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Don't bet the house on a 2008 rebound

As unappetizing as Tampa Bay area real estate was in 2007, look for additional helpings of glop in 2008.

By James Thorner, Times Staff Writer
Published December 31, 2007

As unappetizing as Tampa Bay area real estate was in 2007, look for additional helpings of glop in 2008.

The new year will be one in which we continue to do penance for the sin of housing overexuberance. Keep an eye on:

PROPERTY TAX REFORM: We get to vote Jan. 29 on what the state calls tax reform. The highlights: Double the homestead exemption - that part of your home's value you don't pay taxes on - from $25,000 to $50,000. And let people take their capped tax levels with them when they move, something called portability. Gov. Charlie Crist has dubbed the proposal, criticized for offering little relief to average homeowners, "Amendment 1." The name's similarity to products like Compound W or Preparation H is a good predictor of its chance of passage.HOME SALES:It's hard to find anyone predicting that Florida real estate will recover in 2008. That doesn't mean homes won't sell. They will. By the thousands. But expect more cries of "crises" and "slumps" as monthly sales reports show declines from the weak figures of 2007. Prices have a ways to fall - further depreciation is inevitable with 41,000 homes for sale in the Tampa Bay area. Few people want to concede that they overpaid for houses in 2005. Even the National Association of Home Builders - they of rose-tinted Ray-Bans - has written off Florida for 2008. Rough consensus? The market won't shed the cement galoshes until 2009.

CREDIT: The recent mortgage sales pitch - no income, no credit, no problem - has gone the way of cigarette commercials touting cancer sticks as "cool and satisfying." The foreclosure explosion, caused mostly by Johnny-come-lately investors and use-your-home-as-a-cash-machine home-owners, may or may not have peaked. But expect more pain in 2008 as adjustable-rate mortgages reset. Tampa's not as bad as other markets when it comes to risky loans, but we have our full share of investors who can't afford to hold their dead-weight property at even the best interest rates. Still, banks being banks, they have to lend money to make money. Tight doesn't always make right.

Read James Thorner's UnReal Estate blog at blogs.tampabay.com/realestate. Contact him at thorner@sptimes.com.

[Last modified December 28, 2007, 20:16:00]