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How can you still succeed and Buy a Home with these pesky HIGH Interest Rates?
So you found an article that promises to explain why you should buy a home in Tampa Florida when everyone else is running for the hills. It may be pretty scary to take the plunge, as so many other buyers seem to be pulling out of the market. But with a little education, understanding and persistence, your luck in finding that dream home may be just around the corner…and the anxiety could be out the door!
Since the recent federal interest rate hikes, it seems as if the real estate market has completely collapsed. Just last year at this time, home prices in the Tampa Florida area were at an all time high, interest rates were at an all time low, and that meant selling a home created lots of options for the seller, and lots of “risk” for the buyers.
In order to compete in that market, you were facing having to offer $100k or more over list price. Buyers would also have to waive their finance contingency, waive their appraisal, and just forget about asking for a home inspection. Hey, also give the buyers as much time legally allowed in FREE rent-back.
Buyers might be granted an opportunity of a 15 minute time slot to view the home, if they even had a chance to do that. Sellers in this market were removing the “Coming Soon” sign and replacing it with a “SOLD” sign, as many homes went under contract sight unseen before even hitting the active market.
Well, those crazy real estate days are over. And that means as a buyer, you may have some of your power back. But now, buyers are feeling the crunch of the mortgage rate hikes, and thanks to the Fed trying to slow inflation, they may have just put a damper on your home buying chance…OR HAVE THEY?
Why Did the Real Estate Market Slow Down? Should I still Buy a Home?
Well the short answer to “what happened to the real estate housing market”, is the interest rate. And the short answer to “can I buy a home” is YES, it’s actually a great time. But in order to fully understand everything, you need to take in consideration the past 3-4 years of the market boom. First off, the real estate market did not stop or did not crash at all. Closings are still happening at or around the same rate as before most people began noticing the slow down occur. What actually happened is, an entire pool of home buyers, at every level of the market, just simply became deflated, and gave up.
What do you mean “deflated”, you ask? Well it’s pretty simple. Home buyers were running around the Tampa Florida area with locked in interest rates at or around 2%. Their buying power was very impressive, and with such a low interest rate the average buyer in our market was looking at homes that were larger and in the desired areas they dreamed of living. Home prices sky rocketed due to the demand.
It was a great time to be a home buyer. Or was it??? Home buyers, in order to take advantage of this opportunity, had to trade a lot of “risk” for the potential of a great “reward”. Buyers risked not conducting a home inspection and basically agreed to purchase the home “as-is” with no idea what they were getting into. Some buyers got lucky, and some buyers ended up with homes that needed a lot of repairs. Virginia is a “Buyer Beware” state and if the buyer waives the risk of an inspection, the liability is all on the buyer.
But add to that, the sellers in this market wanted absolutely no contingencies. So your offer was not getting accepted without waiving your finance and appraisal contingency. That meant buyers had to also have cash to cover a low appraisal.
If you were trying to take advantage of a VA Veterans Loans or an FHA loan, your offer would most likely go below all the conventional offers because VA and FHA loans require some of those things conventional loans were able to waive. Greedy little sellers , aren’t they? Well, not really, those sellers needed the assurance that their home was sold, because they most likely had to do the same thing to the new home they were purchasing somewhere else. It was a domino effect that continued up the chain of real estate.
So where did all the Home Buyers Go?
Simply put, the majority of home buyers just gave up. Think about it. Buyers were making offers on $1.2 million dollar homes with 6000 square feet and all the beautiful finishes. But the interest rate hikes reduced their buying power to smaller single family homes now priced around $850k.
They went from “WOW” to “oh” really quick. Those looking at the $850k single family home price range, went to now only being able to afford a town home for $450k-$500k. They also went from “WOW” to “oh”. They simply realized the interest rates wenr up and the home prices did not go down as quickly. Buyers could no longer afford the home they were able to buy just 6 months earlier. The longer they waited, the worse it got.
So for a few months the market in our area got really really quiet. Crickets! Sellers that missed the boom and that would not reduce their selling price, watched their homes sit with no showings and no interest. For the first time in years, listings began to expire and go off the market. Sellers were scared to list their home and buyers were scared to make any moves. “Let’s just see what happens” became a very common saying for both sides.
Buy a Home With Colton
Buying a home in South Florida can be a daunting experience, whether it's your first time or your fifth. Each situation is unique, and the right Realtor or Real Estate Agent can save you both stress and money.
Colton Elliott and the hand-selected agents on the BUY WITH COLTON® team are all licensed REALTORS, highly trained negotiators, and have years of experience in every aspect of the home-buying process. Colton and her team specialize in South Florida, Tampa, Saint Petersburg, Odessa, and Lutz. Call Colton today and let’s get started!
