Still looking for a home?Here’s how to survive Tampa Bay’s tough real estate market

This time last year, the entire Tampa Bay area seemed to be in a homebuying frenzy. However, as we enter 2023, the tide has changed dramatically.

High interest rates, stubborn inflation, and the threat of a recession are forcing many to tighten their purse strings and postpone their homeownership dreams.

December data from the Greater Tampa Realtors showed that home sales in Tampa, St. Petersburg and Clearwater fell 36.9% year over year. This trend is likely to continue until the end of the year when markets stabilize.

We spoke with local real estate experts about how to navigate the home buying process during times of economic uncertainty. Here’s their best advice.

Survey of Home Buyer Assistance Programs:

Buying a home is probably the biggest purchase of your life, so don’t panic. However, there is no perfect time to buy.

Manuela Hendrickson, owner of St. Petersburg real estate brokerage Global Lifestyle, said many first-time buyers make the mistake of waiting for the market to crash and prices to drop.

“That’s not going to happen here,” she said, noting that the Tampa Bay market has grown steadily over the past few years.

Fortunately, there are many incentive programs in place for buyers who are ready to make a long-term financial commitment but need a little extra help to get started.

Hendrickson launched the Florida Hometown Heroes housing program, which offers up to $25,000 in down payment assistance and reduced mortgage rates to eligible buyers in a variety of professions, including law enforcement, educators, healthcare workers, and military personnel. emphasized.

The website of Florida Housing Finance Corporation, which manages Hometown Heroes, has tools to help you determine which national programs you are eligible to participate in.

There are also some local programs to consider, including:

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If you haven’t been able to find a home within your budget on the resale market, consider broadening your search to include specific homes.

“Builders are desperate to sell because they don’t want to lose money on construction they’ve already started,” said Ray Wedge, a professor at the University of South Florida’s Muma College of Business.

This means many builders are lowering their selling prices. Some builders are even offering to subsidize mortgage interest rates for a certain number of months in order to close the deal, Wedge said.

Explore various loan options

Gone are the historically low interest rates that buyers enjoyed early in the pandemic. Jane Floyd of NFM Lending may be tempted to choose the lowest interest rate loan, but she says, “It shouldn’t be the only consideration.”

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Buyers should take a close look at their budget to determine what kind of monthly payments they are comfortable with and how much cash they can afford to pay at closing.

Many lenders have special programs for first-time or low-income homebuyers. All programs have different eligibility and benefits, so take your time and consider them carefully.

“Don’t just jump online and pick the first offer,” said Floyd. “Work with an experienced local lender who can provide all the facts.”

Interest rates have already started to fall from last year’s peak of 7% and may continue to fall, according to Floyd.

This could make variable rate mortgages an attractive option for some buyers. Floyd said many buyers are also considering a 2-for-1 buy-down loan with lower interest rates for his first two years.

Be sure to factor in additional costs

You may be able to afford the full price of your new home, but you also need to factor in home insurance, flood insurance, taxes, and more.

“If you look at the current property taxes on homes, they’re likely to be a lot lower than what you’ll pay next year,” said Carol Hasbrouck, an agent for Charles Rutenberg Realty.

This is because many homeowners receive homestead deductions that limit annual tax increases.

Hasbrouck recommended checking the tax estimator tool on the county appraiser’s website to get a better idea of ​​the taxes you may be paying.

Talking with your insurance agent early on will give you a better idea of ​​the type of coverage you need and how much you will pay.

The Tampa Bay Times has a team of reporters focused on rising costs in our area. If you have an idea, question, or story you’d like to tell, please email us. costofliving@tampabay.com.

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