Tampa Bay real estate market screeches to a halt after interest rate hike
ST. PETERSBURG, Fla. - Big changes to the federal interest rate rocked Tampa Bay’s housing market over the last six months. During the summer, buyers missed opportunities left and right. Now they have options, but possibly at a much higher long term cost.
Realtor Amy Heckler said she’s noticed the market turn on its side.
"In January, we had buyers offering to pay tens of thousands of dollars over appraised value, even offering to bring cash to the table, to now sellers are offering to pay points for buyers towards their mortgage interest rates," said Amy Heckler, a broker with Heckler Realty Group in St. Pete Beach.
Heckler said it’s like someone flipped the switch on real estate.
"So it's definitely gone from one extreme to another almost, and we've seen quite a change in the market," she explained.
The latest numbers from Florida Realtors in Pinellas County show a 37.5% drop in closed sales when comparing September 2021 to September 2022. Closings dropped 42.3% in Hillsborough County during the same time frame.
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How long a house spends on the market before going under contract went from 9 days to 21 days in Pinellas County and from 7 days to 19 days in Hillsborough County, from September 2021 to September 2022.
"The mortgage interest rates going up and up and up and in such a dramatic fashion, month after month continuing to go up. I think it created a lot of fear or at least ambivalence among buyers as far as wait a minute, let's wait and see what's going to happen here and see if things are going to settle down," said Heckler. "None of us have a crystal ball, however, we do and have seen the prices drop dramatically."
And it’s a buyer’s market.
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"I would say, if you're looking to buy, now is a good time, especially if you could pay cash," said Heckler. "There's also deals to be made with negotiating with sellers as far as those interest rates."
She added that she’s never seen a shift as quick as the current market, and she expects the trend to stick around and continue stabilizing.
Heckler said buyers have more room to negotiate now, and investors are also coming back into the picture.
"The investment market here has been very, very strong for investors wanting to buy property and fix it up and then sell it and buy it and hold it and rent properties," she said. "However, that slowed down during this spike in prices where I think you're going to see that coming back now as well. So you're going to see investors coming in and purchasing property because the prices are now leveling out."