Bay's home boom suddenly bellyup

Published November 19, 2006

Year to year, overall housing prices in the Tampa Bay area still show small increases. But don't be fooled.

So large is this area's unsold inventory of homes and so comparatively few the buyers, most housing prices have actually retreated 5 to 15 percent.

And it has happened only since the spring.

A recent St. Petersburg Times analysis of single-family home sales in 200 neighborhoods in Pinellas, Pasco and Hillsborough counties found that two-thirds saw median home prices stagnate or fall between the second quarter and third quarter of 2006. One third reported rising median prices.

And not all of those still-appreciating neighborhoods are sitting as pretty as the numbers suggest. Take Gulf Harbors in west Pasco County. Median prices rose 45 percent from the second to third quarters this year. But homes of similar size dropped in price. Why? A spurt of big home sales in the third quarter skewed the median.

When measured by price per square foot, homes have lost value almost everywhere.

Median means half the homes sold for more than a particular amount and half sold for less.

"It's not so much prices are coming down, it's that prices should never have been there in the first place," said Craig Beggins, owner of a Century 21 franchise in southeast Hillsborough and Pinellas.

Look what happened to the investment dreams of Jodi and Jeffrey Roberts.

The real estate climate was so balmy the past few years, the Robertses' investment homes showered them with hundreds of thousands of dollars in easy gains.

Now they are bracing for a different forecast: stormy with a chance of foreclosure. Four Pasco and Hillsborough county properties they bought at the tail end of the property boom can't find buyers willing to offer more than the Robertses paid for them.

Price cuts aren't doing the trick. In west Pasco's Gulf Harbors, the couple listed a home for $50,000 less than what they paid. The result? Zero buyer interest.

"I know how it feels to be poor," Jodi Roberts said as she contemplated her combined $15,000 monthly house payments.

As a rough rule, neighborhoods that were fever beds of investors last year have turned cold this year. Sales have fallen by about half the past year, and the law of supply and demand is reasserting itself with a vengeance:

- In its ride to the real estate stratosphere, St. Pete Beach relied on sales of waterfront homes to out-of-state baby boomers. Two years of hurricanes and insurance rate hikes put the kibosh on that. Realtor Carol Giavannoni urged residents to look at 2005 prices and lop off 5 to 10 percent.

- In MiraBay, in southeast Hillsborough, about 150 of 500 homes display "For Sale" signs. The upscale neighborhood of Bermuda lawns, balconies and backyard boat slips is a victim of its own success. The investors that propped up Apollo Beach, the community to which MiraBay belongs, have bailed out. Prices are down 26 percent.

- Meadow Pointe, the Tampa Bay region's leading home seller for much of the past decade, once attracted hundreds of investors to its central Pasco homes. No more. Median sales prices dipped 9 percent, among the worst performances of suburbs running the length of south Pasco.

"Investors bought lots of new construction, held for several months and now they're getting at the end of their fun time," said Hillsborough Realtor Craig Eaton.

The fun time has ended for Leonard and Joyce Sondheimer. In October 2005, the Bradenton couple bought a $338,900 MiraBay townhome on Aberdeen Pond Drive. The bayside investment home with stone counters, hardwood floors and stainless steel appliances was sure to appreciate to half a million dollars. Or so the Sondheimers thought.

After a year on the market, no one has nibbled. Their Realtor chopped the price to break even. The tax bill alone on that single investment - $8,900 a year - is draining the Sondheimers' nest egg.

"I was retired and now I've had to go back to work. I've got to pay all these bills," Leonard Sondheimer, 68, said of his new job as a mattress salesman. "It's getting sickening."

To be sure, price declines won't sicken renters and out-of-towners discouraged the past few years by runaway prices. And times are still good for sellers sitting on gains from years past.

A prime example: Of the 18 homeowners who sold in Clearwater's Coachman/Sunset Point area in the third quarter, not one lost money. That included two flippers who bought houses just months earlier.

Clearwater's Tom Byrnes bought a 1,400-square-foot fixer-upper on Pineapple Lane for $175,000 in January and resold it for $230,000 in August. It wasn't all profit. Byrnes spent $25,000 on a roof, stucco and kitchen and bath upgrades. "A year and a half ago, you could put a pile of rubble on a lot and people would buy it," he said.

In St. Petersburg's Childs Park section, the median sales price climbed 13 percent. Realtor Lou Brown said the mainly low-income, black neighborhood was among the last to enjoy the fruit of the boom. Speculators continue to poke around for bargains. Eight fix-and-flip investors accounted for more than a third of quarterly sales there.

But the get-rich-quick atmosphere has already bypassed southeast Hillsborough. As Beggins gathers his agents, he explains the new rules. Look to sales prices from late 2004 or early 2005. Sellers don't want to hear they won't make 20 to 30 percent as before.

"Ninety-seven percent of people selling their homes are p----- off at me," Beggins said.

Jodi and Jeffrey Roberts say they are more angry with themselves. They say they made $310,000 last year, a combination of salaries as employees of MI Homes and gains from flipping investment homes. The home in Gulf Harbors - Pasco's highest flying neighborhood during the boom - drew so little buyer interest that Jodi Roberts moved in with her family of six to wait out the slump.

The $185,000, 1,500-square-foot house in Wood Trail Village north of State Road 54 hasn't fielded an offer of more than $175,000. Roberts is three months behind on payments for a Carrollwood condo she bought in December with no cash down.

"These houses are a ticking time bomb depending on how fast the mortgage companies come after me," Jodi Roberts said.

Are any hopeful rays piercing the gloom? Maybe. Home inventory dipped slightly in September, the first time it had done so in 15 months. Home builders seem to have stabilized prices.

But most sellers and Realtors are bracing for more short-term pain.

Beggins gapes at the bloated listings: 260 homes for sale in FishHawk Ranch, another 125 in Covington Park and 170 more in Bloomingdale. And it could get worse: Sellers holding property off market during the holidays could join the free-for-all in the new year.

Yet there's only one cure for the home price blues: smaller supply and greater demand.

Advised Beggins: "Don't enter the market before you absolutely have to sell."

James Thorner can be reached at thorner@sptimes.com or 813 226-3313. Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751. Matthew Waite can be reached at waite@sptimes.com or (727) 893-8568.