From sales that fall through from a lack of financing to failed insurance inspections, a variety of challenges face Hillsborough County area homebuyers and sellers in the New Year.
Tom Bosso of Hunter’s Green, the owner and broker of New Tampa Realty Inc., said homebuyers will most likely have to deal with higher mortgage rates in 2014, but that may be the least of their problems.
“The new restrictions on lending that go into affect in 2014 will make it difficult to get a loan,” Bosso said. “It will cover income level and continuity on the job. They will require more documentation. The government is really tightening up the guidelines and it’s going to be harder for first-time homebuyers and homebuyers across the board.”
Bosso said he expects the low inventory problem should improve somewhat as more homeowners try to sell. However, finding a qualified buyer might prove challenging.
“It was getting better stable and I’d hate to see that change,” he said. “We were getting to the point of a strong market. The tight lending restrictions will put a hiccup in it.”
Bosso said homes in New Tampa range from about $180,000 and up to the millions.
Inventory has been tight, in part, because the longtime homeowners don’t want to leave.
“In Hunter’s Green and Tampa Palms you have mature trees now,” Boss said. “It has a nice feel – an established feel.”
He said most of the homebuyers are first-time and step-up home buyers. Baby boomer empty-nesters in their 50s and 60s appear to be staying put in New Tampa instead of downsizing or relocating, he said.
Tightened lending restrictions will not affect cash buyers, but some retired buyers today rely on mortgages to purchase homes.
Flo Vachon, a Realtor with Keller Williams Realty South Shore, said baby boomers are the “bread and butter” of Sun City Center.
“Many baby boomers like my husband and me are second-generation Sun City Center homeowners,” she said. “We visited his parents here for many years and when his father died and his mother got too old to be alone, we moved here to care for her in old age.”
Vachon said she expects interest rates to stay stable in the New Year, but predicts inventory may go even lower in Sun City Center.
“Many baby boomers are buying homes here now because the prices and interest rates are still so low and they are using them as rental properties until they are ready to retire,” Vachon said. “There’s never been such an ideal time to buy homes under such lucrative conditions. It’s a perfect windfall for baby boomers and buyers of all ages.”
At the same time, people buying and selling older homes in Sun City Center may have to deal with the headaches of failed property insurance inspections.
“The Sun City Center area has a lot of older housing and so insurance is a really big issue for us right now,” she said. “Although sellers had no problem with their current insurance carriers, new buyers attempting to buy their homes are getting denied insurance due to a multitude of new issues.”
She said most of the problems have to do with the outdated plumbing, old circuit breakers, older roofs and wiring.
“Sellers who have already taken a beating from the real estate bust are now discovering that in order to sell their homes, they either have to replace these items or find a buyer who is willing to do it before closing – certainly not an ideal situation for either party, but one which needs to be negotiated when making an offer on a home,” Vachon said.
As far as the urban homebuyer interested in South Tampa’s upscale neighborhoods, the biggest fear is a mortgage rate increase.
Rae Catanese, a Realtor with RE/MAX Bay to Bay, said the real estate market has been steadily improving in South Tampa. Although she anticipates interest rates will go up, she has a rosier prediction for 2014.
“Signs of the turnaround have already begun in South Tampa’s 33629 ZIP code,” Catanese said. “When October 2012 is compared to October 2013, the last month when statistics were available, the average selling price in all categories increased with three-bedroom condos and townhouses seeing the largest increase – nearly 48 percent. The number of properties sold increased and average days on the market decreased from 102 to 67. Both detached single family homes and attached homes such as condos saw increases.”
She pointed out that in October of 2012, the average selling price was $423,696 in the South Tampa area compared to $535,998 this past October.
“This momentum is expected to continue in the future – 2014 is going to be a great year,” she said.