Coronavirus unsettles Tampa Bay’s residential real estate market

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ST. PETERSBURG — Debbie Belkov has a renovated house for sale for $425,000 on a highly visible corner in St. Petersburg’s Lake Maggiore Shores.

It has four bedrooms, 3½ baths, a fireplace, wood floors and a couple of lioness statutes flanking the front walk. In just a week after listing it on Zillow, she got a lot of calls and planned to hold an open house over the weekend.

But she called it off, she said Monday, “to protect the community and to protect future buyers, because I know there was going to be a ton of people walking through.”

That kind of concern is an example of the ways that the coronavirus shutdown is starting to make itself felt in the Tampa Bay area’s prosperous residential real estate market.

The number of houses temporarily taken off the market or withdrawn is rising. Some would-be buyers are hesitating. Complications are starting to emerge in the process of closing sales. Sellers still want and hope to sell, but increasingly don’t want strangers in their homes. So open houses are giving way to virtual tours. And no one knows what’s next.

“We’re seeing purchasing money kind of hold off due to uncertainty,” said David Singer, a Shumaker, Loop & Kendrick attorney in Tampa who works with home buyers who need zoning and variance approvals. “People are less likely to speed forward into a transaction even though there is supply on the market.”

In St. Petersburg, mortgage loan officer Jeff Crain likewise said “there’s definitely been some slowdown in the housing market.”

“We’ve had a couple of contracts — not a lot, but a couple ― (where) clients decided not to move forward, really for no other reason than the uncertainty that’s going on,” said Crain, senior vice president of mortgage lending in the St. Petersburg office of Guaranteed Rate, the nation’s fifth largest direct-to-consumer lender. "I’ve had some clients who have been pre-approved to purchase that have decided that they’re not going to look to buy at this time again due to the uncertainty with the economy and the market.

“But honestly, on the whole, my business hasn’t slowed down tremendously, especially on the purchase side," said Crain, who closed $85 million in mortgages last year, more, he said, than any other loan officer at any Pinellas County lender. "The market is still moving along well. We’re still in a great area where people want to be.”

He’s not alone.

“We don’t understand why the volume of transactions is increasing,” said Vincent Cassidy, vice president of Majesty Title Services in Tampa, a division of LandCastle Title Group, which has 25 offices across Florida.

On a good day, those offices typically get 50 orders to schedule real estate closings for purchasing or refinancings. Yet on more than one day last week, they got 80 to 90 orders. That’s busier than in February. It’s busier than at this same time last year.

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“We expected to see a deterioration in the number of contracts that are coming in,” Cassidy said. “That’s not happening.”

At the same time, scheduled closings for purchase contracts that were signed 30 to 60 days ago remain on track, he said.

For Smith & Associates Real Estate, which has 285 agents across the bay area, March started busy, president and chief executive officer Robert Glaser said.

“Then two weeks ago this (crisis) began to affect both the mentality and the ability to close” sales, he said in an interview late last week. Some banks headquartered out of state have been ordered to send employees home. And it’s hard to verify employment when the company where somebody works has closed.

Still, the week that ended March 13, “if you look at our production, we had maybe 12 percent less than sales in that week from a year prior,” Glaser said. “I would expect to stop, like a full stop. But it’s not.”

For last week, Glaser expected maybe six contracts to fall through for one reason or another.

“People have kept their homes on the market for the most part,” he said. “We have suggested in some cases not to put homes on that might be ready to go, to wait until the clouds clear a bit,” so that buyers can base decisions on something more than a virtual tour.

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Going into March, single-family home sales were strong, according to data from Florida Realtors. During February, Hillsbough, Pinellas, Pasco and Hernando saw 3,586 closed sales of single-family houses, a 6.1 percent increase compared with the same month a year before. The number of closed sales in all four counties also increased from January. And median prices rose on a year-over-year basis from 5.7 percent in Pinellas to 15.5 percent in Hernando.

Quantifying what’s happened since then is hard to do in real time, since publicly available data often comes weeks after sales.

