Though many people speculate why this is happening, there are no simple answers. We can point to a few things that are complicating the equation. Builders aren’t building lower cost homes, saying material costs are too high. They are spending their money and effort on homes with a heavier price tag. Builders are building, but it’s for those willing to pay that higher price. In the Bel Mar Shores area of South Tampa, small block ranch homes are being replaced by 2 story luxury homes.
Investors in St. Petersburg who bought low during the housing crash have been holding those investments as rental properties. And those who do own homes are using the equity they’ve built to renovate instead of trade up to a larger, more expensive home.
The low supply has definitely driven house prices up, but there is a bright side. Despite the low supply and the higher mortgage, the market here isn’t stagnant -- homes are selling in the Tampa Bay area. Consumers are optimistic, many reports say, and don’t mind paying a little more. January home buying was high, and we’ll have to see where we go from here.
If you want the real scoop on the housing market, talk to us. Cowen Property Group can give you realistic expectations whether buying or selling.