2013 was a banner year for housing start-ups (to compete with existing home sales) in Hillsborough County but a majority of them (2 out of 3) were in areas that may not appeal to all buyers for any number of reasons. These new homes were built in the southern and eastern areas of the county, as well as, 1 out of 4 of them were built in Pasco county. This leaves a whole lot of area in between, that appeals directly to plenty of buyers who want to live and work centrally in Tampa Bay.
This brings us to 2014 and there are 10 changes coming:
Federal Government Loan approval guidelines will now allow a homeowner who filed a short sale on their home to purchase again within 1 year, as long as they are current with their mortgage.
The Consumer Financial Protection Bureau (CFPB), the regulatory agency established in 2010 (2 years after our economic housing bust), has new rules starting January, 2014 that will protect buyers with their home loans. For instance: There will be no excessive upfront points/fees exceeding 3% of the loan amount.
Not allowed are interest-only payments, balloon loans and 30 year + loans.
Debt-to-income ratio, your gross income per month in relation to the amount of debts you must pay off each month, will pay a larger role in the loan approval process. A homebuyer’s total debt cannot exceed 43% of their total gross monthly income.
Some potential (depending which way Congress votes) discouraging news for home buyers and sellers in 2014 concerns the end of tax breaks. What is being discussed: Eliminating the deduction for Private Mortgage Insurance (PMI) provided by private mortgage insurance companies, Rural Purchase Housing, FHA, and VA Loans.
Short Sale or Foreclosure Sales that incurred a Deficiency to the lender, will no longer be forgiven, up to $2 million. Florida does not currently have Anti-Deficiency legislation in place.
With continued unemployment descending, stable interest rates and a rising of confidence in our economy will continue our healthy Real Estate recovery. There is talk of rising interest rates, but let’s face it, with current rates below 5%, homeownership is still a great deal.
According to Lawrence Yun, the chief economist of the National Association of Realtors (NAR), Tampa, Florida is 3rd in the Top 10 Housing Markets to watch in 2014.
With less “cash cow” investors (who already gobbled up properties in 2013 for rentals), there will be a steady supply of homes available for buyers.
Also new rules are being enacted for investors such as: Lenders are now also looking at the quantity (not just the equity they have) of properties an investor owns —before they will loan money to them.
For Investors, who improve and flip their purchases, FHA lowered the amount from $417,000 to $285,000, for a jumbo mortgage in Florida. They will need more upfront cash to purchase, as well, with a minimum of 25% down.
Investors, who plan to use the equity of one purchase to refinance another one, may not be able to get a loan, even with a great credit score, low debt and high net worth. Some lenders are even limiting this type of purchases to only 4 investment properties.
Average rents in Tampa Bay will increase 3% this year to about $900 a month, making home ownership a more attractive option for those that qualify. In Tampa Bay, over 70% of people own homes, rather than rent.
According to the most recent Standard HYPERLINK “http://us.spindices.com/index-family/real-estate/sp-case-shiller”&HYPERLINK “http://us.spindices.com/index-family/real-estate/sp-case-shiller” Poor’s HYPERLINK “http://us.spindices.com/index-family/real-estate/sp-case-shiller”home price index, home prices in the Tampa Bay area, rose almost 6 %, compared with the same time frame last year and is higher than other major cities. Tampa Bay has rebounded since the crash of 2008. According to the Mid-Florida Regional MLS Realtor reports, the median sales price (for existing homes) rose $35,000 since 2011 or more than 9%. That’s good news for sellers in 2014. Buyers now know, it is currently a seller’s market. Because of all of this, there just isn’t enough inventory availability, especially for the discriminating buyer.
FEMA, with its’ increased Flood Insurance Rates (due to low subsidized rates in zones A and V) is going to affect 35% of flood polices in Pinellas County, 20% in Hillsborough county, and 36% in Pasco county. As of January 2014, there were 40,000 homes for sale, put on hold, due to this scare. Fortunately, just passed by the Senate and hopefully by the House, The Homeowner Flood Insurance Affordability Act is the time-out for this flood insurance premium increase, that officially was implemented in October, 2013. An affordability study is going to take place to realize the full impact of this increase.
All being said, Job growth at its’ current snails pace, as well as Income and Wage growth, are still hurting a full recovery from the 2008 real estate bust. Experts say that’s not likely to change quickly…at least not in 2014.