Tampa Bay Housing phenomenon

A home for sale at 3304 W. Alline Ave.
By JOSH POLTILOVE | The Tampa Tribune
Published: February 29, 2012
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SOUTH TAMPA --

There aren't many short sales and foreclosures in South Tampa neighborhoods, but if you find one you likely can get it for a bargain — relatively speaking.

Short sales and foreclosed homes come with their own set of complications for buyers, but they generally sell for hundreds of thousands of dollars less than typical South Tampa homes.

Still, records show that short sales and foreclosures in South Tampa are pricier per square foot than homes without those labels elsewhere in Hillsborough County.

"Clearly the buyers and sellers still believe there's a premium on real estate in that area considered to be South Tampa," said county Property Appraiser Rob Turner.

The nearly 600 houses without foreclosure issues that sold last year north of Gandy Boulevard in South Tampa cost an average of about $370,000 each.

There were 86 short sales in that same area, and those homes sold for an average of $245,000 — a 34 percent discount from market price. The 44 foreclosures in that area, meanwhile, sold for an average of $163,900 — a whopping 56 percent discount.

A home without foreclosure issues in Hillsborough County sells for an average of $87 per square foot. A South Tampa short sale north of Gandy sells for an average of $137 per square foot, while a foreclosure sells for $110 per square foot.

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A short sale is when a homeowner owes more than his property is worth and he tries to ask his lender to take less money that what had been owed for the home. The homeowner still owns his property and even when a sale is potentially approved by the lender, he still has the ability to decline the sale.

A foreclosure is a home taken back by the lender because the homeowner is unable to pay the money owed. When a lender tries selling the home, the homeowner has no power — in fact, he isn't even the homeowner anymore.

A short sale might give a potential buyer a home at a discounted price, but the downside of buying such a home is the long wait for the sale to go through. It could take anywhere from a few months to several months to make the purchase as buyers wait for lenders to agree to a steep reduction in price from the home's previous value.

Short-sale buyers also have to deal with a lot more red tape to buy their home. They must work with everyone from the servicer — the company that handles the mortgage — to investors who actually own the mortgage, and the private mortgage insurance company that insures the mortgage itself.

"What kills the deal is the wait, typically," said Michael Ceparano, a Tampa-based realtor who has negotiated hundreds of short sales for the short-sale owner. "I've gotten deals approved in 16 days … I've had a deal take a year. It's just a matter of who you're dealing with."

With foreclosures, a property potentially could fall into disrepair after the prior homeowner leaves or decides to stop paying his mortgage.

"If I could get it at the right price and I did the right inspections, absolutely I'd a buy a foreclosed home," Ceparano said. "But a lot of the time you've got to watch out for things like mold because the house has been sitting empty for so long. Plus the lender doesn't have to tell you anything because they typically don't know anything."

Short sales and foreclosures south of Gandy also are relative bargains.

The median market sales price for the 227 single-family homes sold south of Gandy last year was $130,000.

The 52 short sales south of Gandy went for an average of $76,000 each — a 42 percent discount from market price. The 44 foreclosure sales were an even better deal, selling for an average of $61,000 each — a 53 percent discount.

Countywide, 30 percent of single-family home sales were short sales or foreclosures last year.

In South Tampa, roughly 20 percent of all single-family home sales were short sales or foreclosures.

Before the housing market boomed and then dropped, the market was considered "normal" and less than 5 percent of home sales came by way of foreclosure or short sale, said Tim Wilmath, director of valuation for the property appraiser's office.

Wilmath's office had disregarded those sales. That's no longer the case.

The good news for South Tampa homeowners north of Gandy, though, is that it appears a lower percentage of home sales will come from short sales or foreclosures in 2012. That's a sign the housing market is doing better.

Of the 297 homes on the market in South Tampa early this month — excluding homes south of Gandy — 11 percent of the homes were potential short sales or foreclosures.

In the future, Turner said, he expects the housing market to improve in South Tampa, and for the number of foreclosures and short sales to dwindle.