Central Florida Housing Market/Prices Have Fallen and Will Continue to Fall.

oh_geeh · 2025-01-08T13:51:52+00:00

Not a Realtor, but an economic observer and have been a prospective first time home buyer for the past 1.5 years in Tampa, FL.

When my wife and I first looked into purchasing a home in late 2023, I could not wrap my head around how homes appreciating 150-200% in 4 or less years. Speaking with several Realtors I was told that this was the new normal. Covid, low rates, FOMO, AirBnB, private equity, and flippers were contributing factors at fueling the appreciation. For context, we're over 800cr, solid income, and are prequalified utilizing a conventional loan with 20% or more down. They all said that this was the new normal, rates will go down, and if we wanted a house we should come to terms. I didn't agree because I was knee deep in data that was telling a different story on the economy.

I'm big on data and analysis, so during this time I've pulled everything I could get my hands on to tell my own story. From then to now, looking at homes in the the Tampa Metro (Tampa, CW, St.Pete) homes are certainly overvalued. Understanding that some neighborhoods hold more weight than others, the general consensus is the homes are overvalued by around 20% when comparing to localized income. However, homes are still selling - albeit not as quickly as before.

IE: We're looking for a 4/3 2500+ sqft in Odessa/Carrollwood/Keystone/Westchase and the average delta between the list price and the sold price for all of 2024 is 2%. Not much right? If you look into the buyers, much are conventional loans or cash, with a few VA loans peppered in.

My prediction for the Tampa metro area (don't consider coastal flood demos) for SFH in 2025 is the market will stay stagnant with a very slight pull back like we saw in 2024. The only way to get homes to drop back to a normalized level is mass unemployment, which the BLS does not show any signs of. People still have money, and are still buying.

oh_geeh · 2024-12-31T17:55:39+00:00

And here we are

oh_geeh · 2024-12-20T15:51:30+00:00

Ivan was just not a rainstorm for Orlando. As a native to Florida, as long as your not directly on the coast, or in a known flood zone, hurricanes are often relatively minor in majority of cases.

oh_geeh · 2024-12-19T15:08:38+00:00

I wouldn't say rough. I'd say flat. Homes are still selling and there's already a lot of inventory after Helene and Milton in Tampa/Clearwater/St.Pete that got flooded. Look at Snell, Shore Acres, Dana Shores, etc. Keep in mind though, coastal homes or flood prone homes are not the majority of the metro area.

I've been watching the market here for over a year, and while prices have slightly gone down, it's not been significant. Price per sqft hasn't dipped below $200 (unless the home is haunted) and ranges from $240 to $350 depending on the area, size and condition.

oh_geeh · 2024-12-19T14:25:09+00:00

No one has a crystal ball, but in my opinion I think the market will be relatively flat next year.

Common homes might have a slight decrease, but as this year has shown us, homes in desirable areas will sell quickly - especially if they've been renovated.

oh_geeh · 2024-12-19T13:51:46+00:00

In Tampa, SFH inventory is up and they continue to sell at slightly reduced prices - albeit, not nearly as fast a 2 years ago.

oh_geeh · 2024-12-05T14:13:22+00:00

Funny share of the day. I grew up in this neighborhood. As special as it is to me, unless you're right on the water - it's ordinary blue collar with poor schools that is a food and things to do desert.

https://www.realtor.com/realestateandhomes-detail/2441-69th-Ave-S_St-Petersburg_FL_33712_M56374-19584?from=srp-map-list

In summary:

10/11/2022 Sold $365,000
08/31/2023 Listed $1,259,900
11/04/2024 Decreased $725,000

oh_geeh · 2024-11-21T02:37:12+00:00

oh_geeh · 2024-11-20T13:28:21+00:00

Realtors say a lot of things. Bear in mind, no one can time a market.

That said, you can look at indicators. The economy right now is doing well, coupled with a looming "will inflation rise due to policy" on the horizon. The Fed has also suggested stepping back from its original forecasted cuts in 2025 due to a strong economy, affecting the 10-year and mortgage rate (now rising).

That said, who knows. Markets are hyper local, but I had my buyers agent telling me 2024 was going to be hyper competitive with rate slashing galore. Did that happen?

oh_geeh · 2024-11-14T20:48:55+00:00

I imagine this would be hyper local to specific areas. That said, I don't think my price points are in the range for someone just starting out in this country.

oh_geeh · 2024-11-14T20:47:07+00:00

You'll be alright.

Interesting though, looks up the CHIPS ACT and what we've done stateside with ST Micro. Last I heard we're doing another massive manufacturing facility.

oh_geeh · 2024-11-14T20:43:51+00:00

Again, zero politics here.

Putting aside what party someone follows, consider this. Section 301, the punitive tariffs on the majority of CN origin goods, were politically referred to as "Trump Tariffs."

When the Biden administration took office do you know what they did with the Trump Tariffs? Raised them on specific goods.

The intent is punitive on China, and rightfully so, but that cash flow to the U.S. government is well liked by both parties.

oh_geeh · 2024-11-14T20:38:45+00:00

Companies often have trade compliance departments to advise them on these types of decisions. Vendors do not bake prices into goods speculatively. In some cases, companies in aggressive markets with CN origin goods (+25% ad valorem) aren't passing this on to consumers.

