PINELLAS PARK — When house hunters Jim and Rhonda Bennett fell in love with a new home, they put in a good offer and stopped their search. Back in 2000, it had taken a week to buy their first home. How long could it take now?
That was four months, seven rejections and 100 homes ago. Their search has become a slog. And all for a goal that has become surprisingly hard to find: an affordable family home.
"If I had $3 or $400,000 to spend on a house, it would be so much easier," said Jim Bennett, 48. "But in our price range? My wife's online for two hours every day after work looking for something new. She dreams about it at night. It keeps her up."
The Bennetts are among thousands in Tampa Bay caught in a tale of two recoveries: one for wealthy buyers who can afford pricier homes, pay cash or easily get loans, and one for everyone else.
A Tampa Bay Times analysis comparing the number of sales year over year for the six months ending in April shows the dramatic trend:
• Homes priced above $500,000: Up 14.97 percent.
• $250,000 to $500,000: Up 7.6 percent.
• $125,000 to $250,000: Up 1.9 percent.
• Below $125,000: Down 13.2 percent.
That shift is important because a healthy housing market — and a thriving local economy — depends enormously on the middle class, which still accounted for about 80 percent of the 16,000 homes sold.
Their spending ripples through layer after layer of the economy, from movers and remodelers to appliance makers, and their confidence after moving up or finding a first home can influence their financial decisionmaking for years to come.
But the Tampa Bay housing market, which an index of mortgage giant Freddie Mac recently called one of the nation's weakest, still shows few signs of rallying for anyone but the upper crust.
"There are haves and have-nots," Glenn Kelman, CEO of online real estate brokerage Redfin, told CNBC, "and the haves are the ones out buying."
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So what's knocking down wanna-be buyers?
Most middle-class hopefuls earn wages that have stagnated as median home prices, now at $160,000 in Tampa Bay, have grown year over year for 29 months in a row. Interest rates for a 30-year fixed mortgage climbed in recent months to a full percentage point over the year before.
Many hopeful buyers never get that far. Banks imposed super-strict guidelines for new loans after the housing bust, blocking buyers with old debts or weak credit from qualifying.
"The pendulum has swung from 'Can you fog a mirror? You're approved' to 'Not unless you're sparkling clean,' " said Brad Monroe, a broker associate with Pangea Realty Group. "If you don't fit the profile, if you're a little out of the norm, you're going to have challenges."
Upscale buyers with steady incomes or fat bank accounts are insulated from rising prices, brokers said, and banks are eager to win their business with jumbo loans. Other moneyed shoppers are able to skip financing altogether: Forty percent of Tampa Bay home sales in the last six months were closed all in cash.
Buyers in the market for midpriced homes must comb through supplies that are intimidatingly tight. Some potential sellers aren't listing their homes because they still owe too much in mortgages, or don't realize their homes gained value and that they're no longer underwater.
Other prospective sellers don't list their homes because they are worried they won't be able to find their next one, creating a self-perpetuating trap one economist likened to musical chairs.
Homes "are going very quickly, and they're very competitive," said Kelly Lee McFrederick, a Re/Max broker associate in St. Petersburg. She recently visited one home priced around $200,000 that was on the market for three days. "Right when we put our offer in, two others came in, and we were definitely outbid."
Middle-class buyers are also more susceptible to costly housing surprises, like the recent end of a mortgage-forgiveness tax break for distressed sellers and sharp spikes in flood insurance rates.
"The flood insurance stuff really hurt the average Joe. That doubling or tripling of rates, even the risk of that, was a game-changer," said Andrew Duncan, a Re/Max real estate broker in Tampa. "But it didn't impact the high end. The guy who buys a $1 million house, a $2 million house? That's not going to make a dent in that guy's lifestyle."
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The gulf between the top tier and everyone else is not just a Tampa Bay dilemma. Nationwide sales of homes above $1 million jumped 8 percent year over year in March, National Association of Realtors data show, while those costing $250,000 or less — about two-thirds of all American homes — plunged 12 percent.
But our housing market in particular is a showcase for the growing wealth gap. Researchers at Redfin, the online brokerage, last week called Tampa Bay one of America's "most unequal metros" because the top 1 percent of homes, starting at $900,000, sold for more than six times the price of a median home — a disparity even greater than San Francisco or Washington, D.C.
Spurned middle-class buyers often opt to rent, dragging local home ownership to record lows. That's spooking home builders, who census data show have filed permits to build single-family homes here at a lower level than the previous year for eight months straight. The homes that do get built are often priced for the elite: The average new home permitted in April was valued at $298,000.
It's not certain when or how the middle-class backslide will end. Wage growth would help. So would an increase in lower-priced listings. More supply could stabilize prices, but that would require skittish homeowners to get off the sidelines and list their homes for sale.
So far, that's not happening. The Realtors' pending home sales index, which tracks signed contracts and gives a good idea of future deals, dropped again in the South in April to 6 percent below last year. Federal Reserve chairwoman Janet Yellen told Congress last month that "the recent flattening out in housing activity could prove more protracted than currently expected."
As for Jim and Rhonda Bennett, the hopeful home buyers in Pinellas Park, they sold their home a few months ago but have been renting it back from the buyer, hopeful they'll find something soon.
They're ecstatic at the idea of an upgraded kitchen, a bigger back yard and more room for their 7-year-old daughter, Savanna, to play.
Just as exciting? Not having to look at another home any time soon.
Drew Harwell can be reached at firstname.lastname@example.org or (727) 893-8252.