Westchase Real Estate, 2012: Up, Down or Sideways?
In recent months, economic signs have sparked greater hope. Has that translated to positive economic news for Westchase’s housing values?
In the last ten years, metaphors for Westchase home prices have included an exuberant bubble, a hissing balloon and a crab skittering along the bottom.
By now the old story of the real estate bubble may cause eyes to roll. Perhaps, like Southerners did after the Civil War’s end, we should agree to politely refer to the carnage that sparked the Great Recession as “That Recent Unpleasantness.”
Nevertheless, the real estate run up between 2003 and 2007 saw Westchase homes acquire staggering price tags. A typical 1,800 square foot home in The Brides, which would have sold for $198,000 in 2003, rocketed to $341,000 just three years later, an increase of 73 percent. Homes in The Greens jumped 49 percent while houses in Harbor Links/The Estates rocketed upward 53 percent.
Many young families found themselves priced out of the Westchase market.
Then the champagne lost its fizz.
Between 2006 and 2009, homes in The Fords lost a third of their value, dropping from a high of $182 per square foot in 2006 to $128. That typical home in The Bridges collapsed nearly 40 percent, plummeting to $212,000 in 2009. The Vineyards and West Park Village weren’t far behind, with decreases of 38 percent.
With four years of hindsight we now know that 2009 represented the bottom. Subsequent years, however, sent mixed messages about how long Westchase homes would sit there. The year 2010 brought the first hopeful uptick in average square foot prices. That year, Westchase managed to buck the Tampa Bay trend of continued price declines (four percent that year) and saw prices rise 2.6 percent to $130.70 per square foot.
In 2011, however, Westchase real estate values slid back to 2009 levels.
Which brings us to 2012.
The beginning of the year brought a notable change of tone among Westchase Realtors. As a group, they reported a shrinking supply of homes, beginning in late 2011. They even predicted the shortage would soon place upward pressure on home prices. The latter eight months of 2012 bore their suspicions out: Westchase home prices were on the rise again.
The result? With 193 total sales, Westchase square foot prices rose 6.4 percent in 2012, to $135.86 per square foot. From the bottom of the decline in 2009, Westchase has added a total of 6.7 percent to their prices.
What are the drivers of the Westchase market? A look at the community’s average square foot prices, home inventories and the total home sales over time offers a prime lesson in the role that supply and demand play in setting prices. After two years of 169 homes selling annually in 2009 and 2010, the number of Westchase homes sold in 2011 rose over 25 percent as banks released distressed properties onto the market. That year Westchase gave up the gains of 2010. Last year’s total number of sales – 193 – is just above the average number (187) seen over the last six years. The decline in sales doesn’t represent declining buyer interest, however. It’s a sign that the Westchase home inventory has fallen so low, it’s putting upward pressure on prices again.
A number of Realtors WOW interviewed about 2012 home sales in Westchase reported the same thing.
“Home values stabilized or increased in every village in 2012,” announced Nancy Wood of Coldwell Banker.
“Wow! The market is hot,” added Wendy Ross of Florida Executive Realty. “The Westchase inventory of homes for sale hasn’t been this low in years.”
The Realtors agreed the 2012 increase was driven by three factors. Jason and Dyan Pithers of Coldwell Banker succinctly stated, “Favorable interest rates, qualified buyers and a lack of inventory has created the ascent of a seller’s market again in Westchase.”
Local Realtors report that they are now encountering something that had evaporated during the real estate decline: Westchase sellers receiving their asking prices. Added Doug Wood of Coldwell Banker, “Homes that are in good condition and that are well marketed and priced properly are seeing multiple offers, sometimes above asking price.”
“Anything under $325,000 will fly off the shelf,” observed Anne Hart of Century 21 Bay West.
On a Westchase village-by-village basis, gains were seen across the board in 2012 – with one exception.
