Florida Home Shoppers Get a "Do-Over" on History

By Richard Barrington
Local Lender Columnist
May 8, 2008
Ever wish you could turn back the clock--and by more than the one hour you get when we "fall back" every year? Certainly, when Florida home prices were peaking last year, many would-be home buyers probably wished they could turn back the clock to a time before the housing prices were increasing at a breakneck pace. Now, those prospective buyers get their chance.

Survey Shows Some Florida Home Prices at 2005 Levels

A recent survey by Standard & Poors shows that housing prices in Tampa, Florida suffered a 10.1% decline for the year ending August 31, 2007. This is the steepest decline of any of the 20 metropolitan areas surveyed. It is also the steepest annual decline Tampa has experienced in the history of the survey, which goes back to 1987.

In contrast, a year earlier the Tampa housing market had just enjoyed a 14.3% price increase over the prior year. That rate of increase was not unusual, as Tampa had previously benefited from Florida's sustained housing boom. For the five years ending in August of 2006, Tampa housing prices averaged a 14.9% annual rate of increase.

This year, Tampa housing prices declined during each of the first eight months of the year, putting prices back to levels not seen since September of 2005. For anyone who kicked themselves for not buying in at that time, those price levels are now back.

Mortgage Rates are Heading Down Too

Not only are prices back to 2005 levels, but so are mortgage rates. 30-year mortgage rates began November at 5.26%--almost exactly where they were at the end of 2005. Prices and mortgage rates have turned the clock back by two years--and in the process, given Florida home buyers a second chance at a missed opportunity.

Sources:
Freddie Mac

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.