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It's April, Has the Real Estate Market Stabilized?

by Doug & Gwen Campbell at Sun Bay Associates

The real estate market in Pinellas County, Florida is humming.  And the following appears to be a contradiction, yet it is not. Read on to see why.

Pinellas County, Florida is in the midst of one of the worst real estate markets in the country.  Does that mean that real estate is dead?  No, of course not.  People still need housing, people move, people are buying their first homes, and sadly, people still are dying so their homes need to be sold. 

Using some of the key indicators, such as absorption rate - the time it will take the current inventory to be sold, help to see the Pinellas County, Florida real estate market in a slightly different light.  It may indicate that the market is close to stabilized.  The absorption rate year on year for single family homes is up 18.4%, which means that houses are selling much quicker than they did at this time last year.  A possible sign the Pinellas County, Florida real estate market has stabilized.

The number of active listings year on year for single family homes is down 15%.  This means simply that more homes are being sold each month than are being listed for sale.

The number of single family home sales year to date is up 16.7%.  This simply means that we are selling a good number more homes this year than at the same time last year. 

In my opinion, the market is very slowly moving in the right direction towards stabilization and much more sane pricing/growth.  There are numerous buyers in the market now looking for a deal.  So far this year, in the Pinellas County, Florida real estate market, about 65% of residential real estate transactions have been cash.  Houses are selling and houses that are priced at or near market value are selling very quickly.  The inventory is dwindling to the point we no longer have a year of inventory, we are down to about a 6 1/2 month inventory of houses.  The real estate market is in fact very busy.  Investors, especially cash buyers, are finding excellent properties at 1999 prices and can rent houses for immediate cash flow. 

Through April 2011, there have been 2,862 single family houses sold in this area compared to 2010 when 2453 houses sold at the same point in time.  This is a 16.7% increase in single family home sales.  This is not to say that prices are going up as yet.  Our mean prices, in Pinellas County, Florida, April 2010 to April 2011 are down 1.7%, which of course is why the units sold is increasing.  Add to this interest rates are still below 5%.  It all adds up to a wonderful opportunity for qualified buyers.  I am not saying the real estate market is rosy for everyone, it is, however, very busy, or as I said, humming.

Has Real Estate Stabilized?? Maybe.

by Doug & Gwen Campbell at Sun Bay Associates

A very commonly asked question is "Has the real estate market stabilized?"  The answer, according to a brief article from the National Association of Realtors magazine, is a resounding maybe.  In a Reuters news release, the following opinion was offered.

The Worst Is Over, Some Experts Conclude
With housing recovering slowly, most economists predicted in a recent survey that it will take at least five years for average home prices to climb back to the levels they commanded in 2006.

This year, some hard-hit areas may see another dip, but properties values will most likely rise.

"Softness in the summer months will be followed by firming conditions and momentum as the year unfolds and the economy strengthens," says Robert Denk, an economist for the National Association of Home Builders.

Source: Reuters News (08/12/2010)

This may be the first good news the consumer has heard about the real estate market in a long time.  In the Tampa Bay area, the general expectation is for additional price drops, although not nearly as severe as the last two years.  It is even possible that there is a light at the end of the tunnel that is NOT an oncoming train.

Has the Dunedin, FL Real Estate Market Stabilized

by Doug & Gwen Campbell at Sun Bay Associates

Has the Dunedin, FL real estate market stabilized?  It is beginning to look like the price freefall is over or at the very least slowed.  In the past 90 days, in 30 day increments, we review the Dunedin, FL real estate market and the following is what we see.

From January 26 thru February 26, 2010, there were 191 single family houses actively listed for sale.  In that period, there were 56 houses listed as Active with Contract and 38 houses listed as Pending Sales.  The critical number is that 32 houses in Dunedin sold in that period, with an average sales price of $183,788 and the average Days on Market, or DOM, of 80.  The list price to sales price ratio is 0.93, or average list price of $201,426 to average sale price of $183,788.

From February 26 thru March 26, 2010, the number of active listings was 191, 56 houses were listed as Active with Contract and 38 houses listed as Pending Sales.  In this time frame, 21 single family houses sold, at an average sales price of $171,748 and an average DOM of 44.  The list price to sales price ratio was 0.91, or an average list price of $184,675 to average sale price of $171,748.

