Saturday, June 23, 2018
Business

Bidding wars break out over Tampa Bay area homes

Last month, Barry Barker put his home in New Tampa on the market. He expected it would take six months to land a buyer.

The house sold in six days.

Two dozen people toured the property, producing six offers. All of them matched or topped Barker's asking price of $225,000.

"That's what shocked me," Barker said Monday. "I had no idea that many people were looking for houses."

The sudden demand has sent real estate agents scrambling.

"People are desperate now for houses," said Tony Delgado, an agent with Homeward Real Estate in South Tampa. "It's a seller's market."

• • •

That's a phrase not uttered in these parts for years.

The housing crash and foreclosure crisis flooded the market with inventory as the recession and tight credit dried up the supply of buyers.

Recently, without much fanfare, the situation began to change.

Investors bought up a lot of bargain-priced homes available through short sales and foreclosures. An improving economy and record low interest rates sent regular buyers looking for houses in areas not saturated with distressed homes.

But owners in those areas were not putting up "for sale'' signs, continuing to assume that a depressed market meant they would not get a good price for their homes.

In short: Supply went down as demand went up.

"Folks have not caught up with what's going on," said John Tuccillo, chief economist at Florida Realtors. "This is kind of strange with the Florida market. It's tipping into a seller's market for portions of the state.

The Sunshine State's overall supply of homes has dropped from 11 months to 6 months in the past year. Tuccillo described Florida's housing market as being in a "mini-recovery" that will continue to normalize as unemployment falls.

In Florida, the current median price for all single-family homes jumped from $125,000 in February 2011 to $134,000 last month, according to Florida Realtors. In the same period in Tampa Bay, prices rose from $100,000 to $107,000, according to My Florida Regional Multiple Listing Service data.

Andrew Duncan, CEO of Re/Max Dynamic in Tampa, said buyers in the $150,000 to $300,000 price range are frustrated because they can't find move-in ready homes. Duncan believes the bidding wars could spur homeowners on the sidelines to sell.

"The people who are selling are letting the market dictate what their homes are worth," he said. "It's an adjustment. This market is not used to this happening."

• • •

Barker built his 2,319-square-foot home in the West Meadows subdivision for $288,000 in 2004. He is 64 and a retiree from the Veterans Affairs. His wife also works there and accepted a new job in Denver, where they bought a house.

Not wanting two mortgage payments, Barker decided to sell and braced himself to take a financial bath. He thought he might get as little as $205,000. His Realtor advised asking $225,000.

The highest offer came in at $245,000, but that buyer needed a government-backed mortgage, which could have added weeks to the process. Barker picked an offer of $235,000 from buyers with a conventional mortgage.

"We played it safe," Barker said. "We are pleased."

Last month, Vicki Williams sold her mother's three-bedroom, one-bath home in Tampa's Bel Mar Shores area. She wanted $150,000 for the 1,279-square-foot house, built in 1955. She landed seven offers in eight days and sold the house for $155,000.

"The highest bid came in at the last minute," Williams said from Marietta, Ga. "The people wanted the house."

• • •

Data from Pinellas, Hillsborough, Pasco and Hernando counties illustrates the trend:

• Inventory for single-family houses priced lower than $300,000 has fallen to its lowest level in more than in six years.

• In those four counties last month, 961 houses sold for under $300,000 that were not foreclosures or short sales. Those homes were on the market for a median of 57 days. In February 2009, 686 houses sold under $300,000 and took 89 days to sell.

• Pending sales in the area — which point to where the market is headed — have climbed every month since February 2011, with 1,102 last month.

Real estate experts say a healthy inventory supply is six months, meaning it would take about six months to sell all the inventory that is currently on the market. The lower the supply, the stronger the market.

Hillsborough's overall supply peaked at 25 months in January 2008; Pinellas', at 18 months in March 2007. Today, Hillsborough is 5.4 months; Pinellas', 5.8 months.

Rae Catanese of Prudential Tropical Realty in South Tampa, wonders if some sellers and their agents are pricing homes low to create bidding wars in an effort to drive up ultimate selling prices.

One of her clients recently bid $370,000 on a $355,000 home. The seller rejected the offer, Catanese said, adding: "This isn't just at one price point."

• • •

The shortage of homes for sale may not last.

Foreclosure filings jumped more than 38 percent last month in Tampa Bay, which means lenders will start putting more homes on the market. That could depress prices too.

And University of Central Florida economist Sean Snaith pointed out that builders aren't erecting houses to meet the rush of buyers. "It's not the entire market," he said. "We're still looking at a weak recovery. The market hasn't gained that much momentum."

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

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