It seems like everywhere you look there is an offer to buy your home. Are iBuyer services the new wave in real estate? Tampa is a fast-growing market when it comes to home sales made through online platforms. A recent analysis by Redfin found that in the third quarter, 1.1 percent of homes purchased in the Tampa market were made by iBuyers: real estate tech companies that buy and sell homes through online platforms. That put the Big Guava as the No. 17 market in the country for iBuyers.

Another Florida market landed at No. 9 — Jacksonville, where iBuyers accounted for 3 percent of home purchases, while Orlando landed at No. 12 with iBuyers accounting for 2 percentage of home sales. Phoenix — the birthplace of the iBuyer movement — and Atlanta trailed Raleigh, with 5.1 percent and 4.4 percent, respectively, while Houston, with 3.9 percent, took the No. 5 spot. Across the 18 markets in the study as a whole, the iBuyer market share was 3.1 percent.

“iBuyers are concentrating their efforts in southern markets where both home sales and prices are poised for strong growth,” said Redfin chief economist, Daryl Fairweather. “We think that iBuyers are likely to accelerate home sales in these markets. Homeowners who may have been reluctant to sell because they didn’t want to deal with the hassle may be persuaded by the convenience of an iBuyer sale.” When an iBuyer buys a home, the company often does repairs and renovations in order to market the property at a higher price. The study found the most iBuyer activity is in markets where typical home prices were below the national median — around $312,200 in October.

In the Tampa market, the median price of a home sold by iBuyers was $207,000, compared to the metro wide sales price of $236,393. Since this time last year, median days-on-market for iBuyers homes have plummeted in Tampa, dropping from 78 to 30 days in Q3 2019. Similarly, Orlando saw its median days-on-market drop from 64 to 22. Q3 2018 data was not available for Jacksonville.

Craig’s Take:

First let me explain what the term iBuyer means. An iBuyer stands for “Instant Buyer’. iBuyers are companies that purchase homes via cash, typically directly from the owner. The seller doesn’t have to pay an agent, list the home, stage it, market it, or even show it to potential buyers. Instead, they tell the iBuyer about the property—things like its age, condition, and zip code—and using data and mathematical algorithms, the iBuyer predicts the home’s future value. The iBuyer will then present the seller with a cash offer, which they can accept or decline. If they accept, they get their cash within a few days (or weeks, depending on the closing date they choose), and they’re free to purchase another property without the future purchase being encumbered by the sale of the current home. This makes them a much stronger buyer in today’s low inventory market where many sellers aren’t keen on accepting an offer that is contingent upon the sale of a home. There are other benefits related to timing.  Being able to choose your closing date so that you don’t have to go through the hassle of a double move or have additional expenses like temporary housing while you are waiting for your home to close is often enticing.  You also don’t have to experience a seller’s greatest fears-- being caught paying two mortgages when the sale of your current home falls through before closing. I do want to point out that many of those challenges mentioned can be mitigated by a top agent who has the experience to create a plan specific to the seller’s situation. While there are obvious positives, it is important to note there are as many negatives with a seller going the route of selling to an iBuyer.

iBuyer offers typically fall short of market potential.

Historical data suggest iBuyer companies are typically offering 82%-92% of fair-market-value. There are many things that determine what these companies are offering for these properties. Some of the variables are supply of inventory for similar homes, days-to-contract for similar homes in the area, number of recent comparable sales, condition of property, age of major components, etc. In addition, offers are generally lower than market value. Fees charged by these companies are typically more than fees charged going the more traditional route. The top iBuyer companies are charging between 7.5%-12% which further reduces the seller’s net.  Another important thing to understand is that just because the iBuyer offer is cash, it isn’t free of contingencies. The iBuyer offer does have inspection contingency and many times the iBuyer company tries to further reduce the offer price by providing a long list of repairs they feel they would need to make to the sell the home for their target price. In most cases, iBuyers take the properties they purchase, fix them up, and list them on the open market or sell them to investors at a profit.

I do believe 2020 is the year of the iBuyer. I expect to see more iBuyer sales in the Tampa Bay area than ever before. The top iBuyer market in the country is Phoenix. Last year iBuyer home sales made up an astounding 30% of all sales in Phoenix. There are many reasons for the public to be concerned by this. Number one when one Buying group controls 30% of the market sales it is realistic to expect that group to begin to have major influence on the market therefore, influencing pricing in either direction. If you or anyone you know is having any thoughts about going the iBuyer route, I strongly encourage speaking with an agent like myself who can give unbiased guidance on which options are best for them. I work with all the top iBuyer companies and can assist.

Stay tune for another article where we do real case studies of homes here in the Tampa Bay area that requested offers from the top iBuyer companies and find out which ones offered the most money and how that compared to what the seller got going the traditional route.

A majority of Pinellas County residents come from out of state, while Hillsborough County residents almost evenly come from in state and out of state, according to the most recent census data.

Tampa Bay Business Journal looked at census data from 2013 to 2017, the latest data available, to see where Hillsborough and Pinellas counties' residents originated.

A lot of Hillsborough County residents are moving from in state, especially from surrounding counties. Polk, Pinellas and Pasco counties all had over 3,800 residents move to Hillsborough between 2013 and 2017. Besides Tampa Bay counties, the next Florida county to have the most residents move to Hillsborough was Miami-Dade with 2,445 over the four-year span. 

