Tampa Bay Real Estate Market Has Improved - Does That Mean You're Too Late

    As 2012 came to a close, Tampa Bay real estate continued on its upward path back toward a stable market. In fact, as of the end of 2012, the market has actually tilted to slightly favoring sellers. In the month of December, 3,387 homes were sold in the Tampa Bay area with a median price of $126,000. This compares with 3,216 homes sold during the same period last year, a 5% increase in the number of homes closed and, more importantly as a healthy sign of a recovering market, a 15% increase in the median price (from $110,000 up to $126,000).

    At the end of December, there were only 13,884 homes for sale in the Tampa Bay market which includes all of Hillsborough County, Pasco County and Pinellas County. This represents a 23% decrease in the supply of homes available for purchase a year ago at the end of 2011 when there were 18,086 homes and condos on the market. At the current selling rate, the current inventory of unsold homes represents a 4 month supply. A real estate market is considered to be in equilibrium favoring neither buyers nor sellers when there is about a 6 month supply of homes on the market. Thus, the Tampa Bay real estate market can be described for the first time in several year as beginning to move into a seller’s market.

    In large part, the improvement in the Tampa Bay real estate market, particularly in the improving median selling price, reflects the dramatic reduction in the number of foreclosure properties that had been holding back prices for the past 2 or 3 years.

    What does all this mean to “snowbirds” now arriving in our area? It means that the time for making a “low-ball” offers or trying to "bag a real bargain" is over. If, while you are here this year, you see a home or condominium you really like and, you are working with experienced Tampa Bay Realtor who tells you that the home is attractively priced, you should make an offer pretty close to the asking price if you really want the home. Otherwise, you’re likely to find to your disappointment that someone else has just bought that seasonal or permanent Tampa Bay home you wanted.

    Does this mean that you’ve missed your chance to snap up a good deal? The simple answer is “no.” With very few exceptions, foreclosure properties are not the gems they’ve been touted by some to be. Buying a foreclosure or short-sale property is not a straight-forward process. At best, you’ll spend months not knowing when, or even if, the bank will accept your offer. Worse, over 90% of foreclosure properties, especially those still sitting on the market, need a lot of work that you may not be prepared to do yourself or want to spend the time and money to have done for you.

    If you are a snowbird or a retiree who doesn’t have the interest or the months and months to mess around and you’re not a professional fixer-upper, what you more likely want here on the Florida's warm and sunny Sun Coast is a “move-in-ready” home or condo you'll be able to enjoy for many years to come. And, that is exactly what you’ll get, not by opting for a foreclosure or dealing with an amateur "for sale by owner," but by working with a professional Realtor to purchase either a brand new or a resale home that has been properly cared for by the previous owner in a great neighborhood. If it’s a condominium, you want it to be in an established and successful condominium development that has an active condominium association that will protect your investment in the future.

    Cheryl Stimac would be delighted to help you find that one home or condo in a neighborhood or condo development you’ll be proud to be a part of – a home and a neighborhood that perfectly fits your needs and desires at a price you'll know to be a fair value. Feel free to call her for immediate answers to any of your questions at 813-263-6806.

Finally Some Protection for Home Buyers

The recently set up Consumer Financial Protection Bureau (CFPB) has just issued a new rule which spells out the steps home mortgage lenders must follow to offer a mortgage if they want that mortgage to be a “qualified mortgage.”

What is a “qualified mortgage?” A “qualified mortgage” assures the lender that, if a borrower defaults on the loan, there will be little, if any, recourse for the borrower in a future foreclosure on the home to claim that the lender sold them a mortgage the lender should have known they couldn’t afford. In effect a qualified mortgage protects the lender from future borrower lawsuits. But, more importantly, the rule is intended to assure that borrowers can actually afford the home mortgages they sign up for.

Previously, there have been no rules preventing home mortgage providers from talking unsophisticated borrowers, frequently first-time home buyers, into mortgages which sounded “too good to be true” and, in fact, really were “too good to be true.” For example, mortgasges offering "interest-only" payments for the first few years let home buyers think they could afford a certain priced home only to find out a few years later that when the "interest-plus-principal" payments kicked in, they could not afford the mortgage payments. So, they lost the home to foreclosure along with whatever down payment they had invested and their good credit rating.

Other so-called "risky" mortgages included negative amortization. Negative amortization means the borrower’s monthly payment not only is not paying down the balance over time, but, in fact, is allowing the balance due to increase because the monthly payment isn’t even large enough to cover the interst due for that month. This is short of like being in a hole and trying to get out by keeping on digging.

