Saturday, February 24, 2018
Business

Tampa Bay year-over-year home prices see first dip in 29 months

Tampa Bay home prices dropped year-over-year for the first time in 29 months as the spring selling season sputtered to a close, triggering fresh worries over a flattening housing rebound.

Median home prices sagged to $162,000, down about 1 percent from the previous May, data from Realtors' multiple listing service show. The number of sales also dipped for the seventh time in the last eight months.

The price slide, though small, combined with sluggish sales marks a dispiriting end for the season Realtors hoped would rekindle a dimming market.

But it also underlines what economists have called fundamental weaknesses in the housing recovery: stagnant wages, strict mortgage rules and anxiety over the cost of the American dream.

"Consumers' lukewarm income expectations and reticence about the economy seem to be holding back housing demand," Doug Duncan, senior vice president and chief economist at mortgage giant Fannie Mae, said Monday. "Economic conditions continue to be the top concern among consumers who think it's a bad time to buy or sell a home."

Agents say home sales are struggling because house hunters can't find anything they want to buy. Sellers are hesitant to list amid rising prices or worried they won't be able to find a place to move, dropping inventory levels below what is traditionally seen as a balanced market, Hills­borough and Pinellas Realtors groups said.

Many can't even think about buying, because they still owe more on their mortgages than their current homes are worth. Tampa Bay remains the most "underwater" community in America, with 179,000 homeowners, or about 30 percent of all mortgaged homes, still waiting to resurface, CoreLogic data show.

Once-reliable fuels of the housing market have proven increasingly hard to find. First-time buyers, who are struggling with limited savings, spotty credit and weighty anchors from student-loan debt, accounted for 29 percent of existing-home sales nationwide in April, down from an average of 40 percent five years ago, National Association of Realtors data show.

And while rates for a 30-year fixed mortgage remain historically low, at 4.14 percent, banks' strict lending standards are blocking potential buyers or spooking them before they start.

"The likelihood of you getting a loan is not that much different, you just have to jump through a lot more hoops," said Andrew Duncan, a Re/Max real estate broker in Tampa. "The process is just more grueling. People are worried they won't qualify, or they'll be embarrassed, so they just don't try."

The market this year has underwhelmed largely due to the booming rebound of 2013, when buying was boosted by a torrent of cash from investors gobbling bargain-priced homes.

As the bargains have vanished, so, too, have the bulk buyers who propped up the market. Cash deals from investors and other deep-pocketed buyers last month slid below 40 percent of all sales for the first time since early 2012.

"At this time of the year last year, things started to get a little crazy. It had that bubble feel to it, with so many offers," said Steve Capen, a Keller Williams agent in St. Petersburg. "Things are getting balanced. . . . It's a healthier market. But we still have a very low inventory."

The condo market, where supplies have been constrained during a years-long construction coma, is also seeing fewer sales but heightened prices. About 775 condos sold last month, 10 percent below last year, while median prices rose to $90,000, 14 percent above May 2013.

The share of what's selling in single-family homes has changed, too, with short sales dropping to the lowest share of purchases since 2008. Conventional sales of nondistressed homes have grown, but many foreclosures remain stuck in limbo. By April, state court data show, foreclosure judges still had more than 38,000 Tampa Bay cases to resolve.

Drew Harwell can be reached at [email protected] or (727) 893-8252.

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