Is Now The Time To Buy Property?

If you've been thinking about buying property, you're probably asking yourself if this is a good time to buy or will prices fall later in the year?

Good question. Fair question. Sensible question.

Unfortunately, I don't think anybody knows the answer. If you find out what it is, please let me know.

Real estate prices tend to be cyclical. Historically, the longer you own the property the more likely you are to sell it at a profit as prices cycle from high to low and then back to high a few years later. Conversely, if you buy property as a speculative real estate investment that you want to sell quickly at a profit, an unexpected downturn in the cycle may mean you face a net loss. The timing can be tricky. You have to know where you are on the real estate cycle.

Nationally syndicated columnist Kenneth R. Harney recently wrote a column which appeared in the St. Petersburg Times in which he looked at today's real estate market as part of a long-term research project prepared by PMI Mortgage Insurance Company, a big-time loan underwriter who stands to make or lose millions as real estate prices cycle up and down. They looked at real estate prices in 50 major metropolitan areas going back to about 1990. In a nutshell, they discovered that if you buy at the top of a cycle as a short-term speculator and sell during an economic down cycle a couple of years later, you're likely going to lose money (or not make as much as you had hoped). On the other hand, if you live in a property for seven to ten years, the odds are good that you'll come out ahead because you will, presumably, be able to time the sale of your property to the next up-cycle.

Real estate profits, it seems, depend on how long you own the investment and where you are on the cycle at the time you bought the property.

Right now, indications seem to be that we are headed for something of a flattening out of market values. Some guru's even predict falling prices in some markets including some areas in Florida. If that's the case, you may need to hold your property for a longer period of time. If you're a short-term speculator, you may need to change your business model and use your property as a rental investment for several years rather than as a buy-and-flip opportunity. If you're going to reside in the property, you may want to buy something that will meet your needs for a longer period of time and take a longer view of home ownership.

But should you buy now? Yes, I think you should if you approach the purchase along the lines outlined above. I like what American humorist Will Rogers said about real estate many years ago. "Don't wait to buy real estate," advised Rogers. "Buy real estate, and wait."

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Location, Location, Location

Location, location, location. It's the oldest saying in real estate and it's still true today.

In a study called the "Florida 2005 Profile of Home Buyers and Sellers", 65-percent of recent Florida buyers ranked "neighborhood quality" as the single most important factor influencing their decision about purchasing a home. The study was conducted by the National Association of Realtors for the Florida Association of Realtors.

I guess old-sayings become old-sayings because they're old-truths.

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Duplex For Sale In St. Petersburg

Investors take note! One of my personal income properties is now on the market -- and I've got it bargain priced.

This duplex is located in northeast St. Petersburg at 141 NE Monroe Circle North. Each apartment has 2 bedrooms and 1 bath, a dining room, galley kitchen and living room. A new roof was put on in 2004 when I bought the property, and I had it painted at about the same time. The building is gray trimmed in white with red doors and brass kickplates. Looks real sharp. This photo doesn't do it justice -- everything looks too blue for some reason.

I've done some updating to the kitchen and bath in the front unit, but the rear unit had a tenant in it until recently so I didn't do anything much to it. That tenant is now gone after five years in residence, so the rear unit needs some updating to the kitchen and bath. There's also alley access in the rear of the building.

This is a solidly built concrete block building in a popular area of St. Petersburg that is convenient to downtown and makes for an easy commute to Tampa or Clearwater. I've never had a problem finding renters for the property.

My asking price is $189,900 in its "as is" condition. I will contribute $750 for the new owner's first year flood insurance premium -- the flood insurance for this year was only $715.

This property is listed with Tourtelot Brothers Real Estate (727-823-8383) and is in the MLS. It offers a 3% commission to the buyer's agent. By the way, I am a Broker Associate at Tourtelot Brothers and this is my personal property.

If you or someone you know is lookng for a nice solid investment property at a bargain price, this may be just the ticket. Give me a call at 727-215-7722 and we can talk about it.

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Job Growth Looks Good In Florida

In case you missed it, the St. Petersburg Times carried a little article on April 22nd that had some good statistics for Florida job growth.

1. During March, 2006, there were 24,500 new jobs created in Florida.
2. Florida's unemployment rate was only 3.1%; the U.S. unemployment rate was 4.7%.
3. Tampa Bay's unemployment rate stood at 2.9%.
4. Florida had the most jobs created in the year ended March, 2006: 306,100 new jobs.

The source for this info is the Bureau of Labor Statistics.

Job growth and the creation of entirely new jobs is generally good for the real estate market. New jobs mean new people moving into the state and current residents moving up to newer, larger and often more expensive homes.

As they say: "It's a good thing."

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Why FSBO's Don't Get Full Market Value

In the fall of 2005, I had a couple of properties I no longer wanted to own. I decided I could list them with my broker, or I could have a little fun and try to sell them myself as an unrepresented seller -- a FSBO, as is known in popular jargon.