Seeing the greatest increases in 2011 were homes in Harbor Links/The Estates, which saw its square foot prices jump 13 percent to $170.73. The neighborhood seeing the second highest price increase was The Vineyards, whose homes rose 11.5 percent to $128.51 per square foot. Placing third and fourth were West Park’s single family homes, which saw their prices increase eight percent to $143.06 per square foot, and Radcliffe homes, which saw a 7.4 percent increase to $146.34 per square foot.
In comparison, the Standard and Poor’s/Case Shiller Index of home prices across Tampa Bay noted a seven percent increase from November 2011 to November 2012.
In general, Realtors interviewed by WOW spoke positively about Westchase housing values compared to other Tampa Bay communities. “They’re definitely stronger compared to Cheval and Tampa Palms,” observed Hart.
Ross agreed, arguing that Westchase’s location and the availability of new construction on its environs gave it an edge over Tampa Palms.
A handful of Westchase neighborhoods largely matched the overall percentage increase seen across Tampa Bay. Slightly underperforming the seven percent average were homes along Countryway Boulevard (excluding The Shires and Harbor Link/The Estates), which increased 6.5 percent to $130.94 per square foot, and homes in The Bridges, which rose six percent to $131.12 per square foot.
The average Westchase home sold for $334,000 in 2012, markedly higher than the Tampa Bay average home price of $145,000 (November 2012). Only four of the 193 Westchase homes purchased in 2012 sold for less than that Tampa Bay average – and all were condominiums or townhomes in West Park Village. The least expensive home sold within the Westchase Community Association (WCA) in 2012 was a 1,452 square-foot unit on Bradwell Place in West Park, which sold for $126,705 in June. The priciest home was a 4,428 square-foot home on Marblehead Drive in Harbor Links/The Estates, which went for $830,000.
Just outside the WCA, however, two homes sold for even more. Tree Tops, which actually isn’t part of the Westchase HOA, saw a 4,480 square foot home go for $860,000 in January 2012 and a 4,920 square-foot home go for a cool $1.3 million in July. Tree Tops’ real estate prices also appear to have finally bottomed out in 2011 at $187.80 per square foot. That community saw a 4.4 percent rise in home values in 2012 to $196.08 per square foot.
Which neighborhood proved the exception to the old adage that a rising tide lifts all boats? It was The Shires. While homes in The Shires did see an increase in square foot prices in 2012, it was a mere two cents per square foot, leaving prices largely flat in that neighborhood. Prices of homes in The Shires continue to defy overall Westchase trends. It offers a helpful reminder that the story of the Westchase real estate really is two stories in one. On the one hand, Westchase’s less expensive homes, like those in The Bridges, The Fords and homes along Countryway Boulevard (outside of The Shires and Harbor Links/The Estates) all reached their bottoms in 2009. Even West Park Villages’ single family homes followed the same path.
Westchase’s larger, more expensive homes in The Greens, Harbor Links/The Estates and Radcliffe followed a different trajectory, reaching their bottoms two years later in 2011. After all, the number of buyers who can afford less expensive homes is far larger than those who can afford pricier ones.
Finally, last year, all Westchase neighborhoods but The Shires experienced a rebound. Is there any explanation for the aberration?
The answer may lie in the distribution of short sales and the sales of distressed properties. Of the 40 short sales and foreclosures in Westchase in 2012, six of them – a full 15 percent of all distressed sales – occurred in The Shires, despite that neighborhood holding only 6.8 percent of Westchase’s homes. The Shires had twice the number of distressed sales as The Bridges, which has nearly double the homes.
Given the small overall number of sales, the proportionally high number of distressed sales in The Shires is depressing the overall average sales price per square foot. There is some consolation, however, for Shires homeowners with equity in their homes. Increasingly, buyers are viewing the real estate market as consisting of two distinct markets: distressed sales and non-distressed sales. Cautions Jason and Dyan Pithers, “Regular sales should not be compared to distressed sales. The level of distress is so low in Westchase that you don’t need to look at distressed sales to establish value.”
