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Even in seller's market, many Tampa Bay home sellers are asking too much

Originally: $299,000  Now: $247,9000 Seminole Heights  107 W Elm St.  2 bedroom/2 bath, 1,350 square feet Originally: $699,900 Now: $599,000 Davis Islands  531 Danube Ave. 2 bedroom/2 bath, 1,450 square feet North Redington Beach  215 Bath Club Blvd. 3 bedroom/2 bath, 1,588 square feet Originally: $600,000 	Now: $550,000 Snell Isle  128 Bay Point Drive 3 bedroom/2 1/2 bath, 2,300 square feet Originally: $825,000 	Now: $800,000 Dunedin  2326 Spicewood Court 4 bedroom/4 bath, 3,973 square feet Originally: $519,900 	Now: $427,900 Wesley Chapel  4912 Butler National Drive 4 bedroom/2 1/2 bath, 2,533 square feet Originally: $336,219 	Now: $299,765 Spring Hill  6325 Treehaven Drive 3 bedroom/2 bath,  1,870 square feet Originally: $150,000 	Now: $139,500
Originally: $299,000 Now: $247,9000 Seminole Heights 107 W Elm St. 2 bedroom/2 bath, 1,350 square feet Originally: $699,900 Now: $599,000 Davis Islands 531 Danube Ave. 2 bedroom/2 bath, 1,450 square feet North Redington Beach 215 Bath Club Blvd. 3 bedroom/2 bath, 1,588 square feet Originally: $600,000 Now: $550,000 Snell Isle 128 Bay Point Drive 3 bedroom/2 1/2 bath, 2,300 square feet Originally: $825,000 Now: $800,000 Dunedin 2326 Spicewood Court 4 bedroom/4 bath, 3,973 square feet Originally: $519,900 Now: $427,900 Wesley Chapel 4912 Butler National Drive 4 bedroom/2 1/2 bath, 2,533 square feet Originally: $336,219 Now: $299,765 Spring Hill 6325 Treehaven Drive 3 bedroom/2 bath, 1,870 square feet Originally: $150,000 Now: $139,500
Published Apr. 29, 2016

It may be a seller's market, but try telling that to a lot of overly optimistic ones.

Despite a shortage of available properties in the Tampa Bay area, sellers are reducing prices on hundreds of homes even before the first offer comes in and the true haggling begins.

"The buyer will pay what the house is worth, but they are not paying any more than the house is worth," says Vince Pennino, a veteran Coldwell Banker agent in Tampa. "That sounds simple and crazy, but there was a time when they would."

In the past seven days alone, there have been price reductions on nearly 1,000 single-family bay area homes, according to the Multiple Listing Service. Many of those already had price drops and some are in especially hot markets like Tampa's Davis Islands and Seminole Heights and St. Petersburg's Old Northeast and Snell Isle.

The problem is, many sellers assume that a hot market means they can get top dollar for their home.

"You always think your house is better than all the other houses because you live there," says Ann Rogers, an agent with Northstar Realty in St. Petersburg. "It doesn't matter what the reality is."

Last year, Rogers began noticing a significant number of price reductions as she searched on MLS for homes that were south of Pinellas County's Ulmerton Road and that were on the market for at least $500,000.

"All of sudden in November, the price decreases started outweighing the new listings," she said.

That perplexed her. At a time when the supply of homes was so tight, shouldn't demand have been keeping prices up?

"So I thought, 'What's going on here?' " Rogers continued, "and it must be that real estate agents in pricing property must have overshot the market and the market isn't going up as fast as we anticipated, and now we're getting a course correction."

That trend continues today and isn't confined to more expensive homes in southern Pinellas County. Homes in all price ranges and all areas are seeing reductions.

Seminole Heights, for example, remains highly popular with buyers for its neighborly feel, its shops and restaurants and, most of all, its charming old bungalows. In the past seven days, 23 homes have sold or gone under contract and only 12 new ones have come on the market to replace them.

Yet in the same period, prices were dropped on 17 houses — some by as much as 6 percent.

Overall, Tampa Bay's real estate market is recovering well from the housing crash. In March, the median price for a single-family home rose nearly 11 percent year-over-year to $187,000, continuing a steady upward trend in prices. None of the four counties in the metro area had more than a four-month supply of homes for sale.

Still, in just the past seven days, prices have been cut on 436 single-family homes in Hillsborough, 321 in Pinellas, 200 in Pasco and 29 in Hernando.

For Hillsborough and Pinellas, that's 11 percent of all active listings. And some of those houses that didn't have price decreases in the past week might have dropped in price earlier.

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"There's been a ton'' of reductions, said Pennino, the Tampa agent, adding that they generally are the result of sellers overestimating their home's true worth.

Places that haven't sold for the original price "were really priced too high — it's not that they were priced right and the market was softening," he said. "We've seen some very nice little gains, but I tell my clients the same thing: The way the market is now, if you put a good, fair price on it — I don't mean give it away — it will sell, and if you don't, it won't sell."

After 28 years in the business, Pennino says he can predict the ultimate selling price 99 percent of the time even if it's not the same price the seller would like. But he acknowledges that determining a "good, fair price" is harder in some areas than others. In Brandon, with a lot of newer homes and townhomes of similar styles, pricing is relatively easy. In South Tampa, where many older homes have undergone extensive modifications, it can be a challenge.

During the housing bubble, sellers asked — and often got — what in retrospect were ridiculously inflated prices for their homes. That "irrational exuberance," as former Federal Reserve Chairman Alan Green­span called it, has been held in check by tighter lending and appraisal standards.

Among today's home sellers, those who have previously bought and sold residential property tend to be more realistic in their asking prices, Rogers of Northstar says. Sellers who aren't realistic and end up cutting the price might find that their homes are going unsold much longer than they hoped.

"Once you start decreasing the value of the house, it becomes tainted property," Rogers said. "People automatically say, 'What's wrong with it?' "

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

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