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Cash buyers snapping up houses around Tampa Bay

If you have bundles of cash, the real estate world is at your doorstep. • Endless choices. Cheap houses. Discounts. • Cash buyers and investors are dominating the housing market in Tampa Bay and across the country. They're gobbling up these lower-priced homes at levels not seen in five years. • So far in 2011, 59 percent of sales in Pasco were made with cash. Pinellas logged 66 percent, and Hillsborough logged 50 percent. • "I don't ever remember it like this," said Scott Samuels, of RE/MAX Metro in St. Petersburg, who deals with bank-owned properties. "For me as a Realtor, it's a great thing."

In many cases, experts said, banks will give cash discounts to buyers of foreclosed homes. The deals are smoother because banks don't have to wait for buyers to get loans or appraisals.

And investors, Samuels said, think prices have hit bottom and will eventually start rising, creating profits. The high cash rates indicate that getting financed is hard for some buyers, said Samuels, a 30-year agent.

Buyers, real estate agents said, are pulling cash from retirement accounts and the stock market, thinking they can get a better return on a home by holding it and renting it for five to 10 years.

"They're buying real estate that they think is a great value, Samuels said.

But as sales rise, median prices continue to fall.

The median price of conventional home sales in Tampa Bay fell to $130,500 in February, the latest date for which figures are available. The median prices of foreclosure sales fell to $60,000; short sales dropped to $103,000.

Median prices are the centerpoint; half the prices are less, half are more.

The median sales price of all Tampa Bay homes in June 2006 — the height of the real estate boom — was $239,600.

Nationally, cash accounted for a record share of 35 percent of sales in March, up from 33 percent in February. Investors logged 22 percent of sales in March, up 3 percent from February, according to the National Association of Realtors.

Real estate agents said severe weather and an influx of cheap homes are driving Northerners, investors and foreigners back to Florida. As soon as investors buy the homes, they either fix them up and rent them to produce a cash flow or sell them to other investors for a profit.

There's no shortage of cheap homes in Tampa Bay. In Pasco, Pinellas and Hillsborough counties, more than 2,500 homes were listed below $50,000 at the end of March.

But cash buyers aren't buying just low-end homes. In Hillsborough County, buyers bought more than 1,500 homes through March this year priced between $100,000 and $5 million.

Cash sales should climb even more since sales of foreclosed homes in Tampa Bay recently exceeded traditional sales.

During the first two months of 2011, Tampa Bay recorded 2,619 foreclosure sales, compared with 2,532 conventional sales. During the same period last year, foreclosure sales numbered 1,154, compared with 3,089 conventional sales.

The spring and summer buying seasons for real estate agents are like Thanksgiving and Christmas for retailers.

Andrew Duncan, leader of the Duncan Duo & Associates at Keller Williams Realty in Tampa, said traditional buyers should be prepared to compete with the cash.

He encourages them to get fully approved for a loan, beyond getting a prequalification letter, and to have larger down payments. Banks will consider traditional buyers who can show verified income and good credit, he said.

"There's ways to get deals done," he said, "but cash is king when there's financing issues. Some buyers are getting discouraged and have to think outside the box."

Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459.

.fast facts

Average prices

Though midpoint sales prices are down, average prices are up, from February to March 2011.

Pinellas:
$149,500 to $165,700

Hillsborough:
$135,376 to $140,360

Pasco:
$106,000 to $132,000

Source: Greater Tampa Bay Association of Realtors; Pinellas Realtor Organization


county

Cash

conventional

FHA

VA

other
Seller Financing
Assumption
Pinellas 65.08 20.13 10.05 2.03 1.25 1.22 0.23
Pasco 58.77 18.1 15.84 3.9 2.07 1.19 0.13
Hillsborough 50.1 21.99 18.47 5.04 2.27 1.31 0.73

county

Cash

conventional

FHA

VA

other
Seller Financing
Assumption
Pinellas 65.08 20.13 10.05 2.03 1.25 1.22 0.23
Pasco 58.77 18.1 15.84 3.9 2.07 1.19 0.13
Hillsborough 50.1 21.99 18.47 5.04 2.27 1.31 0.73

Cash buyers snapping up houses around Tampa Bay 04/22/11 [Last modified: Friday, May 27, 2011 8:05am]
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