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USF professor charts local house prices

Tampa, FL (December 12, 2012) — USF Professor Greg Smersh knows the ins and outs of Florida's complex and high-profile real estate market.

In his research, he has uncovered ways that real estate affects the lives – and checkbooks – of Florida residents. In a recent study, for instance, Smersh found that inland homeowners have higher insurance premiums than in other states, partially because they are subsidizing the premiums of homeowners who live on the coast. Those who live on the coast still pay high premiums, but not proportionate to the amount of risk from hurricanes.

More recently, the assistant professor of real estate began looking at local house prices for a study on price behavior in the Tampa area. Along the way, he charted the numbers to create a local house price index, which chronicles the median price of single-family detached housing in Hillsborough County from 1980 to 2012.

graph showing local house price index

The trend the graph shows is dramatic. From 2000 to 2007, median home prices more than doubled from around $120,000 to almost $250,000 – followed by a nearly 40 percent drop from 2007 to 2010.

But now, the index shows, home prices are rising at a stable rate again -- back to the historical trend of annual appreciation at about 3.5 percent. That's good news for homeowners who are buying now, Smersh said, but not-so-great news for those who bought at the top of the market. According to Smersh, it could be quite a few more years before houses that sold at the peak regain their value.

"In 2012, the housing market will have strong positive appreciation, and we've probably seen the bottom," he said, but added, "I certainly don't expect it to take off again."

Smersh said given the right opportunity, it could be a good time to buy. The Tampa area had some of the highest levels of delinquent mortgages in the nation, so those opportunities are still possible to find.

"There are still some deals to be had, such as short sales and foreclosures, but they are going fast," he said.

Smersh said it is gratifying to do research in a field that so many people want to know about because of its effect on the economy and their daily lives. The same real estate trends affect the entire population of homeowners, whether someone lives in a two-bedroom bungalow or a six-bedroom mansion.

"Like they say, 'a rising tide floats all ships'," he noted. "You may have a bigger boat, but you're going to go up and down with the tide."