ST. PETERSBURG, Fla. — To buy or not to buy? That seems to be the question for lots of people sitting on the Tampa Bay sidelines and renting for now. Competition in the housing market is cooling off giving would-be buyers some relief, but with interest rates rising, hesitation to invest is growing.
Elisha Lopez, Broker/Owner of Ocala Realty World says she’s definitely seen a shift in the housing market. “A year ago we had offers before it even hit the market.”
The trend of off-market bids and over-asking price offers has come to a halt, but the home prices have not. Florida Realtors Quarter 3 data shows, the Tampa market saw sales drop more than 26 percent year over year but the cost of single-family homes increased nearly 19 percent, to a median sale price of more than $405,000 dollars.
Associate Professor of Finance at USF Lei Wedge says the current market is unaffordable.
She teaches an investment class at USF and says unless you’re paying cash, climbing mortgage rates are crushing buyers. Mortgage rates in Florida are now around 7 percent for a 30-year fixed loan.
“Just the principle interest is over $2000 dollars. For a 1,700 square foot home, people are spending almost $3,000 dollars on a mortgage, that’s unheard of,” she explains. For now, she cautions buyers to wait for home prices to level out.
Lopez says there are silver linings if you can find a price you’re comfortable paying because the competition has slowed.
“The good news really is, with the rates higher, is that you could refinance one day. We don’t know when, but you can. But if you pay a higher price point for a property, you can’t get rid of your loan, other than paying it off. But you can reduce your interest rate,” Lopez explains.
She says sellers are also starting to negotiate with buyers again. “The trend that we’re actually starting to see, which we knew would come back, is sellers paying closing costs again for buyers.”
While experts expect the rising mortgage rates to continue to impact sales, Florida realtors say they do expect a strong November and December for sales as real estate rebounds from the hit it took in September and October from Hurricane Ian.