Tampa prices showed strong improvement in November with the
median price of single-family homes up 21.7% over November 2011. While condos
were up only 6.9% in the same period, This follows an October price that was
fully 22% above October 2011. Average prices for single-family homes and condos
were up a more moderate 16% and 18% respectively.Click for full statistics report
Looking at the long-term price charts shows a definite
bottom in the market at January 2011. Prices in 2011 showed considerable gains
prior to being eroded by the seasonal retreat at the end of
the year. At the end January 2012 showed only a 2.8% improvement for homes
and 6.3% for condos over January 2011. Since that time however the numbers have
been far more impressive in many cases posting double-digit year-over-year
gains. The market has also shown surprising strength in the final months of the
year giving up very little if any of its earlier gains and providing a
strong foundation For the price growth that typically takes hold in the spring.
The numbers in relation to some insular examples are
even more impressive. Take for example our most popular building the Quarter atYBOR. In Spring 2011 we commenced buying 600 square-foot one-bedroom units for
approximately $40,000 in foreclosure sales. By fall 2012 similar units
sold for an excess of $74,000 in foreclosure sales. Still they are a fraction
of their 2007 peak price of over $180,000.
One point that sticks out from the November statistics
appears on the last page or the lender mediated overview. This charts the
number of distressed sales of the percentage of the global market and shows a
marked decrease in the latter half of 2012. Yet still in November
lender-mediated or distressed sales accounted for 36.7% of the global market.
While the volume of foreclosure sales was up almost 35% over November 2011
short sales showed only a 13% increase. At the end of December 2012 provisions
will expire and forgiven debt will become taxable as income again. It
remains unclear what if any effect this will have on the
distressed market.
On a more subjective level, a recent trip to Tampa
revealed some interesting developments, most notably the amount of
construction activity. Similar to Toronto there is a increasing trend towards
urbanization and redevelopment of areas in proximity to the downtown core.
Unlike Toronto however there is very little high-rise development. Instead
areas of older homes are being demolished and replaced with larger, newer
models. The older homes that remain seem poised for appreciation and in any
case make excellent rentals as they have very low cost attached to them. In
many cases we saw older properties with rentable structures for less than the
cost of serviced lots.
The building activity did not end in the city. On a trip to
Brandon, about 15 minutes southeast of Tampa we noted a lot of construction at
site of townhomes being built by Lennar. We went to the sales office and found
that the remaining examples were selling briskly in the $100-$110 per square
foot range. We then drove around those parts of the complex that were already
built and true to the representations made, the units appeared to be
all occupied. Well we were somewhat surprised that they were able to build them
so inexpensively, we nonetheless continued across the street to inspect
the units that had just been purchased for $65 per square foot, built in
2006.
If buying at these discounts seems too good to be
true, in fact there are several catches involved with it: Firstly, it is
extremely competitive, so be prepared for multiple offers on almost everything
and having very little choice in which property you end up with. And cash only
please. No need to consider offers which are conditional on financing
that may or may not happen. The result has been to create a bifurcated market,
The typical market for new homes driven by access to credit and the investor
(distressed) market which is driven by all cash transactions.
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