From March 27 thru April 26, 2010, the number of active listings was 191, 56 houses were listed as Active with Contract and 38 houses listed as Pending Sales.  The stability of the active listings, under contract and pending sales is remarkable.  The number of single family homes in Dunedin that sold in this period was 28, at an average sales price of $178,984 and DOM of 66.  The list price to sales price ratio was 0.95, with an average list price of $188,624 to an average sales price of $178,984.

You can see that the number of listings in Dunedin has apparently stabilized, with 191 active listings and an average of 27 houses selling in any 30 day period.  This means that for every one house sold, 7 remain on the market.  Thus, if you, the seller, want to sell your home, you must be in the top 14% of houses on the market or you will most likely not get an offer.  The good news is that the prices for this 90 day window did not plummet for Dunedin, FL.  The number of houses on the market in Dunedin is holding steady, and the number being sold is also relatively steady.  This indicates that the Dunedin real estate market may be stabilizing.  If this is the case, and we will know more in the next 90 days, it is possible that prices will remain at least steady (read stabilized) for the next several months before there is any indication of an upward tic. 

If you are a buyer, this is clearly the best time to buy.  Prices are not going to get much lower, and with the impending increase in interest rates, the buyer will be getting less house for the same monthly payment

Has the Pinellas County Real Estate Market Stabilized

by Doug & Gwen Campbell at Sun Bay Associates

Has the Pinellas County real estate market stabilized?  That depends on how you interpret the information.  Although these numbers are for Pinellas County, they also apply to the Palm Harbor real estate and the Dunedin real estate markets as well, since these make up a significant part of Pinellas County real estate.

In November 2009, 28% of the houses sold in Pinellas County were distressed properties.  In December, 31% of the houses sold were distressed properties and in January 2010, 40% of the houses sold were distressed properties.  An eye popping percentage of distressed properties make up the pending sales for November, December and January.  In November, 68% of all pending sales were distressed, in December it was 72% and January 69% of ALL pending sales were distressed properties.

Pricing is also being impacted by distressed properties in the Pinellas County real estate market.  In November, the median price for a bank owned house was $85,500 while the pre-foreclosure price was $140,000 and the non-distressed price was $141,000.  For December the bank owned median prices were $74,600 vs. pre-foreclosure at $128,000 and non-distressed houses at $150,000.  And in January, the median bank owned prices were $84,000 while the pre-foreclosure prices were $130,000 and the non-distressed prices were $135,000.  Thus, the numbers show that the disparity between pre-foreclosure and non-distressed house prices is narrowing monthly.  This is partly because the banks want short sales to be at or very near to market value.  The spread between bank owned and other prices is because the bank owned houses are generally in worse condition and the bank has determined what it needs to get out of the deal, with no negotiation. 

The advantage to a bank owned sale is that it can happen quickly.  A short sale can take months.  Non-distressed properties tend to be in better condition and are relatively quick to close - thus can maintain a higher value.  This is changing because so much of the Pinellas County real estate market comprises of distressed properties that these become the market.  The number of houses being sold is on the rise, in the Palm Harbor and Dunedin real estate markets.  At the same time, the prices are at best flat or still going down.  Thus, the Pinellas County real estate market may be nearly stabilized, but still has a little way to go before anyone will step up and state the bottom has been hit and we are recovering.

To learn more about distressed properties, visit www.SunBayStopsForeclosure.com.  This site goes into details about short sales, foreclosure, deed in lieu and other distressed property issues.

Real Estate Market Stabilized? Or not.

by Doug & Gwen Campbell at Sun Bay Associates

Some people are saying the real estate market has stabilized.  Maybe or maybe not.  Foreclosures are still going up.  In fact, according to RealtyTrac.com, foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and a 23% increase from the same quarter in 2008!

In September alone there were more than 340,000 foreclosure filings, an increase of 29 percent from September 2008.  James Saccacio, CEO of RealtyTrac, stated that "Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters."

The bad news for Florida homeowners is that Florida is still in the top five states for foreclosures.  California, Florida, Arizona, Nevada, Illinois and Michigan accounted for 62% of the entire nation's foreclosure activity in the third quarter.  Florida posted more than 156,000 property foreclosure filings in the third quarter, a jump of 23% from the same quarter in 2008.

Maybe the real estate market is stabilizing in parts of the country, but not all states are created equal.  However, Floridians may consider themselves lucky, because in Detroit, the average home price is around $8,000.  That is not a typo, it is $8,000.  Sales are rebounding, and prices are still declining.  You decide if this is a stabilized reall estate market.

