The Tampa Bay area’s red-hot housing market cooled a bit last month, but Realtors say it’s still going strong despite threats from higher interest rates and high flood insurance rates.
More people also are taking advantage of rising property values and listing their homes for sale, which is easing the shortage of homes on the market, the Florida Realtors trade group said.
Rod Banks of Anchor Florida Realty, who often sells bank-owned properties, said he’s not seeing any slowdown.
“We’re still seeing bids above ask and multiple bidders on almost every property,” Banks said.
In September, the number of existing single-family homes changing hands in Hillsborough, Pinellas, Pasco and Hernando counties fell to 3,104 homes. That was down about 10 percent from August’s stronger total of 3,468 homes sold. It was the lowest monthly sales total since February, when just shy of 2,600 homes changed hands.
However, Florida Realtors economist John Tuccillo downplayed the August-to-September drop. September traditionally is a slow time of year for home sales, because winter snowbirds haven’t arrived yet among other reasons, he said. Economists prefer to look at sales over a full year’s time, and, in fact, home sales were up 18.1 percent in September when compared with September 2012.
Prices in September slowed from what had been a generally steady climb in 2013. The median sale price of a single-family home last month was $155,000 in the Bay area, down 3 percent from the $160,000 that homes fetched in August. However, September’s home prices were still up 19.2 percent from where they were a year ago.
So far, it’s not clear how much the twin threats of interest rates and flood insurance are having on Florida real estate, Tuccillo said.
When interest rates shot up by more than a full percentage point in May, some Realtors and mortgage brokers feared it would cool the housing market. Those rates have fallen just recently according to the latest Freddie Mac survey, down to an average 4.28 percent for a 30-year, fixed-rate mortgage from 4.58 percent in August. It’s hard to know how much those rates are hurting sales, Tuccillo said.
Meantime, Pinellas County Realtors are hearing anecdotes about how surging flood insurance premiums are fouling up real estate sales. But so far, it’s hard to spot the insurance crisis’ effect on housing sales, said Pinellas Realtor Organization head David Bennett. Home sales in Pinellas County were up 20 percent in September when compared with a year ago, his data show.
But, when $125,000 homes start getting flood insurance premiums of $14,000 a year, “it could start to be very impactful on the statistical analysis,” Bennett said.
Statewide, the number of closed sales across Florida in September rose by 18.8 percent when compared with September 2012. The median sale price, $170,000, was up 17.2 percent over the year.
The investors that bought up homes so voraciously over the past 18 months or so appear to have been slowing down. Last month, 41.8 percent of closed sales were cash purchases, where cash deals made up nearly 51 percent of sales in February, Florida Realtors data show. It is assumed many cash buyers are investors.
Since many investors focused on lower-priced homes in the hope of renting them out, the buying spurt left relatively few homes on the market for under $200,000, Tuccillo said.
“More sellers are coming into the market — new listings are up — and investor demand appears to be cooling off a bit, as shown by the fact that cash sales as a percentage of all sales are falling,” Tuccillo said.