Thursday, May 24, 2018
Business

Tampa Bay housing inventory hitting new lows

When Lisa Gilmore-Sarnowski and her husband began shopping for their first home, they knew the mantra well: Now's the time to buy.

Having moved last year from Chicago, the couple believed Florida held, as Gilmore-Sarnowski said, "this amazing abundance of little gems" tossed aside in the market crash.

Their hunt quickly turned frustrating. Most homes they found were already under contract or outside their $150,000 price range. Their best find, a St. Petersburg bungalow, was practically falling apart.

"Honestly, it feels like we're a day late and a dollar short," said Gilmore-Sarnowski, 26, an interior designer whose husband, David Sarnowski, is a Tampa police officer. "All that's left is leftovers."

In a housing market notorious for foreclosures and walk-aways, a surprising new truth has emerged: Too few desirable homes are for sale.

In June, Tampa Bay had a five month's supply of houses, townhouses and condos for sale, meaning it would take about five months to sell it all if nothing else came on the market.

In Hillsborough County, where supply topped two years in 2008, the number of for-sale homes has plunged to about three months, half the size of a healthy market.

Inventories across the country, steadily sliding since 2007, are now at a six-year low, National Association of Realtors data shows.

Supplies are particularly tight for low-cost homes and in high-demand neighborhoods.

Low inventory can lead to a seller's market, including higher prices. After years of sinking values, that's good news for sellers, some of whom have seen bidding wars.

But competition over the record-low inventory is leaving buyers, including those jump-started by low interest rates or the belief the market has bottomed, underwhelmed by the dregs.

It's also pitting first-time buyers looking for low-cost starter homes like Gilmore-Sarnowski against investors, from Europeans seeking safe haven and Northeastern hedge funds to locals in pursuit of cheap rental properties.

Those bullish about housing's recovery, including billionaire investor Warren Buffett, are aggressive and pay with cash, allowing them to outmatch conventional buyers who depend on financing.

"It's a supremely frustrating experience for some buyers," said Peter Murphy, president of real-estate consulting firm Home Encounter. "Investors win at that game every time."

Squeezing the supply are home­owners waiting to list their homes, betting future price increases could net them a better deal, real estate agents said. Others worry that even if they did sell, tighter standards for securing bank loans could prevent them from buying another house. And gun-shy builders are unveiling few new homes; nationally, new-home inventory dropped in June to a staggering 50-year low.

Florida, in particular, has its own challenges clamping down on supply. Nearly half of all Tampa Bay homeowners are underwater, owing more on their mortgages than their homes are worth, making it difficult to sell. And one in eight Florida home­owners are more than two months late on their mortgage.

Another brake on supply: Banks are unloading foreclosures in dribbles to capture higher prices.

Though Tampa Bay foreclosure filings climbed last month, it's unclear when recently repossessed homes could return to the market. Court and lender backlogs have delayed new listings, and banks that already wrote off their losses have little incentive to re-list homes at a low price.

Where once market-watchers feared the so-called "shadow inventory" — seized homes that, if listed in bulk, could drag down prices — agents now clamor for more listings. The local supply of bank-owned homes, Murphy said, has been cut in half since its March 2011 peak.

While Smith & Associates Realtor Liane Jamason typically carries a dozen active listings, she's now down to zero and has struggled even to find a new home for herself. Many house hunters still think the market's wide open with foreclosures, Jamason said, "but that's not reality."

"We still have buyers looking for the bottom. I told somebody today, you missed it," said Century 21 Realtor Jaci Stone. "There was a time when people were desperate. . . . It's not here anymore."

Real-estate giants are moving to sop up demand, with homebuilder Taylor Morrison planning more than a dozen housing communities and new phases across west Florida. But housing supplies don't expand overnight.

Ground-level Realtors are trying a different approach by convincing timid homeowners to sell. Century 21 franchise owner Craig Beggins said he's teaching his agents to use "empowerment thinking": Sure, you might sell for less now, but you'll buy for less, too.

"The people who had problems and had to sell, had to sell. But we've been in this down market for four years," Beggins said. "People are saying, 'Why on earth would somebody sell their house now?' "

Rising prices could prompt reluctant homeowners to sell, and banks could increase the flow of repossessed homes, boosting the supply. But for Gilmore-Sarnowski, that could be too late. She and her husband plan to keep looking for a few months, but the slim pickings have them rethinking their search.

"We're to the point where we're thinking," she said, "maybe we should find somewhere inexpensive to rent."

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

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