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Tampa Bay Real Estate vs. National Trends

by Doug & Gwen Campbell at Sun Bay Associates

"Home prices went up in major markets in the US in May for the second consecutive month."  That is the lead sentence in press releases and it deals with the national real estate picture.  The Tampa Bay real estate market looks a little different.  The mean price of Tampa Bay real estate in May was down 6.6% compared to April. 

The national home prices slid 4.5% in May from the previous May.  However, in the Tampa Bay real estate market, the mean home prices went down 1.6%  when comparing May 2011 to May 2010.  The real shocker is that the median price in May 2011 was down 15.7% from May of 2010.  Taking a look at the reason for the huge difference between the mean and the median, more than 60% of Tampa Bay real estate transactions in 2011 have been cash.  The median price of homes sold indicates that there are a lot of lower priced houses selling to cash buyers, mostly cash rich investors.  At the same time, the Tampa Bay real estate statistics tell us that there are a few higher priced properties selling in the upscale market, which had been moribund for the past year.

There are indicators in a few micro-markets in the Tampa Bay area that small areas have already hit bottom and are in a recovery mode.  Unfortunately, this type of recovery may be good for a neighborhood, it just hasn't spread to the entire area - yet.

No matter how one chooses to look at the real estate market, prices are continuing to deteriorate.  According to one analyst, Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California-Los Angeles, "This reflects a market that continues to be in search of a bottom."  Not good news for sellers.  However, it can be good news for buyers and investors.  When the inventory is reduced to lower levels, the law of supply and demand should kick in to finally begin to move housing prices up in the Tampa Bay real estate market as well as nationally.

In short, as long as unemployment continues to drag down the local and/or the national economies, and people don't have income to buy homes, the real estate market will be the bellwether for the economy and its recovery.

Has Palm Harbor Real Estate Stabilized Yet?

by Doug & Gwen Campbell at Sun Bay Associates

Has the Pinellas County real estate market stabilized yet?  The honest answer should be "Who knows?"  The numbers are giving us clues that just maybe, the Pinellas County real estate market has stabilized or at least started to stabilize.  The number of single family listings for year on year in June has decreased to 4,655 from the previous year of 6,479.  This represents a 28.2% decrease in single family listings in 2011 vs. 2010.  The number of Pinellas County single family home sales year on year for June went down to 786 from the previous yuear at 802.  This represents a 2% decrease in unit sales for 2011 compared to 2010.  All in all, an optimist can see that inventory is dropping to a manageable volume, from the high of 11,226 listings in March of 2007.  That month saw only 687 single family homes sell, an absorption rate of only 6%.

The absorption rate for Pinellas County in June 2011 was 16.9%.  This means that 16.9% of all single family home listed in Pinellas County in June actually sold.  The year on year absorption rate for June 2011 is up from 12.4% in June 2010.  This means that the inventory of houses is decreasing.  A small irony is that despite the decreased inventory, the mean sold prices of single family homes decreased by 2.2% in June 2011 from June 2010.

The median price for single family homes sold in June 2011 was $132,000.  The median price in June 2006 for single family homes was $238,000.  Thus, as every home seller can attest, single family home median prices have dropped by about 44% since 2006.

Now, for those sellers who are thinking that they can just ride this out for another couple of months and sell for a higher price.  My opinion, and that of many, many very knowledgeable people, is that if you do not need to sell now - DON'T.  If, as life happens, you are in a situation where you need to sell your home, swallow the bitter pill and put it on the market at a fair market price.  Doing so will net you the most money possible in the quickest time frame.  Hoping to get a price much above market value will continue to cost money and lead to a stale listing that does not sell quickly and not for the best price possible. 

What you "need" to get or "want" to get from the sale is not relevant to the market of today.  Take what the market will give you, and move on with your life.

 

To Buy New Construction or Resale

by Doug & Gwen Campbell at Sun Bay Associates

Most people who are looking for a home start with resale houses.  In today's market, an overlooked market could be new construction.  Let's look at some of the issues for comparison, especially in a market like that we are experiencing in the Tampa Bay area.  Many of the most desirable locations are already built out so often the only option is to buy a resale house.  The biggest advantage is the location.  A resale house be in the perfect location, for schools, shopping, health care, or other amenities.  Potential drawbacks might be delayed maintenance, the architecture isn't exactly what the buyer wants, the appliances can be older or in need of immediate replacement, the roof might be nearing the end of its life.  Purchasing a home warranty is a prudent precaution.  Advantages, besides the location may be the yard is perfect with mature landscaping, the cost per square foot (when considering some of the features) might be less than most new construction, the local restaurants and shopping are very convenient, the school is close enough to walk to.

New construction may have some disadvantages.  The location might be farther from amenities, such as schools, shopping, restaurants, etc. than similar older houses.  The landscaping is probably not as lush or mature as more established neighborhoods.

Some of the advantages of buying new construction can include bulider financing that can save closing costs, the new home construction comes with a builder's warranty so that anything that goes wrong in the first year is fixed.  The buyer has direct input into the exact layout of the house and the appliances and other features (surround sound, special lighting, flooring, etc.) that would be extra costs to install in older construction.  And one of the biggest advantages of buying new construction, everything is brand new!! In some micro-markets, new construction costs can be just about the same as purchasing a resale house.

There are builders who have come to realize that huge building developments might not be such a good idea and are now looking for smaller areas, scattered lots within a targeted area.  They build homes that are in the right location, meet the cost needs of many buyers, and come with the builder's warranty.  If you are looking for the best of all worlds, new construction that is not in a huge development just might be the answer.

Sometimes the location is the absolute most important benefit.  Sometimes the newness can be the most important benefit.  Then, as with most house purchases, a blend of convenience, amenities, location, and cost lead to the best decision.

Planning during the construction of a new home can be hugely entertaining for some, or a bother for others.  You make the decision.  Sometimes new construction really is the better deal, even if you have to drive a few extra minutes to work or to the grocery store.

Displaying blog entries 1-3 of 3

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Photo of Gwen and  Doug Campbell - Sun Bay Realty Group Real Estate
Gwen and Doug Campbell - Sun Bay Realty Group
at Keller Williams Realty
30522 US Hwy 19N, Suite 107 S
Palm Harbor FL 34684
Doug's Cell 727-741-4189
Gwen's Cell 727-741-7260
Fax: 888-447-7908