WOW’s data looks at neighborhood sales data in aggregate. Thus, if Westchase real estate values continue their climb, The Shires will likely see an above average jump in WOW real estate data in future years.
Overall, the news regarding the number of distressed sales in Westchase is positive. All the local Realtors WOW interviewed stated that the percentage of distressed sales had decreased. In fact, short sales and foreclosures represented one in five Westchase sales in 2012, down from more than one in four homes in 2011. Significantly, the average square foot price fetched by distressed homes also rose to $114.40 from $109.75 in 2011.
So did The Shires have the most distressed sales of any neighborhood?
No. Winning that distinction was West Park Village. Chock-a-block with townhomes and condominiums that saw a heady investor rush during the bubble years, this neighborhood has borne the brunt of foreclosure activity. It’s why, when looking at West Park, WOW looks at that neighborhood’s single family homes separately.
Yet the neighborhood with the highest percentage of its homes involved in foreclosure and distressed sales in 2012 was actually Village Green. While only 90 homes exist in this neo-traditional Greens village, alone it accounted for four foreclosures or short sales – 10 percent of Westchase’s total distressed sales. At 4.4 percent of its overall homes, Village Green’s rate was twice that of The Shires and West Park Village. Because WOW includes that neighborhood sales data in its calculations for The Greens at large, Village Green’s performance in 2012 likely depressed 2012 square foot sales prices for The Greens as a whole. Anecdotal evidence of early 2013 sales in Village Green, however, suggest that prices there are now also on the rise.
After ten years of ups and downs, where does that leave you? In short, if you bought a home in either The Bridges or Harbor Links/The Estates in 2003 and simply held onto it, conducting necessary maintenance and upkeep over the last ten years, you could sell it for 19 percent more than you paid ten years ago. Assuming you haven’t refinanced your mortgage to pull out equity, the gain, combined with your increase in equity earned by paying your mortgage down, would leave you in a solid place should you need to sell.
As a strict investment, however, Westchase real estate has not been a winner over the last decade. In contrast, the 19 percent return over ten years would have underperformed the overall, cumulative inflation rate of 26.36 percent. Even with the stunning stock market losses of 2008, which saw the S&P 500 lose 37 percent of its value in just 12 months, you could have doubled your money in the stock market during that same timeframe. Unless the rent you charged to tenants significantly exceeded the mortgage payment on the Westchase property you owned, you would have been better off in stocks.
But you have to live somewhere. And paying down a Westchase home mortgage, which produced at least some small gain in equity over the decade, was a far better deal than renting over that same period.
Most reassuring are the predictions Realtors are making for 2013. While one of the five Realtors still expressed concern about the impact job insecurity was having on the Tampa Bay real estate market, the others were a bit more bullish. Jason and Dyan Pithers predicted “a strong and steady stabilization with a good chance of modest increases.”
Hart was even more upbeat. “Prices will go up as supply still languishes and interest rates remain low.”
“I believe we will see steady to increasing values,” agreed Ross. Citing low mortgage rates, she added, “With the continued low inventory, I believe 2013 will prove to be positive for sellers.”
Dollars and cents aside, step onto your porch and look around. Pause for a happy visit to Westchase’s parks and commercial areas. Proudly check out Westchase’s impressive schools, filled with Westchase parents who enthusiastically volunteer thousands of hours yearly. Even take a simple drive down Linebaugh Avenue, rivaled only by Bayshore Boulevard as the prettiest road in all of Hillsborough County.
Despite all the ups and downs, would you really want to call anywhere else home?
By Chris Barrett, Publisher
WOW thanks Doug and Nancy Wood of Coldwell Banker for their assistance in compiling the Westchase real estate data used in this article. We also thank the businesses that have brought you the Real Estate Special. You can view their listings by clicking here: http://www.westchasewow.com/news/entry/wows_real_estate_special_2013