Mayfair in Tampa Palms

Good News about New Tampa’s real estate market!!

Jul 28, 2006

Hello All:

Here is a good news story about New Tampa?’s real estate market!!
From: Lyn Acer

Baby Boomers' Children Fuel New Tampa Buyer's Market

By LAURA CONE lcone@mediageneral.com

Published: Jul 25, 2006

Five years ago, New Tampa was known as an affluent area with immaculate landscaping and top-rated schools ?– an idyllic place for buying a home to raise a family.

For New Tampa residents in their 20s ?– mostly apartment-dwellers along Bruce B. Downs Boulevard ?– the peaceful community more closely resembled a ghost town after dark.

They had to drive downtown in search of nightlife.

While night-club and late-night entertainment opportunities for singles and young couples may still be lacking, a growing number of young people are purchasing homes in the New Tampa area.

Experts such as Wendy Harper, a public-affairs associate with the National Association of Realtors in Washington, D.C., says the children of baby boomers are helping to fuel the movement toward homeownership in the country.

She said the association?’s 2004 survey found 5 percent of homebuyers in 2004 were younger than 25 years old, compared to 6 percent in 2005.

In 1995, people 25 and younger bought 172,000 homes nationally. In 2005, that number jumped to 501,000, according to Harper.

One reason more young people are buying homes is simply because they can. Baby-boomer children have more financing options at their disposal, such as 40-year mortgages instead of traditional 30-year mortgages.

Instead of purchasing a home with a spouse, many people in their 20s purchase condominiums with friends or find roommates to help pay the mortgage.

Condo living with roommates, not spouses In New Tampa, more young people may be deciding to buy instead of lease due to the proliferation of condo conversions.

More than a dozen apartment complexes have converted to condominiums in the past 13 months in the New Tampa area.

Jason Litt, 25, of Lutz, plans to find a roommate to help share housing costs after he purchases a condominium this month in a former apartment community, Oxford Place at Tampa Palms, where he lived for one year.

?“I?’ve been throwing away rent for the last couple years,?” said Litt, who works as a music teacher at Tampa Palms Elementary School.

?“My brother Adam said it?’s a buyer?’s market. I thought it would be a good idea to throw down my money and make a good investment. I wanted to move a little closer to where I work. Now it?’s a three-minute drive.?”

Litt said he looked at several condominiums in the New Tampa area, but kept being drawn back to Oxford Place, where he had lived from 2004 to 2005.

?“It?’s like a second home to me,?” he said. ?“I got a great deal on it.?”

Litt said he decided to purchase a condo instead of a single-family home because of the incentives such as free closing costs.

Also, he could buy a condo for less than $200,000 while most single family homes in New Tampa start at $250,000.

?“I wanted to get a home, but then I looked at my options,?” he said. ?“I?’m a teacher. I?’m 25. I have a long way to go before I get married.?”

Paul Bishop, the manager of real-estate research for the National Association of Realtors, said, for many young people, purchasing a condo is the best way to get on the housing ladder and build equity.

Often, Bishop said, owning a condo ?– as opposed to a home in the suburbs ?– fits more into a single person?’s or young couple?’s lifestyle.

Bishop said he looked at U.S. Census Bureau data which showed the children of baby boomers in their prime homebuying years, ages 25 to 39, are more likely to purchase a home than their parents were when they were in that same age bracket.

?“The homeownership rate of baby boomers when they were younger was about 52 percent and, for the same age group today, homeownership rate is about 56 percent,?” Bishop said. ?“Younger people today are more active in the housing market than baby boomers were 20 years ago.?”

Bishop said young adults, often called members of Generation Y, recognize home ownership as a solid financial investment.

?“To a certain degree, the children of baby boomers are learning from their parents?’ example,?” Bishop said. ?“We have seen home prices increase and values of homes rise, so it?’s a good financial investment. They are seeing the benefits.?”

Ryan Dougherty, the marketing manager for Bayfair Properties in Tampa, said young people may purchase a town house in Grand Hampton?’s Club Manor starting at $250,000, while single-family homes in the same community start in the low $300,000.

?“We have definitely seen a number of our buyers in the age range of 25 to 30,?” said Dougherty, adding the first homebuyers in Club Manor moved into their town houses in April. ?“They are young professionals just starting out in a career. They don?’t want the maintenance associated with living in a single-family home or owning a home such as the lawn and pool, painting and roofing.?”

Dougherty said the town homes in New Tampa appeal to young entrepreneurs and consultants who work at home and want to be close to an airport.

?“It?’s a little bit of both ?– they still want the luxury and convenience, as well as the affordability factor, and a town home is the perfect choice,?” he said.

Kyle Santi, 28, said he was able to purchase a 2,300-square-foot town home in Club Manor with his younger brother Ryan, 25.

?“I was living in an apartment in South Tampa and my brother was living in an apartment in North Tampa,?” Kyle Santi said. ?“We were throwing money away on rent. We saw a good opportunity to invest in real estate.?”

Santi said he has noticed many of his friends ?– mostly single people and young couples without children ?– moving to the New Tampa area.

?“I think New Tampa is changing to be a mixture of both people with families who want to settle down and also married and younger people,?” he said. ?“I think a lot of the university people are starting to move a little to north Tampa. We see more students up that way.?”

They plan to keep their three-bedroom town home for at least two years before selling it. Santi said they went with a three-year, interest-only payment option, which came with their fixed 30-year mortgage.

Ron Walters, a Realtor with Keller Williams Realty in New Tampa, said one of the reasons condo conversion was so popular in New Tampa was the fact people could not find homes for less than $250,000.

In the past year, however, the inventory of property in New Tampa has more than tripled, according to Walters.

?“Now, since the market has become more of a buyer?’s market, you are seeing single-family homes come down to a level that is closer to what condo conversions are selling for,?” Walters said.

New generation of financing

Walters said Gen Y-ers also have more financing options available to them today, which makes it easier for them to become homeowners.

To continue to compete for young buyers, more condo communities offer incentives. Lenders also often look the other way when it comes to less-than-perfect credit and turn young buyers on to first-time homebuying programs, Walters said.

?“We are still seeing the best vehicle or first step for buyers under 25 is into one of the condo conversions,?” Walters said. ?“For the younger market, we are finding it?’s still difficult for them to make the jump from renting to homeownership. So we are seeing more and more lenders coming up with programs to help with no down payment, helping with people?’s credit problems, even now stretching out home mortgages to 40 years. You can get a 40-year mortgage now, which naturally lowers the monthly payment.?”

Walters said young buyers are no longer as quick to choose the adjustable-rate mortgages and interest-only loans.

?“First-time buyers who are 25 or younger were using those interest-only loans and the problem is, first of all, you are not paying off any of the principal of the loan,?” he said. ?“The bigger problem is they are typically variable rates that are pegged to the prime interest rate. That has caused a problem for young buyers because rates have stair-stepped up in the last 12 to 18 months. They are pegged to the Fed?’s prime rate, which has increased from 1 to more than 5.?”

Another strategy employed by Gen Y-ers to get into the housing market is to rent with an option to buy.

Walters, who has lived in New Tampa for 10 years, said rent-to-own plans give renters additional time to save up the money needed for closing costs.

?“It also gives them security they will not be forced out of their apartments,?” he said. Walters said he thinks the trend of more young people buying homes will not change.

He said people in their 20s will build equity in their dwellings ?– whether they are condos or single-family homes ?– which will help keep the real-estate market strong for the next generation of buyers.