I opted to become a FSBO for three months. Just for fun, you understand.

Well, the fun went out of it real, real, real fast. First off, I never did successfully sell either of the properties as a FSBO seller. But I sure learned a lot about the problems FSBO sellers must overcome when working with buyers who don't have real estate agents.

I found out that there are some pretty sophisticated, professional buyers out there -- and they have no mercy when it comes to buying property.

These buyers often use two pretty harmless sounding techniques to get sellers to lower the price. I think they all went to the same "home buying seminar". I call the first technique the "yes but" approach, and the other I call the "poor-old-boy-sob-story" ploy.

The "yes but" approach is used after the buyer has walked through the property and given it a nice inspection. He may even engage you in friendly conversation to build rapport. Eventually he will ask the price.

"My asking price is $225,000," I'd say.

"Yes, but what will you take for it?" (It's funny how these buyers can draw out that word "take". It becomes "taaaaaaaaaaakke for it". They must teach that inflection at the seminar.)

Well, this is just an attempt to get you, as the seller, to bid against yourself. The buyer has not even made an offer and the seller is already being asked to lower the price. The seller is bidding down his own price! Don't fall into that trap.

Here's the second ploy used by buyers. Let's say that you, as the seller, manage to avoid the first attempt by the buyer to get you to bid against yourself. Beware of the "poor-old-boy-sob-story" approach. Essentially, the buyer starts off by telling you how much they like your property and how much they want to live in your neighborhood and how much they love what you've done to update the kitchen and blah, blah, blah. All good things. All things to make you feel warm and fuzzy toward them. All things to make you want to sell the house to these nice, friendly folks.

Beware! Here it comes.

The next thing the buyer will say will always -- repeat, always -- begin with the words "but" or "there's". It never fails. It will be something like this ... "blah, blah, blah but (insert sob story), so we need to know your rock bottom price." Or, "... blah, blah, blah there's just one thing (insert sob story), so we need to know the lowest you'll take."

If you, as a seller, say anything other than your original asking price you are likely going to sell your house for less than you want, and maybe less than it's true market value. FSBO sellers seem to fall into these two traps with some degree of regularity. Weak negotiating skills are one of the reasons why FSBO's end up selling their propery for an average of 16% less than comparable properties sold by a real estate agent.

So, here's a tip: When negotiating with buyers who do not have a real estate agent -- and even those who do in some cases -- make sure the buyer presents an offer in writing that fully spells out the amount of money they are offering and all the other terms under which they are willing to buy your property. Period. Until then, don't budge a dime off your original asking price. Don't even indicate that you're willing to negotiate on price.

Remember, when it comes to negotiating price, he who speaks first looses.

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Buyer Tip: Obtain A Pre-Approval Letter

If you want to acquire residential property in Pinellas County right now, you're in luck. Your chances of locating that "just right" piece of real estate have increased by almost 270% over your chances of a year ago. That's because in March, 2005 there were only 4,633 residential properties on the market in Pinellas County. Today, that number has increased to 12,503.

Buyers are now in a much better position to find their dream house or condo simply because there are more properties from which to select. Once you've found you're place in the sun, however, you still have to make an acceptable offer to the seller. Sellers want two things: an acceptable amount of money, and a buyer who has the financial capability to complete the transaction.

As a buyer, it's up to you to convince the seller that you have the financial ability to "do the deal" as they say. The best way to demonstrate this proof is to attach a letter of pre-approval from your mortgage company to your written purchase offer. That letter tells the seller that you are a serious buyer and have the resources to complete the transaction.

I've seen cases in which multiple offers were made on properties, but the buyer presenting a letter of pre-approval was the one who got the property. In fact, it happened to a couple I represented recently on a condo sale on St. Pete Beach. They did not make the highest offer on the condo, but they had a letter of pre-approval. The other people didn't. My clients now live in the condo -- happily, I might add.

So, how do you get a letter of pre-approval? Simple. To become pre-approved, just visit your mortgage company and complete the application process before starting your property search. You must complete the application procedure anyway, so do it before you start looking at real estate. It's the smart thing to do.

That letter of pre-approval tells a seller you have actually been approved by the lender to make a purchase. This gives you a huge edge in the purchasing process because sellers realize they are negotiating with someone capable of completing the purchase.

Pre-approval letters. It's a great tip that will make you a more effective buyer.

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Two Great Home Tours In April

Lace-up your most comfortable walking shoes and step out to two great walking tours in April.

Old Southeast Neighborhood is hosting its 10th Annual Home & Garden Tour from 10 a.m. to 4 p.m. on April 22nd. You'll be able to tour lovely homes and tasteful gardens from various eras on this popular walking tour. Tickets for the tour are only $10 and can be obtained at Lassing Park which is at the corner of Beach Drive and 22nd Avenue SE. For additional info go to www.stpete.org/nnold.htm.

