the price appreciation that is coming out of nowhere."

In the first six months of 2016, the median price of houses sold in Venetian Isles was $641,000. Not a single house went for more than $1 million. In the first six months of this year, the median price was $745,000 and four homes sold for more than $1 million.

Currently, 14 Venetian Isle houses are for sale, with six listed between $1 million and $4 million. More than half of the houses have had price reductions yet still haven’t sold.

Kidd recently worked with a buyer from California — no stranger to staggering home prices — who looked in Venetian Isles but decided that even the reduced prices were too high. He ended up paying $625,000 for an upgraded waterfront house in nearby Ponderosa Shores.

As a rule of thumb, Kidd’s firm suggests that sellers drop the price 10 percent if they haven’t gotten an offer in 15 days and 20 percent if there are no offers in a month.

"But you’d be surprised how much they are initially, ‘No, no, no, this house is worth it,’" he says.

Among the homes that tend to be priced the most unrealistically at the start are FSBOs — For Sale by Owner.

"If you follow them on Craiglist, you see a lot more price reductions than you do on listed properties," says Jack Keller, a veteran St. Petersburg agent. "For sale by owners don’t have the expertise of a Realtor guiding them on what their beginning price should be."

Even at a time when homes are in relatively scant supply, sellers need to remember that buyers are savvier than ever, real estate experts say. Through online sites like Zillow, Trulia and others, they can pretty well scope out a house without ever setting foot in it. They can also compare houses, prices and sales figures more easily than they could even a decade ago.

"With all the information on the internet, buyers are highly educated today," Richardson says. "They are not going to pay more than what the property really should be selling for."

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

   
Comments
Safety tips for Realtors: forget the taser and spike heels, always follow, never lead a client

Safety tips for Realtors: forget the taser and spike heels, always follow, never lead a client

ST. PETERSBURG — Chips Wells, crime prevention specialist for the St. Petersburg Department, has daughter who’s a Realtor. Among the advice he gave her: Forget the spike heels when showing a house to a stranger. "I want you to wear shoes...
Published: 11/09/18
Hotel developer closes on block next to Tampa City Hall for Hyatt project

Hotel developer closes on block next to Tampa City Hall for Hyatt project

TAMPA — HRI Properties has closed on its $7.6 million purchase of a city-owned block next to Tampa’s City Hall and says it plans to start construction later this month on a dual-branded Hyatt Place and Hyatt House hotel project.In 2016, Tampa put out...
Published: 11/09/18
Have a household income of $59,000 a year? There might be an apartment in Water Street Tampa’s first residential building for you

Have a household income of $59,000 a year? There might be an apartment in Water Street Tampa’s first residential building for you

TAMPA — Water Street Tampa broke ground Thursday on its first residential project — a pair of apartment towers rising 21 and 26 stories with:• Floor-to-ceiling windows in every apartment that open onto balconies eight feet wide.• Roofs topped with ou...
Published: 11/08/18
Investor Ben Mallah pays $20 million for Holiday Inn Westshore

Investor Ben Mallah pays $20 million for Holiday Inn Westshore

TAMPA — Largo real estate investor Ben Mallah likes to say that while the other kids were out playing football, he was inside playing Monopoly.That hasn’t changed. Last week Mallah paid $20 million to buy the Holiday Inn Westshore, his second recent ...
Published: 11/05/18
As more shops open in St. Pete’s booming downtown, should Chamber of Commerce find a new home?

As more shops open in St. Pete’s booming downtown, should Chamber of Commerce find a new home?

ST. PETERSBURG — Shoppers can find an array of unusual and upscale items in downtown St. Petersburg:Purses made in Italy of genuine crocodile skin. Hand-enameled jewelry and Russian nesting dolls. Stiletto heels, slinky cocktail dresses and original ...
Updated one month ago
‘Zombie’ homes fading away in the Tampa Bay area

‘Zombie’ homes fading away in the Tampa Bay area

"Zombies’’ are gradually disappearing from Tampa Bay’s housing scene.As of the end of September, the area had just 410 zombies, or vacant homes in some stage of foreclosure, according to ATTOM Data Solutions. That was 6.7 percent of all homes in fore...
Updated one month ago
From bunkers to tunnels, Mafia history stirs underworld exploration in Ybor City

From bunkers to tunnels, Mafia history stirs underworld exploration in Ybor City

TAMPA — A real estate listing touts the features of a 2,068-square-foot home for sale on North 12th Street: Three bedrooms, two bathrooms, a basement, a courtyard with Mediterranean-style shed, and beneath the shed, "its own bunker."Welcome to Ybor C...
Updated one month ago
In second major deal, Water Street Tampa to pay $2.75 million for critically needed parcels of land

In second major deal, Water Street Tampa to pay $2.75 million for critically needed parcels of land

TAMPA — One business day after paying $13 million for the site of the ConAgra flour mill, the development company for Water Street Tampa on Monday got the green light to spend another $2.75 million more on land it needs for its finest hotel and talle...
Updated one month ago
Affordable housing ‘nearly impossible’ to build to now in Tampa Bay area

Affordable housing ‘nearly impossible’ to build to now in Tampa Bay area

Construction began on nearly 3,000 homes in the Tampa Bay area in the third quarter of this year but the new-home market shows definite signs of slowing down. Moreover, "truly affordable housing (is becoming) an impossibility in this market," a new ...
Updated one month ago
Water Street Tampa developers buy ConAgra flour mill for future expansion of their $3 billion project

Water Street Tampa developers buy ConAgra flour mill for future expansion of their $3 billion project

TAMPA — In a deal that will sweep away one of downtown Tampa’s last vestiges of heavy industry, the development company for Jeff Vinik and Cascade Investment on Friday paid $13 million to buy the ConAgra flour mill just north of their 50-acre Water S...
Updated one month ago