Downtown St. Pete. Picture taken from the Cross Bay Ferry!
What’s included in every real estate update?
Interesting Real Estate Stats
Recommended Articles Of The Month And Why
Real Estate Local News
Interesting Real Estate Stat For This Edition:
Every month we’ll pull an interesting stat for you directly from our MLS for Pinellas County.
St. Pete & National Real Estate Market
While the real estate market changes on the national level, the St. Pete area continues to have a mind of it’s own. Many people are moving here and real estate is still affordable relative to the national average. The seller’s market is still strong here but that’s less about market conditions and more about the fact that St. Pete is becoming the hottest city to live in Florida.
Land here is limited and values will continue to appreciate over the long term regardless of market conditions. With that said, national market conditions are providing more of an equilibrium between the buyers and sellers compared to the past few years where home sellers had the majority of the leverage.
Rental Market & Income Properties
Since our rental market is strong and continues to grow stronger, income properties are still a great bet down here. I always advocate investing in a home with a legal rental unit. I currently have a home under contract with a studio apartment in the back that’s already rented and will be covering more than half of my client’s mortgage payment.
I found out a great piece of information lately – Lenders can actually factor in potential rental income on these properties to increase your buying power. For example – Hypothetically if you qualify for a 300k mortgage, you may also be able to qualify for a 400k mortgage for a home with a rental unit. I previously thought that this was limited to homes where the apartment was already occupied and paying rent however my lender told me that the appraiser can actually put a value on potential rental income while the unit is still vacant.
These homes can be financed as an owner occupant with as little as 5% down with a conventional loan or 3.5% with FHA. Financing options differ when it comes to duplex, triplex and quadplexes so knowing a knowledgeable mortgage professional is the best way to navigate these situations. Feel free to reach out to Justin with Van Dyk Mortgage if you have any questions about financing, he’s been extremely helpful to me.
Local Developments
We have an amazing amount of active developments in and around St. Pete. Driving around you’ll see there are dozens of projects in the works. One of the most anticipated projects is the new St. Pete Pier which now has a delayed completion date of early 2020. Ryan wrote more in depth about this project in our last April 2019 Monthly Real Estate Update.
Another equally as expensive but not as well known project is a 75 million dollar mixed use development in the Skyway Marina District. This project aims to provide affordable housing and entertainment that appeals to the millennial generation in a district that is still an up and coming area.
This mixed use development is a combination of a few things – apartments, two free standing restaurants, mini-storage and also a ‘lazy river’ that will be available to the public. The Skyway Marina District is currently in a transformation period – What was once a dilapidated area with vacant shops and a higher than average crime rate is now a district that’s ripe for revitalization.
Since this is the first impression of Pinellas County as you enter from the Skyway Bridge, the city has provided grants for local businesses to start up here and develop the area. I live in this area and bought my condo realizing the potential for appreciation in this area that’s only 10 minutes to Downtown and 10 minutes to the beach.
St. Pete vs National Real Estate Market Visualized
Take a look at these graphs from Zillow that show average sales price nationally as well as locally in St. Pete. National average is currently $227,000, projected to be between 234k-236k by 2020. In St. Pete, local average is $218,500 and it’s projected to increase to 224-226k. We’re about $10,000 below the national average currently, however I don’t think that will last long. This area is growing so rapidly that it’s just a matter of time until our area catches up and surpasses appreciation in relation to the national average.
Also worth taking a look at are these market indicator stats from Zillow. It describes the National Market conditions leaning hard towards a hot seller’s market while in St. Pete it shows we’re closer to neutral. It also mentions that St. Pete has a much higher average price per square foot on average at $211 compared to Tampa right across the bay which is sitting at an average of $144. We all know St. Pete is the better city so it only makes sense!
Why do you think we’re seeing a cool down in the market in the St. Pete area? I personally think that we’re seeing the disparity in expected sales price by listing agents and the actual sales price in which potential home buyers are willing to pay. Home buyers just aren’t ready to pay the types of prices we’ve seen in the past few years when the market was red hot and that is showing up in the form of longer days on market.
In Conclusion
The St. Pete area is appreciating and the market has cooled down. We are coming across a lot more people this year who are comfortable with the idea of buying now that we are seeing more of an equilibrium between the buyer and seller market.
The rental market is strong and will continue to strengthen as more and more people move to the area. The rapid expansion of our city and affordable cost of living relative to the national average is continuing to make it an attractive place to live for everyone from young professionals to retirees.
Are you ready to get your search started? Contact us here or give me call at 727-307-1111 if you’d like to talk about getting set up on a real estate search in the St. Pete / Pinellas County area.
Sincerely,
Chris Formico
Recommended Articles Of The Month:
For this update, we’ll highlight some must-reads we’ve written:
Top 8 Reasons To Move To The Jungle Prada Neighborhood – Ryan recently took the Jungle Prada Tour and learned some great things about this neighborhood!
Top 8 Reasons To Move To Gulfport, Florida – St. Pete can’t always get all the love. Gulfport is a charming little waterfront town that deserves some recognition too! We also made an awesome video of Gulfport that we included in this article!
Real Estate News:
Here are some news stories you may enjoy!
400 Central– Soon to be the tallest building in St. Pete and Pinellas County. A project that will continue to help put St. Pete on the map.
New Crepe Shop Coming To The St. Pete Edge District – Baum Avenue Market is the new hot spot in St. Pete. An indoor food court featuring a coffeeshop, juice bar, bakery and other food options will now have a French inspired crepe shop.
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