About Colton Elliott Realtor
Stop Renting. Everyone has a path to home ownership
First Time Homebuyers" Dare to Own the Dream" (DARE) Housing and Community Development Division
Stop Renting. Everyone has a path to home ownership
Have you ever thought about owning your home instead of renting someone else’s? Most First Time Homebuyers think they need to save up thousands of dollars for a substantial down payment. But that may not be the case. Ever heard of Down Payment Assistance Programs? These programs may grant you the money for the down payment of your first home. These types of grants are not required to be paid back. They are free money and are available to assist with your first home down payment. In most cases, you could buy a home with less than what you pay for 1-2 months rent. If you rent a house for 2 years at $1900 per month, you’re paying close to $50,000.00 to live. Wouldn’t it be smarter to be building equity with those payments? Did you know that most people can qualify for a loan and most people do not an need excellent credit score? The only way to know what you may qualify for is to ask! Everyone has a path to Home Ownership. Stop renting and start owning your own home. I’ve worked with many First Time Home Buyers and would be happy to help you navigate the process of buying a home from beginning to end with ease.
Let’s go home shopping! Call BUY WITH COLTON today to start your home buying journey. We can even recommend the right lender that might fit best with your needs.
Military Relocation (PCS) PCSing? Don’t Stress!
First Time Homebuyers" Dare to Own the Dream" (DARE) Housing and Community Development Division
Stop Renting. Everyone has a path to home ownership
Colton is a Certified Military Relocation Professional by the National Association of REALTORS®, and she’s dedicated to getting you relocated quick and with no hassle.
If you are a military family with orders, we understand the stress that can occur when you need to rent or buy the right home for your family on a small timeline. But no need to worry, We’ve got it all mapped out for you and we are waiting for your call. Close to Macdill Air Force Base? Can’t make it here to view the home? No problem….We offer Skype or FaceTime and will do a private video call tour of the home with you. Let Colton make your move as easy as possible. Just give us a call at 703-489-2129 and let’s get started today! A REALTOR® with the MRP certification understands that when military staff and their families relocate, the services of a real estate professional who understands their needs and timetables makes the transfer easier, faster, and less stressful. The MRP certification focuses on educating real estate professionals about working with current and former military service members which helps their clients find the housing solutions that best suit their needs and take full advantage of military benefits and support that are available.
Service members and veterans who hire REALTORS® with NAR’s MRP certification will have increased confidence that the REALTOR® will understand their specific real estate requirements and processes as well as understand available finance benefits and support.
First Time Homebuyers" Dare to Own the Dream" (DARE) Housing and Community Development Division
First Time Homebuyers" Dare to Own the Dream" (DARE) Housing and Community Development Division
First Time Homebuyers" Dare to Own the Dream" (DARE) Housing and Community Development Division
"Dare to Own the Dream" Homeownership Program
The City of Tampa offers down payment assistance loans to income-eligible home buyers of property within the City limits of Tampa. The loan is in the second position behind primary financing from a mortgage lender and is typically known as a “silent second” because of the 0% rate and $0 monthly payment. The Deferred Payment Loan (DPL) can remain "silent" as long as the property continues to be the owner's primary residence and owner-occupied. The program provides up to $40,000.00 to assist income-eligible first-time homebuyers to achieve the dream of homeownership.
Here are the basic highlights of the City-Wide “Dare to Own the Dream” Homeownership Program:
- Potential buyer must begin process with one of the three approved Housing Counseling agencies and MUST NOT be under contract before receiving a reservation number. The Counseling agency will provide education, complete application with client and collect documentation (See attached list of approved agencies).
- Potential buyer must utilize the services of a Loan Officer and Real Estate Agent (if applicable), who is reflected on the City’s current Approved Lender List and current Approved Realtor List.
- Up to $40,000.00 toward the purchase of the home:
- 0-50% AMI $40,000.00
- 50.01%-80% AMI $30,000.00
- 80.01%-120% AMI $20,000.00
- 120.01%-140% AMI $15,000.00
- Fully forgivable after 10 years, assuming still owner occupied.
- Income calculated based on HOUSEHOLD income, not just the loan applicant.
- Household income must be at or below 140% Area Median Income (AMI).
- Debt/Back-end ratio cannot exceed 50%. No front ratio minimum/maximum. Mid-Credit Score of 600.
- Purchase price up to $350,000.00 (if you qualify for primary financing)
- Minimum of $2,000 investment from the borrower with at least $1,000 from borrower’s own verifiable funds. The additional $1,000 may include POC’s (appraisal, inspections, etc.)
- Loan types are flexible – Includes fixed and fully amortized products: FHA, VA and Conventional Affordable Housing Products allowed; ARM loans are not allowed.
- A full independent Home Inspection by the Buyer & a Pass HQS Inspection by the City are required before closing.
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