Investors are buying homes in Tampa Bay at record pace
ST. PETERSBURG, Florida
For Lou Brown, a real estate agent for a firm in Midtown St. Petersburg, it was unusual to represent a potential buyer who had lost the home he wanted in a bidding war against an investor.
Now it is harder to think of cases where this has not happened.
“It’s very difficult for regular homebuyers… to compete with investors who go out with their higher bids,” he said. “It is exactly what time it is. “
From July to September, investors bought homes in Tampa Bay at an all-time high, according to data analyzed by Redfin which began measuring in 2000. During those three months, one in four homes that were sold had an investor as the buyer. , for a gross total of nearly 5,000 properties.
Tampa Bay’s share of investor purchases was even higher than the record national average of 18%, ranking it as the seventh hottest metropolitan area for investors nationwide. No other state than Florida had more than one city in the top 10. The Sunshine State had four – with Jacksonville at No. 4, Miami at No. 5, and Orlando in eighth.
This high concentration of investors has made it difficult for regular home buyers using mortgages, which are easily outbid by companies that pay everything in cash, often at more than the asking price. Some of the most active activities take place in the pockets of Tampa Bay which include the few remaining affordable options, charging longtime residents, many of whom are minorities.
Local tenants trying to own property are the most affected, said Sheharyar Bokhari, senior economist at Redfin.
“Not only do they have to compete with other homebuyers coming from New York with a lot more money, but there are also investors who have everything in cash,” he said. “For these people, this is really concerning.”
With house prices growing about 20% in Tampa last year, people are “out of the woods” to make quick cash by flipping, Bokhari said.
“Some markets like Florida and the Sunbelt, they’ve seen a lot of people move there in the last year or so, and these are areas where (investors are) the most present.”
Investors began to become more important players in the real estate market after the real estate crash that led to the Great Recession.
But recent spikes in house prices and rents as well as stock market volatility during the pandemic have made investing in residential real estate even more attractive, Bokhari said. Flipping and renting houses are two lucrative propositions.
Redfin defines “investors” as buyers with certain keywords in their name, including “LLC”, “Trust” and “Corp.” Which aim to capture both large institutional real estate investment firms and parent and pop companies. Redfin compiled its data by combing through the county property records.
Chris Lai, a Tampa real estate agent with People’s Choice Realty, has noticed more investors. And recently they have started to behave in new ways. For a while, these buyers would focus only on new construction. Now they are also salvaging old homes, he said, and are generally interested in anything under $ 500,000. For these properties, investors are prepared to exceed the asking price, he said.
“It’s not the good old days,” Lai said. “They are ready to exceed appraised now. It never was, but… they’re here for the long haul. “
The high investor interest is good news for some, including homeowners who see their homes’ value skyrocket, said Michael Thompson, a Pinellas-based real estate agent with Keller Williams.
“People who maybe bought their house three or four years ago (…) are already sitting on gold mines,” he said. “All of this is being driven, in my opinion, by these hungry investors, cash buyers, first time buyers.”
All the activity is another indicator of the skyrocketing increase in the desirability of Tampa Bay for people flocking from across the country, Thompson said. Even though Tampa Bay prices have skyrocketed, they are still relatively cheap for people traveling to high-cost cities of New York and California, fueling “loads of cash purchases,” he said. declared.
Yet Thompson also represents a first-time buyer who has been looking for a home on and off for nine months. His client was recently beaten over a house in Clearwater for which he had offered $ 10,000 above the asking price. It closed for an additional $ 70,000.
“It all depends on which side of the fence you’re on,” said Thompson. For regular shoppers, “he created this Wild West, sort of a chaotic downtown cowboy shootout.”
Some Tampa Bay zip codes are particularly magnetic to investors, according to Redfin’s analysis. St. Petersburg’s 33712, where Brown’s office is located in the southern part of the city, ranked No.1 with 37% of its third-quarter purchases coming from investors. The number 2 was 33570 in Ruskin at 35 percent, and the Ybor City zip code 33605 was in third at 34 percent.
These three zip codes have higher percentages of black or Hispanic residents and lower median household incomes than the Tampa Bay average, according to census data.
Brown, a longtime St. Petersburg resident and real estate agent, said he understands cheaper homes in his area are good values. But the high concentration of shopping also drives up costs for the many black families who have lived there for years, many of whom are renters.
“It was the zip code that suffered the most, that suffered all kinds of declines from the 1950s onwards. As African Americans moved into neighborhoods, whites moved and there were more. difficult to obtain financing, property values were falling, ”he said.
Brown said he’s seen similar trends in other cities across the United States, but it’s been “interesting” to see them happening “right in front of you.”
“Before, everyone was investing on the north side, until it was saturated, then they came from the south side,” he said. “To hell with affordable housing. “
Brown said today’s trends are almost the opposite of white theft.
“Sometimes there is a feeling of urban remoteness because they wait for the property to reach its lowest level and for the lower end of the (income) scale to live there,” he said. he declares. “All of a sudden, the inhabitants who were there are no longer there.