Outside the state, Cook County, home to Chicago and San Diego County, home to San Diego, had the most residents move to Hillsborough County with 1,032 and 708, respectively. The county also received residents from 12 municipalities in Puerto Rico, including San Juan Municipality.   

Overall between 2013 and 2017, Hillsborough County had a close to equal number of residents move from another state and from within the state; 38,359 residents moved from a different state while 36,411 residents move from a different county in the state. The county also had 14,393 residents come from another country. 

Similarly, most of the residents moving to Pinellas County came from surrounding counties, though Palm Beach County had 1,275 residents — the third most — move to Pinellas. 

Outside of the Sunshine State, Salt Lake County, home to Salt Lake City, and Queens County New York had the most residents move to Pinellas with 426 and 380, respectively. Cook County, home to Chicago, and Allegheny County, Pittsburgh were also among the counties with the most residents moving to Pinellas County. 

Unlike Hillsborough County, Pinellas did not see as many residents move from Puerto Rico. Only two municipalities in Puerto Rico had over 100 residents move to Pinellas. 

Between 2013 and 2017, a majority of Pinellas County residents moved from a different state with 30,860 residents, compared to 20,587 who moved from a different county in the state. The county also had 6,042 residents move from another country.

Craig’s Take:

It is no surprise, people who are moving to Hillsborough and Pinellas Counties are moving from high tax and high cost of living cities.

In Hillsborough County we saw 74,770 move from within the US as opposed to only 14,393 who moved from another country. The point I want to make clear is that there’s 500% more people moving to Hillsborough from within the country than from another country. So, many times people get focused on people moving to the area from another country which pales in comparison to people moving to Hillsborough from within our country. If you breakdown the math between 2013 and 2017 we saw nearly 343 people moving every week to Hillsborough County.

In Pinellas County we saw 51,447 move from within the US as opposed to only 6,042 who moved from another country. Again, the point I want to make clear is that there are nearly 900% more people moving to Pinellas from within our country than from another. So, many times people get focused on people moving to the area from out of the country which pales in comparison to people moving within the country. If you breakdown the math between 2013 and 2017 we saw 221 people moving every week to Pinellas County. That is pretty astounding if you think about that. This is the reason new residential construction cannot keep up with demand. It is also the reason our roadway infrastructure can’t keep up with growth.

We so often take things like no state income tax for granted. Understanding where people are moving from allows me to understand where to market my seller’s homes.

It will be at least two years before they can move in, but potential buyers already can "see'' the planned Altura Bayshore condo tower thanks to the magic of virtual reality. Altura is among a wave of new condo towers planned or underway along Bayshore, which had gone well over a decade without any new high-rise construction. The projects include Virage, Aquatica, The Sanctuary and Hyde Park House. Additionally, Miami-based Related Group is considering two condo towers with about 100 units each plus townhomes.

The Ronto Group, Naples-based developer of the 22-story tower, opened a sales center at the 2910 W. Barcelona Ave. site just off Bayshore Boulevard. Agents will give private presentations about the project, including a virtual tour soaring past the rooftop pool and cabanas, the tennis courts and through the buyer’s condo of choice overlooking Hillsborough Bay.

The construction start date will depend on the pace of reservations. The 73 units, each with a private elevator, will range from 2,176 square feet to 3,575 square feet and cost approximately $1 million to $2.9 million.

Click here to take a virtual tour of Altura condo tower planned for Tampa’s Bayshore Boulevard.

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A waterfront mansion on Davis Islands has sold for $7.5 million after less than two months on the market. The home at 556 Riviera Drive, built in 2016, sold on Dec. 4, according to a Hillsborough County deed filed Friday. It appears to have been a cash transaction, as a mortgage has not been filed. The Riviera Drive home went up for sale on Oct. 30, offered at $8.5 million. It was rumored that prospective buyers were required to sign a non-disclosure agreement before touring the home.

The sales price breaks down to $930 per square foot, which represents the upper echelon of luxury real estate in Tampa Bay. The developer of the home, a team of local investors, sold it for its exact list price of $5.995 million in February 2016.

The property has more than 100 feet of open bay frontage, and a two-story cabana — offering elevated views of Hillsborough Bay — which connects both the main living area and the master bedroom. There are seven en suite bedrooms, one of which has been converted to a full gym. Other features include a 1,550-bottle, temperature-controlled wine room, eight and a half bathrooms and an elevator. The sellers also spent $750,000 on upgrades — adding a dock, converting a bedroom to a home gym, adding a Savant Intelligent Home and Entertainment System and an elevator, and upgrading the landscaping and fountain.

The buyer is a corporate entity registered to a Bayshore law firm. The seller was a joint revocable living trust in care of Dennis A. Hase. The sale is the latest in a series of banner transactions for Davis Islands in 2019. Over the summer, Tampa Bay Buccaneers co-owner Darcie Glazer Kassewitz and her family paid a combined $16 million for neighboring properties on the Davis Islands waterfront.

Craig’s Take:

This sale is further evidence of the appetite for Davis Island luxury real estate has no signs of being satisfied anytime soon. For a home in this price range to sell in only 14 days is highly unusual unless there is something unique about the estate that makes it rare. In this case, a 100 ft of unobstructed Waterview’s, newer construction, and the location of Davis Island all make the estate a rare jewel in high-demand. Little is known about the seller other than the name and the buyer’s identity is unknown as the property was purchased in an LLC. With the managing member a local law firm.