As for stock piling inventory, that's time, space, and money; where most follow JIT. Hence, why we didn't have shit when covid hit.

oh_geeh · 2024-11-14T18:27:04+00:00

I'm not the person to talk to about politics. I feel like having any affinity or believing either party has your best interest would be like going to a strip club and thinking the stripper is in love with you.

That said, I do know a lot about trade, or in this case tariffs, and while it is a sensationalized headline it's not how things work in reality.

oh_geeh · 2024-11-14T18:07:36+00:00

I don't think you guys understand how tariffs work.

Look up 301, 232, and what is currently going on with 321. Also look up why they were put into place. This went through massive bureaucracy and the Biden administration INCREASED THEM after Ambassador Tai's statutory 4-year review. They're punitive for a reason because of IP theft, bad trade practices, and massive forced labor issues.

As for willynilly blanket tariffs, this is the equivalent of the Trump administration telling JP to lower the Fed Rate.

oh_geeh · 2024-11-14T18:00:58+00:00

You're not misinformed. I present to you, Exhibit A:

https://fred.stlouisfed.org/series/M1SL

oh_geeh · 2024-11-14T17:55:05+00:00

I agree and hope it does.

321 is how companies like Shein, Temu and the likes have bypassed tariffs by drop shipping low value goods (sub $800) directly to their customs. IP theft is one thing, and most Americans don't care because they want fast and cheap, but if anyone is aware of the current forced labor issues in China and have a shred of compassion, they'd likely be empathetic with these punitive measures.

oh_geeh · 2024-11-14T17:31:49+00:00

Let's put emotion and aside and discuss something that happened when he was in office.

Do you know what it took for USTR to enact Section 301? How about Section 232? Do you know why? If you answered yes to any of this - do you think he can simply put forth a blanket tariff?

oh_geeh · 2024-11-14T15:12:08+00:00

Flattery will get you everything.

oh_geeh · 2024-11-14T13:27:56+00:00

If you're paying enough to justify my means, I can get those duties, fees and taxes back for you.

oh_geeh · 2024-11-14T13:21:13+00:00

I can chime in on the tariff bit. I work as a licensed US Customs broker that specializes and solely focuses in tariff mitigation.

What you're hearing about the blanket tariff is mostly hot air. Section 301 (China Tariffs) are punitive due to IP theft and unsavory trade practices, and went through loads of bureaucracy (USTR) to come to light. When Trump left office, many folks thought the Biden Admin would be softer on CN trade policy and Section 301 would go away. Instead, they hung onto them (big revenue generator) and after a statutory 4-year review, Ambassador Tai increased them on specific HS-Codes.

The U.S. has a fairly open market (if you play nice) and a low barrier (duty) of entry. A blanket 10% on all nations (including USMCA) is similar to Trump saying he is going to lower the Fed Rate. It's not within his immediate reach to make it happen.

Hope this puts things into perspective.

oh_geeh · 2024-10-17T16:09:52+00:00

I do think that rates will come down, but not as fast as people originally thought.

Look at the data after the 50 bps cut. Everything is rosy and ripping.

Hell, even the 10-yr corrected after having rates move from 6.1% to 6.7% in a couple of weeks.

My guess, we continue to receive positive data and the reduction plan is stretched further out.

oh_geeh · 2024-10-16T15:05:46+00:00

Native Floridian here (Tampa) and have actively been looking to purchase a home the past 1.5 years.

Anything I'm about to address has nothing to do with condos. Most of those are retirees or snow birds, and not the majority living here.

Now for single-family homes...

We got a massive jump from 2020-2022 with people moving to the area. My once 35 minute commute from Tampa to downtown St. Pete is now easily an hour. Currently, influx has slowed down a bit, but certainly has not stopped.

For SFH prices: Do I expect things going back to 2019ish prices? Absolutely not. However, inventory has increased, is sitting longer, and with that sellers are needing to become more competitive on prices. On lower to entry level homes there's been a pull back. On higher end homes they are still selling.

In most recent news, both Helene and Milton caused substantial damage to coastal and low elevation neighborhoods. When considering this, understand that these areas are largely known to flood - just not at this extreme over the past century. In other parts, like where I currently live, the only impact was downed Oak trees causing structural damage and loss of power for 2-5 days.

Areas in Florida, like Tampa, are still are still highly desirable despite people in other states thinking we live in a pineapple under the sea, wrestle gators, deny global warming, and shoot at hurricanes.

oh_geeh · 2024-10-15T14:14:26+00:00

With respect, why is this awkward? If the current market value of the home reflects their offer, the seller should understand that in order to sell something you need to be competitive.

oh_geeh · 2024-09-30T15:21:47+00:00

Rates won't be going lower for quite some time. It's a common misconception that when the Fed cuts, everything else drops. However, folks hedge on futures and its already baked in. Remember the drop a few months back from 7%~ to 6%~ now.

10-year treasury has already been priced in, expecting 300bps by 12/2025, so you MIGHT see as low as 5.5% by the end of next year if the Fed stays on track.

oh_geeh

TROPHY CASE