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Tampa Bay home prices predicted to rise in 2012

Published Jan. 9, 2012

This year may bring an end to the starring role Tampa Bay and Florida have played in the national housing crisis.

Home prices in four Sunshine State metro areas are predicted to improve more than most other regions in the country, according to a Clear Capital report released today.

The California-based housing valuation and analytics firm sees a 7.4 percent home price increase in Tampa Bay in 2012, which would make it sixth in the nation in terms of predicted price improvement.

Among Florida metro areas, the report predicts Orlando prices will rise 11.7 percent, followed by Miami at 8.8 percent and Jacksonville at 4.3 percent.

It's no surprise that Florida markets top the list. Foreclosures and falling values decimated the state more than others when the housing market crashed.

"We led the troops into the doldrums in 2006," said Scott Samuels of Keller Williams Realty in St. Petersburg. "Now we are going to be one of the first to get out of this."

Real estate professionals give several reasons why the Tampa Bay area should see strong gains in 2012:

•The median price of a single-family home fell to $110,000 in January 2011 but rose in the next five months. The price reached $130,000 in August, bounced up and down the last few months but has not dropped below the $120,900 it reached in May.

• The amount of area real estate for sale has fallen to levels not seen for years. The area has about a six-month supply of unsold homes, meaning it would take about six months to sell all the inventory that is currently on the market. Hillsborough's supply peaked at 25 months in January 2008; Pinellas' at 18 months in March 2007. The lower the supply, the stronger the market.

• Foreclosure sales no longer dominate the market. Lenders are allowing more homeowners to sell houses as short sales prevent more foreclosures. Prices on short sales are higher than on foreclosed homes. With fewer foreclosures on the market, investors searching for bargains will drive demand higher.

Nick Fraser, owner of Remax All Star in Madeira Beach, cautioned that it's hard to make a blanket statement about prices for an entire region. He expects prices to remain flat for the first six months until banks clear many short sales from the market. The biggest gains, he said, will come in the last half of the year.

Still, he believes the worst days are over unless the economy tanks.

"We'll find slow appreciation or steady price gains," Fraser said. "A lot of areas have bottomed out."

Clear Capital predicted that home prices will fall in 25 of the largest regions. Atlanta prices would drop 14.4 percent, the most in the country, followed by Los Angeles with a decline of 10.3 percent and Seattle at minus 7.5 percent.

Mark Puente can be reached at mpuente@tampabay.com or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.

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