A third type of "risky" mortgage kept payments seemingly affordable by being set up for very long terms like 40 or 50 years instead to the traditional 15 or 30-years. It seemed like an attractive way to make a home affordable but, in fact, the borrower was paying nothing, or almost nothing, each month on the principal amount so that after even 15 or 20 years, the borrower would still owe almost as much as when they bought the home. In effect, instead of the American dream of slowly building up "equity in your home," by making mortgage payments, the borrowers were accumulating little or no equity in the home. They just help make mortgage brokers, who got a commission for talking them into this bad loan, rich. The buyers were accumulating no, or at best, a negligible equity in the home.

The new CFPB rule, scheduled to become effective next year, defines that to be a “qualified mortgage,” the mortgage terms cannot include “risky” features like

• terms over 30 years
• interest-only payments
• negative amortization
• fees and points in excess of 3% of the mortgage amount, or
• result in the borrower spending over 43% of their monthly income on their total debt

Some real estate professionals believe this new rule is still too lenient providing too much protection to lenders from lawsuits but too little protection to unsophisticated borrowers. Low income borrowers, these professionals believe, should not be allowed to get a home mortgage that will increase their total debt payments to as high as 43% of thier income. If these people get such a mortgage, they are very likely to default on it eventually and then have no legal recourse against the shady mortgage brokers who profited by talking them into it.

Conversely, at least now there will be clear rules under which lenders know when they are going out on a limb risking potential future lawsuits when making a loan.

It is not clear that this new rule will loosen credit immediately. Cheryl Stimac, a Tampa Bay real estate professional believes credit needs to be relaxed somewhat to speed up the real estate market recovery. And, it is expected that with this clarification in place, mortgage providers will begin to loosen credit at least somewhat. While many builders and real estate professionals wish for some easing of currrent credit restrictions, no one believes that credit should ever be allowed to get as loose as it was before the “housing bust” of 2008 – 2009. No one wants a reoccurrence of that economic disaster.

If you have qustions about how to qualify for a home mortgage, E-Mail Me or call me directly at 813.163.6806. I'd be happy to answer your questions.

A New Year - And a Stress-Relief Prescription

    Enough Already !! Now that we’re past the “fiscal cliff” and before we get all riled up again about the “debt ceiling,” let’s all take a few moments to calm down and think about something that will both reduce our blood pressure and provide a long-lasting source of stress relief.

    Doctors know that every once in a while, our good health (and perhaps our very sanity), depends upon our ability to “get away from it all” in an environment conducive to a more relaxing and reflective lifestyle.

    Whether you’re up North shivering after shoveling the driveway or in a warmer place but exhausted by the stress of both the Holidays and the foolishness in Washington, DC, wouldn't it be a good idea to take a trip to Tampa Bay, Florida, one of the most beautiful, sunny, warm, and refreshing cities in the United States? This is the perfect time and Tampa Bay is the perfect place to play a round of golf with friends, visit the Florida Aquarium or Busch Gardens, go boating or fishing on Tampa Bay, or watch a sunset over the Gulf of Mexico with someone you love.

    As you visualize these calming thoughts, consider also how easy it would be to translate these thoughts into a more permanent stress-relieving antidote. Purchasing a waterfront, downtown, or golf course condo, villa or patio home in Tampa Bay could be exactly “what the doctor ordered.”

    All of these second home options move almost all of those pesky responsibilities of a second home from your shoulders to an Association which will do all the exterior maintenance including maintaining the lawn and landscaping, keeping the place looking pristine, and even maintaining a heated pool and Jacuzzi for your enjoyment.

    Tampa Bay is a vibrant area with arts and cultural events at the renowned Straz Performing Arts Center in Tampa and the Mahaffey Theater in St. Petersburg as well as professional sports like the Tampa Bay Buccaneers football, the Tampa Bay Rays baseball and the Tampa Bay Lightning hockey and New York Yankee Spring training camp plus thoroughbred horse racing at Tampa Bay Downs. In addition to some of the finest golf courses in the South, it’s also home to interesting and relaxing venues ranging from historic Ybor City in Tampa to some of the most beautiful beaches in Florida on the coastline from Clearwater down to St Petersburg.

    There is every conceivable style of home here in Tampa Bay from multi-million dollar downtown high-rise and waterfront condominiums to quite modest villa homes and condos downtown, in the suburbs, and surrounding our many golf courses.

    One final thought. Once you’ve invested in a second home here in Tampa Bay, when it’s time to retire, you'll already know your way around one of the most attractive cities in the United States to live in. And, you’ll be in a community known for both its excellent health care facilities and an wide range of activities focused specifically on our senior citizens.

    I would be delighted to introduce you to all of the housing options available here in Tampa Bay. Visit my Tampa Bay real estate website, or, for a more immediate response to your questions, call me at 813-263-6806 and let’s get started today developing you own personal, and permanent, “stress relief” program.