IS REAL ESTATE IN TAMPA BAY GOING TO CRASH?

OK, so I admit that I do not have a real crystal ball and I did not seek out a physic.  But after 30+ years in this business I do know a few things…

My opinion is that there is no bubble, no market crash coming and no tsunami of foreclosures headed this way.  Here are my reasons:

First, let's compare today to the real estate market crash of 2008…and talk about the 3 main factors: Lenders, Appraisers and why there are less Short Sales and Foreclosures today...

Lenders: 

Lenders back then (remember we are talking about the crash of 2008) would lend money to anyone that could breathe.  Seriously…anyone and everyone could qualify for a mortgage.  Limited documents needed…no proof of much…poor credit ok…no problem…when do you want to close?

There was little scrutiny and lots of money was given to borrowers that were marginal…that was the start of the mistakes.  Just because someone wants to get a loan does not make them qualified for the mortgage payments.

Many borrowers squeaked in with low adjustable rate mortgages and then could not handle the increased rates when the dust settled.

Lenders today: 

Today there is a lot of scrutiny for financing…only quality borrowers are getting loans. Quality buyers have ample income, good credit and hoops to jump through.  Everything that the borrower claims is carefully verified.

Those that have applied for a loan recently are usually shocked at all the documentation that is required. 

No one is freely handing out loan approvals anymore…

Appraisers:

Did you know that back then you got to choose your own appraiser?  For real. Appraisals were not an arms length transaction…it was the biased buddy system.

Everyone in the Real Estate business knew an appraiser that would provide a favorable appraisal.  

Properties that were overpriced had no problem with appraising at the purchase price…it was rare to get a short appraisal.

Appraisers today:

No longer does anyone get to choose their appraiser or even put in a request for anyone in particular. Appraisals are now more accurate.

Lenders must go to an “Appraisal Management” company who sends out the appraiser…no one knows who it will be.  Many times appraisers are sent from outside the immediate area so they no longer have a sphere of influence for property value.

Short Sales and Foreclosures:

I remember a time when almost everything that we sold were short sales…today, most agents never even find one in MLS.  It is rare that an agent will actually close on one because Short Sales are almost non-existent.

Short sales during a crash were the norm, and if the bank did not approve the short sale, the property would then go into foreclosure. 

It was easy for a homeowner to qualify for a short sale because the qualification scrutiny was spotty at best.  The fact was that on occasion,  buyers could short sale their existing property and turn around and buy a bigger home and still qualify for a higher mortgage.  Hmmm…

Short Sales and Foreclosures today:

Here is why there are so few homes in default:

• Loans are no longer given to just anybody. More qualified buyers are now home owners.
• Appraisers no longer have business relationships with any influence.
• The drastic increase in sales price has given homeowners adequate equity in their property, so sellers do not need to do a short sale or let the bank take it…they simply sell it and still make a profit. 

Will there be a slowdown in Home Sales?

Sure…absolutely.  There already is, due to the increase in mortgage interest rates.  When interest rates go up, there is a fallout of buyers who no longer qualify for a home because their buying power is less.

Will Home Prices go down?

No. I see the high prices as a result of too much buyer demand rather than a shortage of homes.  There are not less sellers, there are just more buyers. 

The pandemic resulted in many consumers now working remotely, able to live anywhere and looking for more living space with a change of scenery.

While local prices are climbing, buyers from the north are finding our homes affordable.

Last but not least, let's take a look at why theTampa Bay Area is so desirable:

Tampa Bay Real Estate is the #1 demand area in Florida and Florida is the hottest state for relocation and incoming residents.  Even Zillow ranks Tampa Bay as the hottest real estate market in 2022.

Tampa Bay is unique.  Florida is called the “Sunshine State” and Tampa is called “The Boating Capital of the World” as it is one of the most popular boating areas in the country. Not only is Tampa Bay huge, it has close proximity to the Gulf of Mexico,with a large number of tributaries flowing into it.

There is never a shortage of boating activities, gorgeous weather year round, fantastic mom and pop restaurants, parks, vibrant arts and culture scene and more.  There is never a shortage of things to do…along with the friendliest people you will ever meet. 

To check out your home buying options, give us a call…

We are a TRUE Buyer Brokerage Office that exclusively represents only the best interest of the homebuyer and never the seller.  

Our commission is paid no differently than any other Real Estate Office: we are paid by the listing office through a co-op fee or directly by the seller at closing.

We look forward to hearing from you!

For more information, or to discuss your needs, give us a call 727-202-9130.  Or schedule a call here.