Saturday, April 21, 2018
Business

With few signs of rebound, Midtown yet to surface from housing bust

ST. PETERSBURG — Barbara Thomas knew she wanted to move to Midtown. If it was anything like the other neighborhoods around here, she figured she'd find a recovering market: better homes, higher prices and less junk left over from the bust.

But as the Gibbs High School teacher toured this largely black, low-income district south of downtown, the homes she found were dirt cheap, boarded up or falling apart.

In June, she bought a newly remodeled home in Midtown's Highland Oaks, but not before visiting several flops that made her consider calling off the search.

"Some of the places I looked turned me off so bad," said Thomas, 60. "The houses were so run-down. There was no pride of ownership. I mentioned to my friend, I don't see myself paying for a house here."

The sales frenzies and wild price jumps of Tampa Bay's broader housing recovery are far from universal. In places like Midtown, the housing market has barely rebounded from the bust.

The historic heart of St. Petersburg's black community, this district of older homes between Fourth and 34th streets, downtown and Lake Maggiore has never boasted the home prices or demand of South Tampa or Snell Isle.

But the depths to which Midtown's housing market has fallen, and its slow sputtering while the rest of the market has climbed, could leave lasting damage.

Midtown homes this year have sold at the slowest pace in half a decade, a Tampa Bay Times analysis of listing data shows. And though median home prices have edged up to $33,000, they're still less than a third of their peak during the boom.

Barely anyone buys a Midtown home to live in anymore. Over the past five years, nearly nine in 10 home sales went to cash buyers like investors wanting to fix up and rent out Midtown's abandoned homes. It doesn't matter how rundown the home, as long as they can rent it out: Yard signs for one Tampa firm say "We Buy Crack Houses."

Agents say some of those investments have helped revamp Midtown's aging clapboard and concrete-block homes. But others worry that some investors are paying for only the scantest of fixes so they can quickly begin pocketing rent.

"I often see nothing but a little cleaning up, maybe some painting, and then they lease them in a heartbeat," said City Council Chairman Karl Nurse, who owns half a dozen Midtown homes. "If (some investors) have put even $5,000 into those houses, I've got four arms."

People have been renting in Midtown's widespread tenements for decades. The recently closed Sweetbay, a huge blow to the district's growth, was outlasted by a nearby squat apartment complex labeled Paradise.

But the gobbling up of old Midtown homes by buy-to-rent investors has opened the market to a new crop of "slumlords who are only putting lipstick on a pig," said Direct Express Realty broker Joe Cavaleri, who has rehabilitated 12 homes in Midtown's Melrose-Mercy neighborhood.

"Everything was empty, and nobody was fixing anything up," said Michael Gaines, 41, a city stormwater worker who recently left Midtown to buy a house near Gulfport.

Yet the deck is stacked against prospective home buyers who want to move here. Many homes were left empty during yearslong foreclosures and have had pipes, appliances and air-conditioning units ripped out. And agents say banks, already tightfisted with new mortgages, are especially skittish about handing out loans for such cheap homes.

"It takes not only the ability to purchase the home, but now you have to act to fix it up," said Jim Mayes, a HomeTrust Real Estate Group broker. "And you're not going to find conventional lenders who are going to give you a $25,000 mortgage. It's just not worth their time."

Midtown isn't the only minority district shifting away from homeownership. Just 43.9 percent of black Americans own a home, down from nearly 50 percent during the housing bubble, census data for 2012 show. Home­ownership by non-Hispanic whites stands at 73.5 percent, just 2.3 percentage points below its bubble-era peak.

For many, renting is not just a choice. During the housing boom, blacks were far more likely to be given risky subprime loans than whites with similar incomes, New York University research found. In the crisis that followed, almost 1 in 10 black borrowers lost their home to foreclosure, twice the rate for whites, a Center for Responsible Lending report shows.

Agents said the neighborhoods in Midtown will need real, long-term investments before its sluggish rebound speeds up. But even Midtown's newer homes and well-kept bungalows see their values dragged down when homes down the street are boarded up or left to rot.

Some condemned homes here have waited on city demolition lists for more than a year. And as long as those ignored homes are allowed to fester, agents said, Midtown has little chance of rebounding.

"For the community, we've got to find a way to get the worst houses torn down and in the next day" start over with something new, Nurse said. "We're never going to be able to build here otherwise."

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

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