Shift in home market leaves sellers in lurch
A year ago it was a seller's market. But home buyers now have the upper hand.
By LEONORA LAPETER
Published August 8, 2006
Shane Whitlatch has been a real estate agent less than two years but already he has seen the high and low points of Tampa Bay's housing market.
Juggling a dizzying volume of phone calls last week, Whitlatch, 37, tells sellers there are now nine homes for every buyer and home prices are dropping. New listings, he notes, have tripled while buyers have dwindled.
One desk over, Michael Spears packs up his computer and a piece of last-day-on-the-job chocolate cake. The 58-year-old is heading back to being a lawyer after his real estate sales fell to a fifth of what they were the same time last year.
The Tampa Bay area has shifted from a seller's market to a buyer's market, real estate experts say. From New Tampa in Hillsborough County to Lexington Oaks in Pasco County and the Old Northeast in Pinellas County, the home market is adjusting.
Experts cite a combination of factors, from rising interest rates to exorbitant insurance bills. But the biggest reason is that investors are dumping properties.
Those caught in the changing market include real estate agents who hoped to score big quickly to a mother of four who has been trying to sell her home for six months so she can join her husband in Atlanta.
A condo-shopping couple from Atlanta whom Whitlatch was helping, meanwhile, suddenly has hundreds to choose from -- and more every day. Pinellas County sellers alone placed 31,740 condos on the market in the first five months of this year - up from 9,055 the same time last year. Home buyers faced a similar abundance: 45,677 homes this year compared with 17,563 homes last year.
Housing experts say the market may adjust in another year or two because baby boomers will continue to retire and move here.
But it will take time to get rid of the glut of inventory.* * *
Six months ago, the Rabb family put its two-story Colonial home near Tyrone Square in St. Petersburg on the market for $440,000 after Rob Rabb's job was transferred to Atlanta.
Two months ago, he left for Atlanta to sell church directories and portraits, leaving behind his wife, Jan, 36, and their four kids.
Frustrated that their home didn't sell, the Rabbs reduced their price to $369,000 - $20,000 below the home's appraised value.
"We've had so many people come back and say 'we love it but we have to sell our house first,' " Jan Rabb said. "Nobody locally is able to sell their house. People from out of town are the best buyers right now. It's almost like everything is standing still."
This past week, a family from California made an offer slightly below $369,000, and the Rabbs accepted. They declined to say how much. The contract is pending. Still, even at the lower price they will make well over $100,000, she said.
Across the Tampa Bay area, "for sale" and "for rent" signs are popping up left and right, many homeowners are beginning to offer price reductions and incentives, and people who traditionally have sold their homes on their own are turning to professionals for help.
"It's kinda scary," Ellenn Poyssick, 41, an investor seller, said as she showed Whitlatch a Crescent Heights home in St. Petersburg that she and her husband fixed up. She and her husband have renovated eight houses and always sold them on their own. But recently, one of the homes in Tampa's Seminole Heights didn't get a single showing in four months.
"I was so desperate, I went ahead and leased it," she said.
The increase in inventory is even affecting some of the most popular neighborhoods. Take the Old Northeast in St. Petersburg for example. From Fifth Avenue N to 22nd Avenue N, there were more than 100 property listings this past week, including 58 single-family homes. And that doesn't even include about 10 that were being sold by their owners.
In some new developments and condo conversion projects in Hillsborough County, as many as one-fifth of the properties are for sale, said Bill Dallas, a Hillsborough real estate agent.
"As a Realtor, I'm having to work harder with our sellers to make sure that they are realistically pricing their homes to sell," Dallas said, "and that the prices from last summer and of today are two completely different stories."
At a meeting of a team of ERA Lambrecht Realtors this past week, the news was grim, yet hopeful.
Whitlatch, who was named ERA Real Estate's Rookie Realtor of the Year last year, and his veteran real estate partner, Lee Ann Lambrecht, have more than 20 listings ranging from $135,000 to $4.9-million.
They had a buyer make an offer on an Indian Shores waterfront condo. But the rest of their waterfront inventory was stagnant.
They decided not to take a listing from a pair of investors trying to sell 20 homes because the investors priced the properties too high.
They decided that the prices of at least three homes already listed needed to be reduced. And a new strategy of getting sellers to offer financial incentives to Realtors and their buyers was working: Four of nine sellers got offers within two weeks.
Spears' assessment of the business he just left is a little less rosy. He had been practicing real estate law for about three decades when he decided to sell real estate almost three years ago. The first two years, he said, were easy. This year, he realized he was going to have to work differently, including making cold calls, and he decided to return to practicing law.
"I think by the end of the year, you're going to see a substantial number of people leave this business," said Spears, 58.* * *
Paula Ellish, 45, recently went looking to buy a home after moving to St. Petersburg for a job in a home loan office. She was selling her townhome in Washington, D.C., for $400,000. She had $350,000 to spend.
After visiting 41 houses, she settled on one in west St. Petersburg listed for $235,000, $100,000 below what she wanted to spend.
To be sure, buyers such as Ellish are out there, but their numbers have declined.
In June 2005, 60 percent of all homes listed on the market sold. This year, just 10 percent of all homes listed on the market sold in June.
The real estate decline in the Tampa Bay area is seen across Florida.
"There's a bit of anxiety in the market," said Brad Hunter, a housing analyst in West Palm Beach. "Fewer people are buying because they are afraid that they'll make a mistake if they buy at the wrong time and then the market goes down. And a lot of buyers are saying, 'Why don't I wait until the price gets better?' "
Those who take the plunge are doing so out of necessity, real estate experts say. They transferred from other states, they're looking for a first home or they have lots of money to splurge on a high-end home. But even some of these people are waiting.
"It was almost too much to deal with," Ellish said. "There were so many things on the market. I saw prices drop two and three times. It made it very difficult. There are many great homes out there."