Wednesday, June 20, 2018
Business

Are stars finally aligning for Tampa Bay housing recovery?

The worst may be over for Tampa Bay's housing market.

The median price of a single-family home fell to $110,000 in January 2011, climbed steadily to $130,000 in August and has not dropped below $120,000 since.

"It's a clear indication that we have felt the bottom of the market," said Kevin Chadwick, a 30-year Realtor and owner of six Keller Williams offices with more than 400 agents in Tampa Bay. "The market is in the process of turning."

Craig Beggins agreed.

"I believe the market is turning," said Beggins, who owns Century 21 Beggins Enterprises in Apollo Beach, with more than 200 agents. "This is what we have been waiting for."

Real estate experts and economists believe the figures point to rising prices and increased sales, basing their optimism on the following:

• The inventory of homes for sale has fallen to levels not seen for years. The lower the supply, the stronger the market. The area has less than a six-month supply of unsold homes, meaning it would take about six months to sell the houses currently on the market. By contrast, Hillsborough County's unsold inventory peaked at 25 months in January 2008.

• Tampa Bay has added 36,900 jobs over the past year, and the state's unemployment rate continued a steady, yearlong retreat in 2011 by falling to 10 percent in November, reaching its lowest point in 2½ years.

• Real estate professionals see more people inquiring about putting their homes on the market. The owners are not in distress, and their houses typically sell faster because the homes have not been neglected.

"It's opening a whole new category of buyers," Chadwick said. "These people have been on the sidelines for four years waiting to sell. This is exciting."

University of Central Florida economist Sean Snaith said he is being a little more cautious in declaring that the housing market has turned the corner, adding, "It's definitely a possibility, but I'd like to see six months of consecutive gains."

Gains in prices and sales are good news in a state decimated by foreclosures and falling values since the housing market imploded.

Sales of single-family homes jumped 19 percent — 1,943 in November to 2,315 in December — in Hillsborough, Pinellas and parts of Hernando and Pasco counties, according to My Florida Regional Multiple Listing Service data.

Although lenders tightened borrowing standards, some sales could be attributed to mortgage rates hovering at an all-time low of about 4 percent.

As the inventory of unsold homes continues to drop to levels not seen in more than five years, median prices also climbed last month for all types of sales: short sales, conventional sales and foreclosures.

From November to December, median prices on short sales rose from $99,250 to $105,000; conventional sales, from $155,000 to $157,000; and foreclosures, from $66,900 to $69,000.

The Times reported last month that short sales jumped more than 25 percent in the bay area as banks steered away from foreclosures that now take about 806 days to wind through Florida's court system.

Lenders, Snaith said, need to deplete their supply of distressed properties in order for a full recovery to occur. As short sales move more houses, the best of them will get more offers, forcing buyers to pay more.

Ultimately, the very definition of a recovered housing market is higher prices.

"I think banks have now embraced this in Florida," Snaith said about short sales. "This helps the healing process along."

Tony Polito, a housing consultant with Tampa's Metrostudy, a national company that tracks the construction industry, said starts on new homes in the bay area also jumped 19 percent from the fourth quarter of 2010 to the same period in 2011. Closings rose 4 percent.

The low inventory and the job growth, Polito said, are the biggest reasons that the housing market is turning.

"We're right at the change point," he said. "There's a lot of positive signs that we're pushing further away from the bottom."

While at the bottom, the Sunshine State lost construction workers.

The jobs peaked at 94,800 in June 2006 — the height of the real estate market — and fell to a low point of 47,500 last October.

Scott Brown, chief economist with Raymond James in St. Petersburg, said home prices and sales should rise gradually, as long as the economy doesn't take on any major ripples.

"We have a long way to go before a full recovery, but we are on our way," he said.

Experts had predicted in 2011 that a tsunami of houses from the "shadow inventory'' would decimate the market. That inventory includes homes with mortgages 90 days late and nearing foreclosure or homes already seized by a lender but not yet listed for sale.

The shadow inventory no longer concerns some experts, as they believe the market can absorb the extra homes as banks release them for sale.

A healthy inventory supply is six months. The lower the supply, the stronger the market.

Hillsborough's housing supply peaked at 25 months in January 2008; Pinellas' at 18 months in March 2007. Overall, Hillsborough now has an inventory of 5.3 months for single-family homes. Pinellas is at 5.5 months.

Investors devoured lower-priced properties in 2011 as soon as they hit the market. With the supply so low, they have to chase higher-priced homes, Beggins said.

He added, "The sales prices have to go up."

Liane Jamason, an agent with Smith & Associates Real Estate, said potential buyers and sellers need to drown out that national chatter about the real estate market being in the doldrums.

"It's just not the case here from what I'm seeing," she said. "I'm having a harder time finding listings."

Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente.

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