Tampa Bay Real Estate Cools in '06

If you're looking to buy a house in the Tampa/St Petersburg FL (especially pinellas or hillsboro counties) area, you may have to wait till the end of 2007. The once super hot market has been on a steady decline since mid 2005.

Although realtors will tell you, it is with out a doubt a buyers market, the valuation enjoyed by many homeowners has priced many potential home buyers out of the market. In spite of interest rates that remain reasonably low (even though slightly higher than a couple years ago), the biggest problem for buyers isn't available homes, as there are more than double the inventory of just a year ago. The biggest problem facing home buyers as well as present home owners is taxes and insurance issues. Typical property taxes are at least double what they were just a few years ago. For some, even more. An average single family home with 2 bedrooms and 2 baths (1100 square feet) located in pinellas county, had an average annual property tax in the $850 range with the homestead exemption applied in 2004. For those of you unfamiliar with the homestead exemption allowance, it's a reduction of 25,000 on the assessed value placed on the home by the county property tax appraiser. There are conditions that must be met in order to be eligible for this exemption. That same 1100 square foot 2 bedroom 2 bath house that had a tax bill of approx. $850 in 2004, now in 2006 is around $2000. That alone is an additional $100 per month added to the mortgage payment (for escrow). It gets worse!!!

In addition to the tax issues potential property owners / current property owners are dealing with, insurance has become another big issue. With all the hurricanes in the last 2 seasons, very few, if any, insurance companies are writing homeowner policies in the state of Florida period. As a matter of fact it has gotten so bad, that the state has been forced to sponsor it's own backed company so people can even get coverage. It's called Citizens. Not only are the rates outrageous, but the coverages offered are no where near what a typical major brand insurance company would provide a homeowner. My personal home which cost me $750 per year for hazard insurance (not including flood) in 2004, is now almost $2000 per year with citizens. Also, there is no more $500 deductible for damage from a hurricane. Now they charge you anywhere from a minimum of 2% to as much as 4% of your homes value in the event of a hurricane. Wow!!!

Some so called experts say the TampaBay market will stay cool through the end of 2007. Whether it does or not, it seems as though all the homes on the market here presently will struggle to find new owners anytime soon. Unless money is of no object, you will need to have quite a bit more loose change in your pocket to get into a home in this market for a while.

The big winners in the TampaBay market are those who chose to sell there homes from 2004 thru early 2006. Those people not only were able to sell their homes quickly, but got every bit of the valuation afforded them from the tremendous increase in value at the time.

It was an amazing time for the housing market here in Tampa/St Petersburg Florida, but it appears this market will stay opposite of the weather for the foreseeable future, according to some, till early 2008.