Has the Economy Stabilized? Well, maybe . . .

by Doug & Gwen Campbell at Sun Bay Associates

Has the economy stabilized?  According to Federal Reserve Chairman, Ben Bernanke, in an article by John W. Schoen for MSNBC, ". . . from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was." 

ADP, as national payroll manager, reported that US companies eliminated more than 250,000 jobs in September, more than experts had forecast.  And the first time claims for unemployment insurance rose to a seasonally adjusted 551,000, up by about 17,000 from the week before.  This also caught experts by surprise.

Spending was up in September, although overall not quite as much as in August.  Does this coincide with the end of the Cash for Clunkers program?  Housing sales are also up, almost 6.5% in August.  The first time homebuyers tax credit may have fueled some of this growth and it is possible that when the program ends on November 30, we could see a drop in home sales, especially for the first time homebuyers.  Despite housing sales numbers rising, the prices continue their dreary decline, although not as rapid a descent as in the past year.

Even the chairman of Wal-Mart Stores, Inc. has said that the global economic recovery will be "lethargic".  He expects the recovery to be strongest in Asia.

Jeffrey Immelt, CEO of General Electric also put a bit of a damper on the outlook of a stabilized economy by suggesting that high unemployment and slower lending will be a drag on the US economic growth, with the result being perhaps the weakest recovery in decades.

Housing prices are still going down, unemployment is going up, spending is up but may have been spiked by government programs, housing units sold are up and auto sales have plummeted downward.

So you tell me, has the economy stabilized?  One can only hope.

Pricing Strategy for the Real Estate Market

by Doug & Gwen Campbell at Sun Bay Associates

In today's real estate market pricing is everything.  As the market in Tampa Bay continues to decline, or even stabilize, there is no room for mistakes in pricing your home to sell.  Even if a home is priced just a few thousand dollars above the current market, as the prices continue to decline the market is not going to catch up to the overpriced home, or even see it.  When the seller finally realizes that his home is priced too high and reduces the price to close to, but usually just above the market, he is chasing the market and will continue not to be seen.

The best strategy in a declining market is to price the home just a bit lower than the current market.  This will allow the market to "see" your home and is far more likely to bring showings and most importantly, offers.  If you price your home just below the market it won't take long for the market to fall to that price range, and better yet, savvy buyers will find it right away.  This strategy can often lead to offers and a sale in 30-45 days while the overpriced houses sit on the market, being pretty much ignored, for months.

Price it right and it will sell, especially in a declining market.  Price it too high and buyers will not even look.  This will result in your ever so slightly overpriced house sitting on the market, getting shopworn.  Then buyers will ask, "What's wrong with that house?" instead of going to look at it and buy it.

When the market is increasing, being slightly overpriced will eventually lead to people finding your home as prices rise.  It is sort of like trying to catch a train, if you get there early, you can catch the train when it gets in.  However, if you overprice your home you are getting to the station ten minutes after the train has pulled out and you simply have missed the train, or the opportunity to sell your home.

Has the Real Estate Market Stabilized?

by Doug & Gwen Campbell at Sun Bay Associates

Has the Florida real estate market stabilized?  Has even the Tampa Bay real estate market stabilized?  The answer is maybe, but probably not.  Nationally the media is saying the recession has bottomed out and we are beginning a recovery.  That is very good news.  The not so good news is that Florida and the Tampa Bay area were hit so hard, especially by the housing slump, that it may take longer for the real estate market in the area to bottom out and thus begin a recovery.

The Florida economic recovery may be longer because layoffs are continuing.  There are 15% more families receiving welfare assistance in Florida than were a year ago, according to the St. Petersburg Times.  Florida's unemployment rate is over 11% compared to the national average of 9.5%.  With all this bad news, there is good news since the number of houses sold in June was up for the first time in many, many months.

As the national recession abates, the Florida recovery will follow, eventually.  Stabilized house prices are a very good sign that the Tampa Bay real estate market may be improving as reported by the Florida Association of Realtors, but one month does not a trend make.  Many experts are predicting that even in Florida the real estate market will stabilize by the end of the year.  We certainly hope so.

Displaying blog entries 1-8 of 8

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Photo of Gwen and  Doug Campbell - The Campbell Team Real Estate
Gwen and Doug Campbell - The Campbell Team
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