Industry Boom Luring Many To New Homes
tampatrib.com
By DAVE SIMANOFF dsimanoff@tampatrib.com
Published: Jul 26, 2002
TAMPA - When it came time to buy a new home, Misty and Lee Winter weren't deterred by rising price tags in the Tampa Bay area.
Instead, the Temple Terrace couple took advantage of historically low interest rates, and the increasing value of their existing home, when they bought a new 4,000-square-foot home for them and their three children last month.
``Had the interest rates not dropped as low as they have, we would have stayed in our current home,'' said Lee Winter, a director at the Tampa office of Insignia/ESG, a commercial real estate services company.
``When you look at the monthly payments, they're not all that far apart from a less expensive home at a higher interest rate,'' he said.
The Winters aren't alone. In the Tampa Bay area and across the country, the housing market continues to boom despite a significant increase in home prices - partly because consumers have been able to defray some of the higher costs by locking into mortgages with low rates.
For the metropolitan area encompassing Tampa, St. Petersburg and Clearwater, the median sales price for an existing single-family home was $143,700 in June, up 6 percent from a year ago, according to the latest figures from the Florida Association of Realtors.
At the same time, the average rate for a 30-year fixed mortgage was 6.65 percent, down from 7.16 percent a year ago.
`The Best Investment...'
Low interest rates aren't the only thing fueling the housing boom. Low consumer confidence in the stock market is driving more money into the housing market, said Walter Malony, a spokesperson for the National Association of Realtors.
First-time home buyers, on average, are making down payments equal to 6 percent of a house's purchase price, up from 3 percent a year ago, Malony said. For repeat buyers, the average down payment is 25 percent, up from 19 percent a year ago, he said.
``We think that's a reflection of what's going on in the stock market,'' he said.
Cheri and Bill Holster of Tampa said they considered investing money in the stock market in early September when they bought their house in the Hunter's Green area of New Tampa. Instead, they opted to put that money into the house, taking a 15-year fixed-rate mortgage instead of a 30-year one.
``It's the best decision we ever made,'' said Bill Holster, a senior manager at R.R. Simmons Construction Co. of Tampa. He estimates the value of his house has gone up 10 percent, based on recent sales prices of other houses in the neighborhood. The same amount of money invested on Wall Street would be worth about 20 percent less today, he said.
Looking Elsewhere
Gail Garcia, an agent in the Carrollwood office of Coldwell Banker Residential Real Estate Inc., said she has seen people search for houses in other areas of Tampa after seeing price tags in Hyde Park and south Tampa.
``I see a lot of people looking in Riverside Heights, Seminole Heights and even Tampa Heights,'' she said.
Sticker shock is sending some prospective home buyers to new neighborhoods.
Richard Waugh of RE/MAX Action First in St. Petersburg said some buyers start looking in northern Pinellas County after they get a feel for prices in the St. Petersburg area.
``When they actually see the prices, reality sets in,'' he said.
People looking to move often know that their existing home has gone up in value but don't always realize that houses they might like to buy have also increased in price.
``We have actually taken people out first, before they list their home, to see if they can find something suitable for them,'' he said. ``We really have to warn them - if you're trying to sell your home and make a big profit, that's great, but you have to remember, the people you're buying from want to do the same thing.''
`More Sustainable Levels'
The housing industry continues to thrive, although new figures show the boom might be slowing.
The U.S. Census Bureau said Thursday that sales of new single- family homes were up 12.2 percent for the country, from an annualized rate of 892,000 homes in June 2001 to just more than 1 million homes in June 2002.
Annualized rates, which often are used to report and compare national housing sales figures, reflect what sales would look like for an entire year if that month's pace of sales held steady for 12 months.
For existing home sales, however, sales dropped 4.3 percent for the same period - from an annualized rate of 5.30 million homes a year ago to 5.07 million homes last month, according to the National Association of Realtors.
In Florida, existing home sales were flat. The Florida Association of Realtors reported 14,407 homes sold in June 2002, compared to 14,379 a year ago.
Existing home sales dipped 2 percent in the Tampa Bay area, from 1,474 homes a year ago to 1,447 homes last month. The Lakeland/ Winter Haven area reported 426 sales in June, down 6 percent from 401 sales a year ago.
Housing experts said the existing home sales figures in June show the real estate market is slowing down slightly after a period of exceptionally strong sales.
``After experiencing record highs during the first part of the year, existing home sales eventually were bound to decline to more sustainable levels,'' said David Lereah, the National Association of Realtors' chief economist. ``Even so, we still expect to set a new annual record this year.'' |
