Challenges Persist for Homebuyers in Tampa Bay Region as Market Slows and Prices Remain High

The Tampa Bay housing market has been a tough nut to crack for would-be homebuyers this year. With rising mortgage rates and steep asking prices, many are finding the dream of homeownership out of reach.

Despite a considerable cooling of the market since 2021, when low interest rates spurred a surge in sales, the slowdown has not provided the relief that buyers were hoping for. According to data from Greater Tampa Realtors, home sales in Tampa, St. Petersburg, and Clearwater have fallen by 9.1% year over year, with homes staying on the market for longer periods of time.

Lei Wedge, a finance professor at the University of South Florida, noted that the increase in mortgage rates has deterred some buyers. “We were expecting high interest rates to lead to lower home prices, but that hasn’t been the case,” she said. In fact, the median sale price in the Tampa metro area has increased by 4% since last year.

Manuela Hendrickson, a broker and owner in Pinellas County, pointed out that there is still a shortage of homes on the market, with active listings dropping by 17.4% compared to last year. This lack of inventory has kept prices high, with only a 2-month supply available. Hendrickson believes that in order for the market to shift back in favor of buyers, there needs to be a 6-month supply of homes.

While some potential sellers are hesitant to list their homes due to being locked into lower mortgage rates, Kristine Smale from Zonda predicts that prices may have peaked. However, even if prices do come down slightly, they are unlikely to return to pre-pandemic levels.

For buyers looking to make a move now, exploring new construction homes may be a viable option. Builders are reportedly facing slower demand than expected and are offering incentives such as covering closing costs or providing mortgage buy-downs to attract buyers.

Overall, the housing market in Tampa Bay continues to present challenges for buyers, with no clear indication of when mortgage rates may decrease. As the year progresses, buyers may need to navigate these headwinds and consider all available options to secure their dream home.