Published: March 27, 2009
Joseph and Daisy Pardo have watched the real estate market for years, yearning to be able to afford a home. With two young children and a baby on the way, their 2-bedroom apartment is more cramped than ever.
They want a home for under $100,000. Lucky for them, homes in that price range are popping up everywhere – even in neighborhoods that have been beyond their reach.
“We really want another room for the baby, but we want to buy something we can afford,” said Pardo, who works three jobs in order to save for a down payment. “I’ve been willing to wait because we don’t want to buy something we’re uncomfortable with.”
The Pardos have their eyes on a 1,600 square-foot bungalow in Seminole Heights listed for $79,900. (It sold for $140,000 six years ago.) It needs work, and the price requires approval from the seller’s lender. But homes like this one give the Pardos hope.
And the Pardo family isn’t the only one cashing in on home deals.
As the Bay area struggles to emerge from the greatest housing downturn since the Great Depression, buyers are benefiting from the slump. First-time homebuyers are getting particularly good deals. They can move fast because they don’t need to sell a home before closing, and they’re taking advantage of the federal government’s new $8,000 tax credit for new buyers.
The Tampa Bay area has seen home sales prices drop 23 percent in the past year to a median sales price of $131,400. Compare that to the market’s peak median sales price of $239,600 in June, 2006. The more affordable prices mean homes ownership is now in the grasps of many who couldn’t buy a home in recent years. Those who buy now also get much more home for their money.
The real estate agent who represents the Pardos said her phone is ringing off the hook with buyers looking for deals. In fact, Stephanie LeFew, of Solaris Realty of Tampa Bay, said about 95 percent of her business is finding homes for first-time homebuyers.
“It’s a great time for buyers,” LeFew said. “It’s terrible for sellers but great for buyers. They’re getting all kinds of deals. All they have to do is ask.”
Sellers lower the prices and some kick in the closing costs to make deals. Builders, she said, offer sweet incentives, too. For example, some are buying down interest rates and adding amenities such as a screened porch enclosure. Some even paint inventory homes for free, if a perspective buyer doesn’t like the color.
The most amazing deals are on foreclosed homes or those sold as short sales, meaning the lender agrees to accept less than the mortgage owed.
A bank-owned,1,400 square-foot condo in Allegro Palm in Riverview recently sold for $48,000. “I thought it would be trashed inside,” LeFew said. “But it was beautiful.”
Everything isn’t rosy, though.
The deals may be amazing, but if buyers can’t get financing it doesn’t much matter, said Rae Catanese, a real estate agent with Prudential Realty. Also, the most affordable homes typically need lots of work and sometimes require approval from the seller’s lender.
First-time homebuyers are finally able to afford to buy in some neighborhoods, such as south Tampa that have been beyond their reach. Still, homes in those neighborhoods remain on the high end, and many first-time buyers opt for condos.
The problem is that the majority of them chose FHA loans and most condos don’t qualify under the federal program’s guidelines. That’s because FHA rules require the condo complex to have a substantial number of units sold.
Some older homes don’t qualify either. For example, Catanese said she’s seen homes rejected for FHA loans because of old wiring or windows that have been painted shut in some rooms.
If a buyer doesn’t qualify for a FHA loan, that typically means they’ll have to put down a 20 percent down payment. In this economy, many buyers aren’t willing to do that, Catanese said.
Even though there are good deals, buyers have to be patient to get them. Short sales and foreclosure homes have to be approved by the lender who holds the mortgage. Sometimes lenders list the home extremely cheap to garner interest, but the lender ends up not approving the sale.
The approval process can take months. This has led some buyers, realtors say, to get their hopes up and then get let down.
“Overall, though, the tax credit and lower prices have helped,” she said.
Catanese points to a 1,200 square-foot Riverview townhome a client recently bought from a builder for $100,000. Another townhome in that neighborhood is listed for $89,000.
The price-point is good news for Michael Rutledge and his wife, April Rose Chevalier. They’ve made an offer on a 1,200 square-foot villa near Carrollwood and are waiting on lender approval.
The home was listed in May 2008 for $155,000. Now, it’s listed for $69,900, and they’ve offered $60,000.
“We’ve been in the market for three or four years but backed off when prices shot up,” Rutledge said. “But for the last six months we’ve seen prices really going down. Finally, they’re low enough that we can afford a house.”
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