With its leaky cushion of investor cash still deflating, Tampa Bay's housing market entered 2014 with home sales sliding to their slowest level in almost two years, listing data show.
But sales of homes at risk of spiking flood-insurance rates rebounded as private insurers and savvy sellers found ways to seal the deal. And even in a wintry month infamous for sales slumps, Tampa Bay home prices extended their price-growth streak to 25 months in a row.
More than 2,100 single-family homes sold across Tampa Bay last month, only about 25 fewer than last January, My Florida Regional Multiple Listing Service data show. The median home sold for $143,000, down from the $170,000 summertime peak but still 10 percent higher than January 2013.
Realtors blamed tepid sales on seasonal doldrums, but the deep drop in investor buying, often due to rising prices, also played a role. January saw both the fewest home sales, and the fewest all-cash sales, since February 2012.
The thinning sales from local investors could trim Tampa Bay's market even further, as 47 percent of last month's sales were bought through all-cash deals. A quarter of the homes sold by Realtors last month were foreclosures, the biggest share since 2011. Most were bought by investors seeking to fix them up for rentals or flip them for quick resale.
Neighborhoods where worries of soaring flood-insurance rates bit into home sales have begun to show progress. In St. Petersburg's Shore Acres, 10 homes sold last month, more than sold last January, before flood changes were under way.
Other neighborhoods with considerable flood-insurance risk, including the south Pinellas beaches and the Holiday Park area just south of Kenneth City, also saw more home sales than the same time last year.
Realtors said buyers have begun to find ways around the spiking rates of the Biggert-Waters Flood Insurance Reform Act, including through private coverage. One agent said a waterfront home near the Treasure Island Causeway this month was offered a flood-insurance quote, through private insurance market Lloyd's of London, that was $2,000 a year cheaper than a federal policy.
But some neighborhoods speckled with older, low-lying homes have yet to rebound. In a west-coast expanse of South Tampa, between the Beach Park and Rembrandt Gardens neighborhoods, only 14 homes sold last month, the fewest in two years.
Realtors said they hoped investors' exit would run alongside a bump in traditional buyers, who are increasingly able to benefit from banks easing open the spigot on new loans. Rates for a 30-year fixed mortgage ended January lower than they started, sliding from 4.5 percent around New Year's Day to around 4.2 percent today.
Calling the housing recovery "a long, difficult slog," Wells Fargo economists said Monday that the investor exodus had illustrated how modestly the fundamentals guiding traditional housing markets, like job and income growth, had improved.
Though they said "surprisingly weak" new-home sales nationwide had lowered housing-market expectations for 2014, home prices nationwide had risen almost 12 percent over the past year, and "more homeowners now feel comfortable putting their homes on the market."
Drew Harwell can be reached at [email protected] or (727) 893-8252.