Saturday, May 19, 2018
Business

Tampa Bay home sales continue to fall

Has the Tampa Bay housing market's recovery lost momentum?

Halfway through the traditionally booming spring selling season, home sales here have disappointed, dropping for the fourth month in a row, year-over-year listing data for April show.

With investor activity slowing and short-sale bargains drying up, real estate agents said Tampa Bay housing's weaknesses are beginning to show through.

Rising home prices and mortgage rates are eating away at what would-be buyers can afford. Many more are being discouraged by uncompromising lenders and tight inventories of homes for sale.

"At this time last year … we couldn't keep up," Keller Williams real estate agent Steve Capen said. Now, "there's still a lot of people who want to move up but they can't, or they're afraid to … because they're worried they're not going be able to find something in time."

Median single-family home prices here rose to $156,000 in April, the 29th month in a row of year-over-year price gains, listing data show. Even those appear to be tempering due to weak sales: Unlike the 20 percent price jumps of last spring, the last three months have posted the shallowest gains in nearly two years.

Climbing prices are helping homeowners recover lost equity, though many still owe more on mortgages than their homes are worth, CoreLogic data show. At the start of the year, more than 185,000 mortgages, or about 30 percent of all Tampa Bay home loans, remained underwater.

That debt continues to block prospective buyers from listing their homes on the market. Inventory for the Greater Tampa Association of Realtors has fallen every month this year, stumbling to four months of supply in March, below what agents call a healthy market.

Foreclosures also continue to bedevil the local market, keeping homes tied up in court and off the market. By April, Tampa Bay courts still faced a backlog of 38,000 pending foreclosures, which judges are resolving at a rate of about 2,000 cases a month, state court data show.

After a resilient year in construction, 2014 has so far proven lackluster for Tampa Bay's new-home industry. In March, crews started building about 500 single-family homes here, down year-over-year for the sixth month in a row, census data show. Building permits, a sign of future growth, were also weak, sagging 17 percent from last March.

Meanwhile, thousands more apartments and rental homes have hit the market in the last year, as developers and investors bet big on a shift in consumer preferences toward short-term, low-risk rentals and away from the home-buying American dream. The rate of people who own a home in Tampa Bay fell last year to 65 percent, the lowest point in at least 27 years.

With many of Tampa Bay's housing-bust bargains gone, hedge funds and real estate investors have continued to slow their home-buying binges. Cash deals, largely from deep-pocketed buyers and investors, accounted for 40 percent of home sales here last month, down about 10 percentage points since April 2013.

Some sellers also have unrealistic expectations of what their homes are worth, due in part to last year's run up in prices thanks to so much investor activity.

"Sellers are starting (their prices) a little high because the market climbed and they're trying to continue that trend," Charles Rutenberg agent Michele Brigandi said. But with fewer cash deals, more sellers must rely on traditional buyers, whose lender influences how much the buyer can spend and can easily spike a deal.

Interest rates for a 30-year fixed mortgage slid this week to 4.21, the lowest of the year but still nearly a percentage point higher than this time last year. Applications for mortgages across the country in March were down 21 percent since last year, another sign of fizzling demand.

The market's slide has surprised shrewd investors like Warren Buffett, who told CNBC last week "the pickup in housing has been slower than I would have anticipated," and Federal Reserve Chair Janet Yellen, who on Wednesday called housing activity "disappointing."

Though recent sales don't stack up to last year's feverish rally, Wells Fargo Securities analysts noted in a report released Thursday, the bad news may conceal how much the market has improved since the housing bubble burst.

"Traditional buyers are returning to the housing market," they wrote. "They simply are not coming back as quickly as investor buyers are backing away."

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

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