Investors are buying fewer homes in Tampa. Here’s what that means for homebuyers

Investor home purchases in the greater Tampa Bay area are down 13% since last summer, according to new data published by the real estate brokerage Redfin.

Taylor Marr, deputy chief economist at Redfin, said that could be an indicator that the housing market is stabilizing.

“So the whole housing market is cooling. It’s reacting, sort of rolling back the high levels of demand that we’ve had throughout the pandemic,” Marr said.

Tampa is among the top 10 U.S. cities by market share that saw lower investor buying in the first quarter.

Records of home sales and purchases in 40 counties across the country were part of Redfin’s data analysis. Investors were defined as buyers with the keywords “LLC,” “Inc.”, “Trust,” “Corp” or “Homes” in its name, according to the report.

In Tampa, investors bought 4,214 homes between January and March. That’s down from a record 5,065 homes last summer, but still above pre-pandemic levels.

Even so, investors were able to maintain a 25% market share, or the proportion of total value in a certain market. This means that even while buying fewer homes, investors have maintained the same value in Tampa’s housing market.

Marr said the decline in investor buying in the housing market can be explained by rising mortgage interest rates, the impact on demand and rising borrowing costs.

“As a result, buyers are just being shut out of the market and we’re seeing a decline in demand,” he said. “And investors are not immune.”

Marr said it could be good news for individual buyers if there is less competition among investors in Tampa’s housing market.

“They behave differently than your typical mother-pop owner,” he said.

The dominance of investors can add upward pressure to the housing and rental markets: driving up housing prices, the cost of rent and the rate of evictions. It is also common for first-time home buyers to be outbid cash offers in an investor-intensive market.

Lei Wedge, an associate professor at USF’s Muma College of Business, said 25% of all homes sold in Tampa were paid for in cash last year. She said that’s a big jump from another peak year in the housing market, in 2006, when 8% of Tampa homes were purchased with cash.

Less competition from investors can be good news for homebuyers. But Wedge said there are other factors that make it difficult to be a buyer in Tampa’s housing market.

“Yes, you have fewer investors. You have fewer people buying. But the problem is… it’s going to cost a lot more on your mortgage,” she said.

Wedge explained that it will be easier for individual buyers to find a home. But it may be more difficult for them to afford it.

This is especially true given the influx of people into the greater Tampa Bay area who are willing to pay higher rent and mortgages. Wedge predicts that the market will eventually meet the needs of this population.

“I think what’s going to happen is the city will eventually kick low-income people out of town,” she said.

Gabrielle Paul

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WUSF Public Media

On Chelsea Street in East Tampa, Antoinette Hayes-Triplett and real estate agent Melisha Patel stand outside a home that is scheduled to close with the Tampa Hillsborough Housing Initiative by the end of the month.

CEO Antoinette Hayes-Triplett said that’s why the Tampa Hillsborough Housing Initiative strives to create innovative housing solutions for the community.

As part of its strategic plan, funded to the tune of $4.7 million by Hillsborough County, THHI launched a shared housing initiative.

“The market has changed the way we have to do business,” Hayes-Triplett said. “And we’re trying to be as flexible as possible and as creative as possible to make sure people have accommodations.”

The shared housing initiative plans to provide 50 three- and four-bedroom units in the Tampa community at subsidized rent for people exiting homelessness.

Last year, THHI purchased and remodeled two homes. Next week, he plans to close two more homes on Chelsea Street in East Tampa. It comes after point data released earlier this month show a 4% increase in homelessness in Hillsborough County.

Hayes-Triplett said the initiative would like to step up its efforts, but the biggest hurdle is closing deals amid inflated property prices and competition from investors in the marketplace.

“Right now we need 60 days to close. At that point, we lost out to investors who pay: cash, invisible site, no rating, no inspections,” she said. “That’s the market we’re dealing with.”

Gabriella Paul covers the stories of people living paycheck to paycheck in the greater Tampa Bay area for WUSF. She is also a member of the Report for America body. Here’s how you can share your story with her.

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