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Market shift: Now builders lure Realtors

The slowing housing market changes the tone of the Tampa Bay Builders Association Expo - suddenly incentives abound.

By CHUIN-WEI YAP
Published July 28, 2006

TAMPA - Thousands of dollars in home-closing bonuses. Commissions more than three times last year's rates. Deep discounts and even gas card promotions.

In a rapidly slowing housing market, Realtors on Thursday found themselves suddenly amid a flood of incentives to sell homes at Thursday's Tampa Bay Builders Association Expo.

Aimed at matching builders with Realtors, this was an event where many builders last year would only offer 3 percent commissions - if even that.

"In previous years, we had builders that wouldn't even pay you any commission," said Estella Cuesta, of Tampa's Weichert/Yates & Associates. "Now, they're offering you the moon. It's good for Realtors. It was better than last year for sure. There were more booths. The only thing was that it was a lot more crowded."

As the Tampa Bay housing market stumbles, sales have halved in once-hot home producers like Pasco County for the first six months of 2006, compared with the same period last year.

The fall comes on the back of a national market that continues to slip. Sales of new homes in June fell 11 percent, year on year, the first decline since February.

In Tampa, single-family housing starts dropped 14.4 percent in the second quarter, compared with the same period in 2005, according to a Metrostudy report released Wednesday.

With fast-rising property insurance rates seen as the chief culprit, builders are fighting back with a range of incentives to get real estate agents back on the horse. Few agents left the Raymond James Stadium Thursday without a full bag of gifts from builders.

U.S. Home dangled $10,000 per closed purchase. KB Homes handed out brochures that promised "sweet deal bonuses" between $2,000 and $5,000 for Realtors who score sales by September.

Standard Pacific Homes offered a $4,000 allowance for agents to pass on to buyers if they close on properties in Wesley Chapel's Seven Oaks development. Only one condition: buyers must use a Standard Pacific mortgage.

Gone, apparently, was last year's unwritten limit of 3 percent on commissions.

Beazer Homes handed out 5 percent. Lennar hawked 6 percent. Standard Pacific offered 10 percent on the second closing.

Some developments set up their own booths. Their singular ambition: Just get more people into the model centers.

Longleaf Town, off New Port Richey in Pasco County, gave Realtors gas cards ranging from $50 to $100 in value to encourage new home showings.

Wilderness Lake Preserve in Land O'Lakes, represented by Lindell Properties, gave $750 in "shopping spree points" to agents who get clients into its model centers.

On all sides of the deal, builders and buyers say increasingly expensive homeowners insurance is the single most inflammatory cause of a dramatic fall in home sales.

"Younger and first-time home buyers simply cannot afford $3,000 per year for insurance," said Tom Stephan, of Realty Options. "That's in areas that do not require additional flood or wind riders. We no longer have a 'local' market. The younger buyers and first-time buyers have been priced out."

Still, most builders and developers at the expo ventured a guardedly optimistic outlook for the year ahead. The signs this year are of a buyers' market in full swing.

"Last year, we did not have any inventory," said Lorrie Glover, at the booth for Connerton, one of Pasco's major planned communities. "Last year, we used to have a lottery for buyers. The market's changed now."

Chuin-Wei Yap can be reached at cyap@sptimes.com or (727) 909-4613.

[Last modified July 28, 2006, 01:13:19]