Friday, May 25, 2018
Business

Tampa Bay home prices hit five-year high, but Realtors question how long they'll climb

The dog days of summer have yet to slow down Tampa Bay's housing market, as home prices last month inched up to their highest point in five years.

The typical single-family home here sold for $164,000 last month, an 18 percent jump over June 2012, My Florida Regional Multiple Listing Service data show.

But as mortgage rates rise, real estate agents question just how long home prices will maintain their rapid climb.

"This is a readjustment, a stabilizing in value," St. Petersburg agent Frederic Samson said. "Prices aren't going to keep going up as we've seen them."

Median home prices here have jumped, compared to the same month a year before, for 18 months in a row, as a swelling crowd of interested buyers competes for a shrinking pool of homes.

Home sales here nudged down 5 percent to 3,200 sales in June, data show. But that's still the second-busiest month this market has seen since late 2005.

Much of that frenzy has been set off, agents said, because there are too few listings to satisfy demand. By last month, the number of Hillsborough homes for sale was half of what it had been two years before, Greater Tampa Association of Realtors data show.

That has pushed buyers to send in offers quickly or risk losing out. The typical Tampa Bay home last month went under contract in 26 days, the fastest turnaround since the boom in 2005, data show.

Condo prices climbed 7 percent since last June, to $80,500, data show.

Conventional sales — those not marred by a short sale or foreclosure — also sold faster and for higher prices, typically netting a contract within 22 days and selling for $199,000.

Cash deals, which accounted for 44 percent of all sales, slid last month for the first time in half a year, possibly because rising prices have cut into investors' returns.

And Realtors expect climbing mortgage rates could eat further into home buyer demand. The average 30-year fixed-rate loan, after dipping to 3.3 percent in May, has since crept up to 4.3 percent, a change that could add hundreds of dollars onto homeowners' monthly bills.

Andrew Duncan, the owner of Re/Max Dynamic in Tampa, said he expects this year's fiery price gains will settle down as sellers return to the market and buyer demand cools.

Though price gains typically lure more sellers into the market, Duncan said recent months' gains have had a surprising effect.

"It's actually causing some sellers to fence-sit, expecting prices to go up even more," Duncan said. "They get overly ambitious, thinking prices will go up forever. … They think we're back in 2005. And we're not. We don't have the economic fundamentals. We've still got high unemployment, low wages and a lot of foreclosures to get through."

Contact Drew Harwell at (727) 893-8252 or [email protected]

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