ST. PETERSBURG, Fla. – Big changes to the federal interest rate have rocked Tampa Bay’s housing market over the past six months. During the summer, buyers missed opportunities left and right. Now they have options, but possibly at a much higher long-term cost.
Broker Amy Heckler said she noticed the market was turning on its side.
“In January, we had buyers offering to pay tens of thousands of dollars over the appraised value, even offering to bring cash to the table, to now sellers are offering to pay buyers points for their mortgage interest rates,” says Amy Heckler, a broker with Heckler Realty Group in St Pete Beach.
Heckler said it’s like someone flipped the switch on real estate.
“So it’s definitely almost gone from one extreme to the other, and we’ve seen quite a change in the market,” she explained.
The latest figures from Florida Realtors in Pinellas County show a 37.5% drop in closed sales when comparing September 2021 to September 2022. Foreclosures fell 42.3% in Hillsborough County during the same time frame.
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The amount of time a home spends on the market before going under contract went from 9 days to 21 days in Pinellas County and from 7 days to 19 days in Hillsborough County, from September 2021 to September 2022.
“The mortgage interest rates continuing to go up and up and up and in such a dramatic fashion, month after month. I think that has created a lot of fear or at least ambivalence among buyers as far as wait a minute, let’s wait and see what’s going to happen here and see if things are going to take off,” Heckler said. “None of us have a crystal ball, but we do and have seen the prices drop dramatically.”
And it’s a buyer’s market.
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“I would say, if you want to buy, now is a good time, especially if you can pay cash,” Heckler said. “There are also agreements to be made to negotiate with sellers regarding those interest rates.”
She added that she has never seen a shift as fast as the current market, and she expects the trend to hold and continue to stabilize.
Heckler said buyers now have more room to negotiate, and investors are also coming back into the picture.
“The investment market here has been very, very strong for investors who want to buy and fix up property and then sell it and buy and hold and rent properties,” she said. “However, it slowed down during this rise in prices where I think you’re going to see it come back now as well. So you’re going to see investors come in and buy property because the prices are now leveling off.”