TAMPA, Fla. — This is a historic housing market in the Tampa Bay area. Usually, rising interest rates on home loans would slow down investors from buying, but that’s not what housing experts are seeing here.
“I have never seen nothing like this,” said Lei Wedge, Associate Professor of Finance at the University of South Florida.
The housing market in Tampa Bay is hotter than ever.
“Homebuyers are having a hard time trying to buy homes and interest rates are on the rise,” said Wedge.
She said investment companies are buying many of the homes here to rent out or flip, making cash offers and waiving inspection fees. They’re able to close within two weeks.
“It’s almost impossible to compete with those cash buyers,” said Wedge. “I think the issue is, one, Tampa we saw such a large population moving in Tampa so we have bigger inflow of population than anywhere else in the country."
Many people are hoping things will cool down soon but experts say that isn’t likely.
The financial crisis in 2007 was fueled by cheap credit and lax lending standards, resulting in millions of homeowners owing more on their homes than they were worth.
That’s not the case this time around.
“The problem is this time right now in the Bay area, about a third of all the homes are bought by investors with cash. So when you have a third of the homes that are already paid off in full, there’s nothing to default because it’s paid off,” said Wedge.
If you do need to buy a home right now, experts say you’ll have a hard time finding anything in the $300,000 price range and below.
“In the 300s you have a lot more competition than the homes in the 400s or 500s. It’s because I think the investors are primarily mostly looking for homes under 400s,” said Wedge.
You will see less competition for homes the higher they’re priced.
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“Basically we saw as the price goes up more, then you have fewer offers, then you have a better chance of being able to get it but of course with a rising a mortgage cost then your mortgage will be higher too so that’s the dilemma homeowners are facing right now,” said Wedge.