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Very for sale

Figures from area Realtors groups show a jump in listings of 250 percent over a year, creating a buyers' market.

By JAMES THORNER
Published March 31, 2006

[Times photo:William Dunkley]

On Surrey Oak Drive in Covington Park in southern Hillsborough County, 16 of 29 homes are for sale. Apollo Beach has a housing glut as investors dump inventory.

As the real estate market blasted into high orbit last year, Jeff Lilly sank some of his savings into four investment homes in MiraBay.

They looked like killer deals. MiraBay is a lavish neighborhood on Tampa Bay in southern Hillsborough County, where $900,000 houses are common as dirt.

The townhomes Lilly bought, each priced below $400,000, were relatively cheap. But Lilly is feeling less like a real estate genius this month. About a fifth of the neighborhood is for sale, many of them homes that have never been lived in, snagged by fellow investors last year.

"You trying to ruin my day?" Lilly joked when reminded about the thicket of "For Sale" signs in his neighborhood. "If I was smart I wouldn't have bought with so much competition."

MiraBay is part of Apollo Beach, a community that has quadrupled its home listings in one year, from 107 to more than 400. It's not an anomaly. Inventories are ballooning across the Tampa Bay area.

Figures gleaned from area Realtors associations show listings have jumped 250 percent, from 10,414 homes in February 2005 to 24,253 homes in February 2006. The numbers include not just single-family homes but townhomes, duplexes and condominiums.

Such news is uplifting for buyers frustrated by last year's slim pickings, but a downer for sellers hoping to strike it rich quick.

Craig Beggins, president of Century 21 Beggins Enterprises in Apollo Beach, expressed relief that the frenzied pace of homes selling in an hour has passed.

Though no one expects a continuation of last year's 30 percent home appreciation, there's little indication locally that sales prices are falling.

"You took the prices so high last year it was obscene," said Beggins, whose company's listings have swelled from 230 to 700 since last year. "We're just bringing things back to reality."

Tampa Bay area home sales were off an estimated 29 percent in February versus a year earlier. But that dip can't entirely explain skyrocketing inventories.

The explanation is investors.

Investors gobbled up the record-setting new home construction in 2004 and 2005. Now, hoping to turn a buck before interest rate hikes sour the market, many are dumping their vacant homes at the same time.

As Kevin Robles, an executive with McCar Homes put it: "The real estate investor sees the flattening of the market. Now it's time to unload."

Boomeranging back on the market, those properties are causing localized gluts. MiraBay and Covington Park in Apollo Beach exemplify the trend.

The latest phases of Covington Park, totalling several hundred homes built since 2003, have 120 properties for sale on the Multiple Listing Service.

Compared with last year, when sellers dictated asking prices, some listings give off a whiff of flop sweat.

"JUST REDUCED!!!!!!!" one ad bellows. Another announces: "SELLER WILL PAY $3,000 TOWARDS BUYERS CLOSING COST!"

Speculators scooped up so many properties, some streets look half abandoned. Surrey Oak Drive, a short stretch of attached villas in Covington Park, has 16 of its 39 homes for sale.

Katus Watson, a 33-year-old engineer, bought a Surrey Oak villa as an investor, but is reluctant to sell with so much competition on the block. Instead, he's renting it out for less than it's worth, hoping happier days return.

"I'm not worried yet," Watson said. "My wife is, though."

Another hot pocket of rising inventory is coastal Pasco County. Posthurricane insurance rates that doubled and tripled played a role, though investment property is thick on the ground.

"Inventory here is probably four or five times what it was a year ago," said Bob Memoli of Florida Luxury Realty in Trinity. "Last year you couldn't get anything. Right now, we've got more inventory than we know what to do with."

Professional investors will weather any storm by buying undervalued properties and selling them at a fair markup, said Dan Stojadinovic of the Tampa Bay Real Estate Investors Association in St. Petersburg.

"The ones who will be hurt are small-time guys putting anything willy-nilly under contract using their life savings," Stojadinovic said.

Steve Simpson, a Pasco County investor, blames overpriced homes for the richer inventory this year. Buyers and sellers are playing chicken, one waiting for the other to yield on price.

"A listing price doesn't mean anything. We investors look at what a property's really worth," Simpson said.

Robles suspects builders are victims of their own success. By selling so many homes last year, builders cannibalized sales for this year. He rated business today as "steady but not on fire."

"Some of the buyers in the marketplace last year were overly stimulated with the frenzy of it all," Robles said. "We vacuumed those folks into home ownership, so where's the steady stream of buyers behind them?"

Realtors all tell stories about investors unwilling to accept that last year's 30 percent appreciation won't be repeated this year.

While home values haven't dropped locally - and migration to the Tampa Bay area should generate steady sales - homeowners should trim expectations of explosive gains.

On average, it takes about 60 to 75 days to sell this year, a period expected to lengthen to 90 to 120 days, several real estate agents say.

The expectations game has played on the mind of investors like Lilly.

Lilly's townhome on Oceania Court in MiraBay has languished for seven months unsold. But he has held firm on price, asking $350,000 for the 1,966-square-foot property. He paid $290,000 last year.

"God's not making any more waterfront. I feel we can wait it out," he said. "No fire sale here."

James Thorner can be reached at 813 226-3313 or thorner@sptimes.com

[Last modified March 31, 2006, 01:08:15]