Prospective homebuyers in Tampa Bay have had to endure frenzied bidding wars, make cash offers and even waive their rights to an inspection just to have a shot at snagging a home in recent years.
As housing markets across the country show signs of cooling off, Tampa Bay buyers may get some reprieve. Still, experts warn that prices may never drop back down to where they were before the pandemic.
“We’re definitely seeing some slowing (nationally) but it’s not as pronounced in Florida.” said Kristine Smale, senior vice president for the real estate analytics company Zonda.
One reason behind that is the influx of buyers moving here from more expensive states.
Though a $700,000 home may seem expensive to a Tampa Bay native “to someone from (California) who just sold their house for $2.5 million and is bringing their (California) wages here...we look like a bargain,” said Renee Celli, a Realtor with RE/MAX in St. Pete.
A lack of available homes has also created challenges for buyers, though that may be starting to change.
According to data from Florida Realtors, the number of active listings in Tampa, St. Pete and Clearwater has steadily decreased since the spring of 2019, hitting a four-year low in February this year with just over 2,000 active listings.
Historically low interest rates triggered by the pandemic created a surge in demand from homebuyers looking to score a bargain, Smale explained. That caused inventory to plummet and sellers capitalized on the opportunity by raising their prices.
Tampa Bay experienced some of the biggest price jumps in the country according to the S&P CoreLogic Case-Shiller Index, which found that prices increased by 34.8% in 2022.
But with average mortgage rates now nearing 6% according to the latest data from the Mortgage Bankers Association, many buyers have decided to cut their home search short.
“The low interest rates were the one thing that was keeping things affordable for some people,” said Christopher Lai, a Realtor with People’s Choice Realty Services in Tampa. “Now it’s either you have the money and the financial wherewithal or you don’t unfortunately.”
Nationally, mortgage applications declined for the third week in a row this week, reaching the lowest level since 2000, according to the Mortgage Bankers Association.
Trista Page, a loan originator with Amerifirst Home Mortgage said she’s seeing that trend reflected here in Tampa Bay.
“People are finding that the houses they could afford six months ago or four months ago, they can’t afford anymore,” she said. “They’re having to downsize or look in a different area or just rent for a year and hope that the rates will drop.”
Lai said as demand has dropped some, it’s begun to free up homes for buyers who can afford to stick it out.
Florida Realtors reported 6,573 active listings across Tampa, St. Pete and Clearwater in June. That’s a 77.7% increase from that same time last year and a 47.9% increase from May.
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More inventory means sellers may be forced to make some concessions.
“They’re not getting six offers above asking on the first day anymore,” Celli said. So if a buyer finds a home they like that’s slightly out of their price range, “make a lower offer. You might be pleasantly surprised.”
The average sales price in June 2022 for Tampa, St. Pete and Clearwater was up 25.9% from the year prior, according to data from Florida Realtors.
Smale said there will likely be a price adjustment in the coming months, but thanks to the influx of out of state buyers, prices in Florida probably won’t fall as far as the rest of the country.
“You would need a massive flood of inventory and I just don’t see that happening,” she said.