The median list price for Tampa-St. Petersburg-Clearwater, Fla. area homes was $171,900 in March 2014, up 10.9% from March of last year, according to the National Housing Trend Report for March 2014 published by Realtor.com.  That’s below the national median of $199,900. Meantime, the market ranks sixth in the number of available listings out of 146 metropolitan regions ranked by Realtor.com. This means relatively low prices and a fair amount of inventory – a promising opportunity for potential buyers.

The properties currently listed for sale on www.realtor.com for the Tampa-St. Petersburg-Clearwater area range in price from the mid-teens for a small one-bedroom, one-bath condo in need of some renovation to $17.5 million for a 23,000+ square foot, gated waterfront home with two pools, tennis court, basketball court, carriage house and boat docks.  Of nearly 9,000 properties listed on www.realtor.com, there are currently 82 single-family homes and condos/townhomes for sale in the $171,900 to $175,000 price range. Here’s what’s available for $175,000 in the Tampa-St. Petersburg-Clearwater market.

Attention First-Time Buyers

The Tampa-St. Petersburg-Clearwater market is the second-best city for first-time homebuyers, according to a new report by Realtor.com listing the top ten metro areas for new purchasers. The only metro area that ranked better was Pittsburgh.The five key factors that make a market ideal for first-time homebuyers:

• Market popularity. First-time buyers often “move up” to a larger house within a few years. Buying in a popular area helps ensure they can make a profit when it’s time to move.
• Prices. Buyers have to be able to afford the mortgage as well as the down payment.
• Inventory. Markets with limited inventory (i.e., not enough homes on the market) often have bidding wars in which first-time buyers can easily be out-bid by investors or buyers who can spend more. Ample inventory reduces the likelihood of these bidding wars.
• Time on market. The median age of inventory is an indicator of demand in a particular market. Markets where homes are on the market for a very short amount of time, typically because of high demand, can also lead to bidding wars.
• Unemployment rates. A lower unemployment rate means first-time buyers are more likely to find and keep jobs and be able to pay their mortgages.

The largest number of real-estate markets on the top ten list were in Florida. In addition to Tampa-St. Petersburg-Clearwater, first-timers were directed to the Orlando and Jacksonville metro areas. The others in the top ten: Philadelphia, and its N.J. suburbs.; Philadelphia and its Pa. suburbs; Fort Worth-Arlington,Texas; Dallas; Raleigh-Durham-Chapel Hill; and Phoenix-Mesa.

What $175,000 Will Buy

There’s a wide selection of homes at the $175,000 price point, including a number of short sales. In the single-family home market, buyers will find one-level, ranch style houses with between two and five bedrooms and from one to four baths. Size varies greatly; $175,000 can get you anything from an upgraded two-bedroom, one-bath bungalow with 864 square feet ($203/sq. ft.) to an older five-bedroom, four-bath house with 3,056 square feet ($57/sq. ft.). Many properties have updated kitchens, including granite countertops, stainless-steel appliances and tile backsplashes, as well as hardwood/tile flooring, en suite baths with dual sinks and separate tub and shower in the owners’ bedrooms, walk-in closets, and mature landscaping. Some properties are part of homeowners’ associations that offer community amenities, such as swimming pools, and a few have private pools and/or spas.

In the condo/townhome market, buyers will find mostly one-bedroom, one-bath or two-bedroom, two-bath units. Properties range in size from a 731-square-foot modern condo ($239/sq.ft.) to a three-bedroom, two-bath, short-sale townhome with 1,848 square feet ($95/sq. ft.). At this price point, buyers can find hardwood/tile flooring, updated kitchens with granite countertops, and community amenities including swimming pools, tennis courts and fitness centers.

Rent or Buy?

Trulia’s Rent vs. Buy Report, released by online real-estate aggregator Trulia.com, shows it is 38% cheaper to buy than rent, on average nationwide. The report compares costs for a seven-year period using five calculations:

1. The average rent and for-sale price for an identical set of properties. For example, the costs of buying a $175,000 home and what it would cost to rent the same house;
2. The initial total monthly costs of owning (assuming 20% down and a 30-year fixed-rate mortgage at 3.5% interest, as well as annual maintenance, insurance, utility and property-tax expenses) and renting (monthly rent plus renter’s insurance);
3. The future total monthly costs of owning and renting;
4. One-time costs and proceeds (for owning, this includes closing costs and capital-gains tax of 15% for gains above the $500,000 annual exclusion; for renting, this includes one month’s security deposit).
5. The net present value to account for opportunity cost of money (this compares cash flows over time).

How long you plan on living in an area, the mortgage rate you secure and your tax bracket are all key factors in deciding whether it makes better financial sense to rent or buy. For example, if your target home price is $180,000 and you get a 4.00%, 30-year fixed-rate loan; are in the 28% tax bracket and plan on living in the home for seven years, it might be 44% cheaper to buy than rent in Tampa-St. Petersburg, according to the Trulia report – assuming it would cost $1,450/month to rent a similar property. If you plan to stay in place for only two years, however, renting or buying would cost about the same to rent or buy, all other factors remaining unchanged. If you plan to remain in the same area for three to five years, it is typically cheaper to buy than rent.

The Bottom Line

Buyers in the Tampa-St. Petersburg-Clearwater real estate market can find a variety of properties at the $175,000 price point. Many of the properties are short sales, which means buyers could get more house for their money. According to a recent study for realtor.com, the Tampa-St. Peterburg-Clearwater market has been named the second-best market for first-time home buyers, because of the area’s market popularity, affordable list prices, supply of inventory, median age of inventory and steady employment.