When Lisa Gilmore-Sarnowski and her husband began shopping
for their first home, they knew the mantra well: Now's the time to buy.
Having moved last year from Chicago, the couple believed
Florida held, as Gilmore-Sarnowski said, "this amazing abundance of little
gems" tossed aside in the market crash.
Their hunt quickly turned frustrating. Most homes they found
were already under contract or outside their $150,000 price range. Their best
find, a St. Petersburg bungalow, was practically falling apart.
"Honestly, it feels like we're a day late and a dollar
short," said Gilmore-Sarnowski, 26, an interior designer whose husband,
David Sarnowski, is a Tampa police officer. "All that's left is
leftovers."
In a housing market notorious for foreclosures and walk-aways,
a surprising new truth has emerged: Too few desirable homes are for sale.
In June, Tampa Bay had a five month's supply of houses,
townhouses and condos for sale, meaning it would take about five months to sell
it all if nothing else came on the market.
In Hillsborough County, where supply topped two years in
2008, the number of for-sale homes has plunged to about three months, half the
size of a healthy market.
Inventories across the country, steadily sliding since 2007,
are now at a six-year low, National Association of Realtors data shows.
Supplies are particularly tight for low-cost homes and in
high-demand neighborhoods.
Low inventory can lead to a seller's market, including
higher prices. After years of sinking values, that's good news for sellers,
some of whom have seen bidding wars.
But competition over the record-low inventory is leaving
buyers, including those jump-started by low interest rates or the belief the
market has bottomed, underwhelmed by the dregs.
It's also pitting first-time buyers looking for low-cost
starter homes like Gilmore-Sarnowski against investors, from Europeans seeking
safe haven and Northeastern hedge funds to locals in pursuit of cheap rental
properties.
Those bullish about housing's recovery, including billionaire
investor Warren Buffett, are aggressive and pay with cash, allowing them to
outmatch conventional buyers who depend on financing.
Squeezing the supply are homeowners waiting to list their
homes, betting future price increases could net them a better deal, real estate
agents said. Others worry that even if they did sell, tighter standards for
securing bank loans could prevent them from buying another house. And gun-shy
builders are unveiling few new homes; nationally, new-home inventory dropped in
June to a staggering 50-year low.
Florida, in particular, has its own challenges clamping down
on supply. Nearly half of all Tampa Bay homeowners are underwater, owing more
on their mortgages than their homes are worth, making it difficult to sell. And
one in eight Florida homeowners are more than two months late on their
mortgage.
Another brake on supply: Banks are unloading foreclosures in
dribbles to capture higher prices.
Though Tampa Bay foreclosure filings climbed last month,
it's unclear when recently repossessed homes could return to the market. Court
and lender backlogs have delayed new listings, and banks that already wrote off
their losses have little incentive to re-list homes at a low price.
Where once market-watchers feared the so-called "shadow
inventory" — seized homes that, if listed in bulk, could drag down prices
— agents now clamor for more listings. The local supply of bank-owned homes has
been cut in half since its March 2011 peak.
We still have buyers looking for the bottom. I told somebody
today, you missed it," said Century 21 Realtor Jaci Stone. "There was
a time when people were desperate. . . . It's not here anymore."
Real-estate giants are moving to sop up demand, with
homebuilder Taylor Morrison planning more than a dozen housing communities and
new phases across west Florida. But housing supplies don't expand overnight.
Rising prices could prompt reluctant homeowners to sell, and
banks could increase the flow of repossessed homes, boosting the supply. But
for Gilmore-Sarnowski, that could be too late. She and her husband plan to keep
looking for a few months, but the slim pickings have them rethinking their
search.
"We're to the point where we're thinking," she
said, "maybe we should find somewhere inexpensive to rent."
Copyright 2012 Tampa Bay Times