But by two measures — the number of new sales contracts signed and the number of sales closed — the housing market in Pinellas and Hillsborough counties held up during the last two weeks.

For March 1 through March 5, the number of new contracts signed in Pinellas and Hillsborough was 793, according to data extracted from the Multiple Listing Service by Coldwell Banker agent Jennifer Zales and Charles Richardson, the firm’s regional senior vice president for West Central Florida.

Two weeks later, during the corresponding five-day period — and during a week of widespread shutdowns of restaurants, bars, theme parks and casinos, plus more chaos in global markets — the number of contracts signed was 774.

Meanwhile, the number of closed sales rose from 586 March 1-5 to 612 last week.

But also rising were the numbers of homes temporarily taken off the market, withdrawn or taken off the market early. In those categories, the numbers more than doubled from 76 to 180. Of those, most of the increase was in homes temporarily taken off the market.

Zales said she took two of those homes off herself, to be painted while the focus shifted from in-person interactions to virtual tours and open houses. Sellers also took houses off the market temporarily because they have children home unexpectedly or are avoiding contact with others, she said.

Zales, who handles luxury homes, often for executives, celebrities and professional athletes, said she is not seeing an effect on homes she has under contract. She points to another number she said indicates that the overall market is still strong: 762 homes were newly listed for sale in Pinellas and Hillsborough last week. That’s close to the weekly average of 795 new listings in those two counties during February.

“As you look at these numbers, you can clearly see business continues to take place despite the challenges we now face with social distancing and the negative news which appears in our living rooms each night,” she said in an email. “Now is still a good time to be on the market. Business continues to be done. Interest rates and affordability are the best we will likely see for the foreseeable future.”

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Meanwhile the pandemic is changing the way business is done.

Veteran St. Petersburg real estate agent Lou Brown said the market “has not dried up,” but “we’re trying to do as much as we can online without having to come face to face.”

“The issue you’re running into is, some people don’t want people in their house,” Crain said. “They don’t want to have an open house. They don’t want to have an appraiser coming in their house. There is some definite uncertainty and concern with those types of things. So we’re just trying to find workarounds that can keep everything flowing; virtual appraisals, things like that.”

Matias Lenk, a certified residential appraiser in Clearwater, said he’s busier than usual, in large part because of the large number refinancings now underway.

No homeowner has refused him entrance to do his job, but he does try to take precautions. He lets homeowners open everything so that once he steps through the door he doesn’t touch anything in the house. He also gives them the option not to be present while he works, which works better with new construction than refinancings. He’s having his own cloth face masks made. And he said the industry is talking about using video inspections to do appraisals, which he said would be unusual, but “unusual times call for unusual measures.”

Since she’s not out and about as much, Zales said she’s focusing on administrative tasks necessary to keep contracts on the path to closings. Cassidy is arranging more remote notarizations and closings with as few people present as possible. If someone comes in to sign, the pen either goes home with them or goes in the trash.

Kevin Brodsky, who owns Milana Custom Homes in Tampa, said he’s not laying off his 13 employees, but is working with suppliers in an effort to get reduced costs on everything from dirt to concrete to tile to trusses. As work continues, he also said he’s bringing in only one contractor at a time to reduce contact on the job site.

“We’re just making sure people are not on top of each other in the homes,” said Brodsky, whose company has 70 town homes under construction and 25 custom homes that have broken ground and will be complete by the end of the year. Customers with deposits on houses are moving ahead, he said, but there’s no question that the pandemic is having an effect.

“Yes, people are frozen,” he said. “People are afraid to make a decision. I know — and I’m not going to mention names — of many builders in South Tampa that cancelled many contracts and are walking away from deposits.”

But “those that can stay strong and focused and positive will survive this," Brodsky said. "There’ll be a day where the market is back to record highs, but nobody can predict when. It might take a while because everything” — restaurants and beaches — “are at a dead stop.”

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OTHER CORONAVIRUS WEBSITES:

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• Florida Department of Health

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