A Behind-the-Scenes Look the Nation’s Hottest Real Estate Market…Tampa!
The Tampa-St. Petersburg area is The Hottest Real Estate Markets for the Next Five Years, according to a Time magazine story this month.
The article cites Moody’s Analytics, projecting the Tampa-St. Petersburg region’s home prices to make an astonishing jump of almost 9 percent this year. Steady increases are forecast for the coming four years, with prices getting up to a 3 percent boost each year.
Have you ever wondered how this scenario plays out in real-time? Here is a look at some of my clients. I love my clients and their joy at finding just the right home for themselves. I also appreciate the energy and prosperity they bring to my work as a Realtor. The Tampa real estate market is good, very good! By the end of the first quarter of 2016, I had already closed almost $3 million in sales.
So… Who are these buyers?
Buyer #1: First, let’s look at a semi-retired military person who just got a job at MacDill Air Force Base and moved his family from Georgia. They were looking to enjoy life in the Sunshine State. Good schools were a top priority for his family. With a budget of up to $600,000, they stressed a desire for a family oriented neighborhood. They determined that the Westchase neighborhood had everything they were looking for in a community while still being close enough to the base for an easy commute. The golf-course, pool home they purchased was a four-bedroom, three-bath with almost 3,000 square feet of space. The home listed for $574,000 and sold for slightly less than asking price. The couple plans on retiring here when their children are grown.
Buyer #2: A former executive, also semi-retired, was done living up north where he had to pay state income taxes. He had scouted for a home in Miami and Jacksonville before settling on the quaint but upscale Snell Isle neighborhood just north of downtown St. Pete (just two miles) with its cafes, boutiques, museums, restaurants, galleries and events. Tampa International Airport is only 25 minutes away.
When we started working together in October, I soon realized that his $1 million budget was not going to get him the home he desired, as the area was lacking homes with the modernistic style he sought. Having a one-story home was also important to him, so that made my job even tougher. Many newer homes in Snell Isle are two-story because builders are maximizing the space. Most of the homes dating from the ’50s are one-story but lack the size today’s buyers are looking for.
My client’s criteria was 3,000 square feet of space, three bedrooms, two baths and an office. After months of looking at existing inventory and new construction spec homes, he decided that buying a tear-down and building a custom home was his only option. Cost of the tear-down? For .25 acres on a nice street where other new-construction homes were being built: Just under $500,000.
My client is expecting to spend about $700,000 on a new construction home, which will make his total investment $1.2 million.
Buyer and Seller #3: This client was a homeowner who had been approached by a “Realtor/Investor”. She owned a house that was considered a tear-down in an up-and-coming neighborhood south of Gandy Boulevard in Tampa. (To give you an idea of home prices in that neighborhood, a builder had invested $95,000 in a .19 acre lot, on which they plan to build a new four-bedroom, three-bath house with 2,200 of square feet and a sale price of $419,000.) With land at a premium in Tampa, St. Pete and Clearwater, builders are sending mailings to homeowners asking to buy their homes.
One builder I met with said as many as 30,000 letters per month are being sent out. If you receive one, it’s always best to contact a Realtor such as myself to guarantee your own representation (and safeguard your interests) during negotiations.
The seller in question received an offer of $25,000 less than what she eventually settled on for her tear-down. Luckily she called me after receiving the letter, and, needless to say, she did not take that initial offer. I was able to gain for the seller a fair-market value. I did this by approaching a reputable builder instead of proceeding with the house flipper. The moral: Be cautious! There are a lot of scammers out there and flippers who will prey on unsophisticated sellers.
As you can see, pricing varies based on location. The more popular the location, the more the buyer will wind up paying for a home or land. One last point to add is that new construction has been especially hot among buyers. Last year almost half of my sales involved new-construction homes and condos. The supply is limited, however. I would say half of the new construction I closed on was never even listed.
Getting a savvy Realtor who can get to the right people is key!
Regular readers of this blog know that I have consistently stated that the time to put your home on the market is now. With prices rising dramatically, you now know for sure that I have not been crying, “Wolf!” In fact, real estate writer Susan Taylor Martin of TampaBay.com reported of the Tampa Bay area last month: “The median price of a single family home jumped to $180,000, a 16.1 percent increase from the same month a year ago. That follows January’s year-over-year price jump of nearly 20 percent.”
She points out: “House-hunters continue to clamor for property in and around downtown St. Petersburg, which is drawing national attention for its lively culture and restaurant scenes,” and “The most expensive bay area homes sold in February were both in Tampa.”