Trade wars, interest rates, extreme weather — all these factors and more could affect residential real estate in the Tampa Bay area this year. Will we see the same trends as in 2018, when prices rose due to a relatively scant supply of available homes?
To get some answers, we spoke with four experts — a Tampa Bay home builder; a top executive with an online real estate service; a vice president of Coldwell Banker; and a Tampa appraiser who had some interesting comments on how the popularity of HGTV’s Fixer Upper with Joanna and Chip Gaines has affected Tampa Bay’s market. (The interviews have been edited for length and clarity.)
Daren Blomquist, senior vice president of ATTOM Data Solutions, formerly RealtyTrac. The Califorinia-based company tracks data for more than 155 million U.S. properties.
“I see Tampa Bay shaping up similar to what we’re seeing in many markets, which is a cooling trend in 2019 with the rate of price appreciation slowing down. When you look at the third quarter of 2018, you have a year-over-year price increase of about 8 percent, which is still very healthy, but in the first quarter we were seeing a 10 percent increase and before that we saw a string of many months that were double digit going all the way back to 2015.
“The Tampa Bay market is still outperforming the national market and many others similarly sized including Phoenix, Charlotte, Austin and Nashville but we’re still seeing that trend toward slowing appreciation, which I think is a good thing. We were seeing unsustainable price growth over the last six years, and if it continued we’d be talking about, ‘Are we in another housing bubble?’ What really stands out is not just the price increase but that the increase in wages has not kept up. (Since 2012, home prices have risen 120 percent in Hillsborough County while wages are up 9 percent. In Pinellas, prices are up 110 percent versus 10 percent for wages.)”
Willy Nunn, president of Homes by WestBay and past president of the Tampa Bay Builders Association. In 2018, WestBay closed on more than 550 houses in new-home communities including Waterset and Triple Creek in Hilllsborough and Bexley, Connerton and Starkey Ranch in Pasco County.
“2018 was an incredible year and I think we will probably be down from 2018. The belief that interest rates were going to rise made the 2018 spring selling season exceptionally strong, and that demand was pulled forward. I think 2019 is going to be a more natural year. We look for the (new-home) market to be around 2017 levels for volume but prices are going to remain high. … It’s very difficult in a strong location to deliver product much under $300,000. In outlying areas, single-family homes may be available in the very low $200,000s but that’s like Hernando County and Polk County.
“There is no getting around this fundamental shortage of shelter at almost all prices. Land is expensive, land development costs are expensive, subcontractors are more expensive. Buildable lots are decreasing, things like flood plain and wetlands preservation take up a lot more land than is commonly considered. We have been affected a little bit by the Canadian lumber tariffs, but the China tariffs could make sourcing certain items more expensive such as lighting and countertops.”
Joni L. Herndon, Tampa-based senior residential appraiser, former chair of the Florida Real Estate Appraisal Board and 2019 chair of Florida Realtors appraisal subcommittee.
“I think 2019 is going to be a decent year, but it’s all about price point. Affordable housing is always going to have a strong market: Anything under $400,000 is hard to keep on the market and agents are having a hard time finding properties. Under $800,000, the interest rate is really very important. A lot of (potential) sellers have very favorable interest rates, some below 5 percent, some below 4 percent. Shaking those people loose out of that favorable interest rate is going to be very difficult as rates go up. I think inventory is going to continue constricting.
“What sells is what’s showing on the Internet. People go to realtor.com and they see that interior that looks like what they see on TV. Those that have the HGTV look, the look that Joanna Gaines does with the grays, the whites, the (white-ish) Carrara marble. She’s brilliant. (Light gray) goes with different fabrics, it changes color depending on if you’re on the water or not. It’s the trend now, it has been the last four or five years, and I think it’s going to continue. The beiges and yellows and gold colors are gone.”
Charles Richardson, regional senior vice president of West Central Florida, Coldwell Banker Residential Real Estate.
“I’m relatively optimistic (about 2019). We still have excellent pricing when you compare our market to other markets around Florida and the country. Our affordability index is still very desirable, we have corporate relocation activity with people moving into the market, there’s still a lot of in-migration. Florida is still going to have a lot of those benefits, they won’t go away.
“That said, inventory is growing right now. There is a little bit of a shift from everything selling in a week to people being very judicious with their evaluations of pricing. There is a great deal of knowledge by buyers because of their access — they can see every listing and all details so buyers are very concerned about making sure they are making the right purchase at the right price. There is a lot of study going into it.”