If Ybor City is more your style, you'll want to attend the Ybor City Neighborhood Expo. It's also being held on April 22nd. A free vendor fair with 20 exhibitors and a preservation workshop will be held from 10 a.m. to 4 p.m. From 11 a.m. to 3 p.m. you can tour 12 homes and condominiums in Ybor. Price for the home tour is only $10 and tickets can be purchased at the Ybor City Museum, 2009 N. 18th Street in Tampa.

See you there!

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Downtown St. Petersburg's Projected Growth

Downtown St. Petersburg is growing rapidly. In fact, the city's skyline is going to change dramatically once all the newly permitted buildings have been completed in a couple of years.

The St. Petersburg Times has prepared a very interesting graphic which will show you how the city will look in the year 2008, assuming everything scheduled to be built actually gets completed. Just go to www.sptimes.com/2006/03/19/skyline and be sure to click on the projected view of the city. The base photo morphs into the city of the future. It's really cool!

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St. Pete's Best Spots For Bungalows

Bungalows. Those lovely 2 bedroom, 1 bath homes that were built as winter residences back in the 1920's and 1930's. They're quite the thing in St. Petersburg now. Buy a bungalow, install a modernized bathroom, new kitchen, tile floors -- hey, it's a nice way to live.

But where are the best bungalows to be found?

Well, to find bungalows, you have to step back to the neighborhoods that existed when they were built. Searching for a bungalow is like going back 80 years in St. Petersburg's history. Below are the neighborhoods where bungalows can be found, along with the area and grid locations for maps used by Realtors.

Gulfport Arts District ---- Area 352 ---- Grid J-30
Historic Kenwood ---- Area 321 ---- Grids L-27 and L-28
Crescent Lake ---- Area 321 ---- Grids N-27 and N-28
Crescent Heights ---- Area 322 ---- Grid N-26
Woodlawn ---- Area 322 ---- Grid M-26
Euclid/St. Paul's ---- Area 322 ---- Grid M-27
Round Lake ---- Area 321 ---- Grid N-28
Old Southeast ---- Area 361 ---- Grid O-29
Old Northeast ---- Area 311 ---- Grid O-27 and O-28
Bahama Shores ---- Area 363 ---- Grid N-32
Driftwood ---- Area 362 ---- Grids N-30 and O-30
Passagrille ---- Area 371 ---- Grid H-33 and H-34

Okay, technically Gulfport and Passagrille are not part of St. Petersburg, but they're in the area so I'm including them. Besides, you can't search for a bungalow without seeing these two lovely communities.

Now, this is not to imply that you won't find bungalows elsewhere in the area, but these neighborhoods seem to have the highest concentration of the snug, easy-living little houses. As you might expect, as the houses have been revitalized, so have the neighborhoods. Bungalows are in some of the city's most popular and nicely maintained residential areas.

Curious about bungalows? Next time it's offered, why not take part in Historic Kenwood's famous Bungalowfest, or Gulfport's annual Tour of Homes. These are neighborhood walking tours in which you can inspect many nicely restored bungalows, see what the owners' have done to remodel them, and get an idea about pricing from any that are for sale. It's a great way to spend a day.

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March Figures Show Sales Improvement

The Pinellas Realtor Organization (PRO) has released figures for March, 2006 which show that sales have increased over those reported in February. That's good news for sellers throughout the county.

According to PRO's report, sales of single family homes for March were 1,079 as compared to only 801 in February, 2006. Sales of condominiums in March were 568, up from February's sales of only 427 units.

Listed property figures showed that more and more properties are being placed on the market, thus giving buyers a wider selection of properties from which to select. According to PRO's figures, listings of single family homes during March rose to 7,325 homes as compared to 6,544 homes on the market in February, 2006, an increase of 781 homes. It is important to note that in March of 2005, only 3,016 homes were listed for sale in Pinellas County. Condominium listings also increased substantially during March to 5,178 units now for sale versus 4,855 in February. In March, 2005, only 1,617 condos were on the market in Pinellas County.

While sales figures for March 2006 have improved, they still show a lagging market as compared to figures from the same time a year ago. The March 2006 absorption rate for Pinellas County single family homes is 14.7% while it stood at a brisk 43.4% in March, 2005. Condo absorption was 11.0% in March 2006 versus a robust 43.0% in March of a year ago. The absorption rate, or inventory turnover, is determined by dividing the number of units sold during the month by the total number of listings sold in the Multiple Listing Service. The higher the absorption rate, the faster property is being sold.

In summary, while sales activity increased somewhat during March, the number of listed homes continues to increase, thus contributing to a growing inventory of unsold properties throughout Pinellas County. The low absorption figures tend to indicate that the market continues on the sluggish course it has been on for the past few months.

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Special Website For Condo Owners

Tampa Bay has been a hotbed for condo development during the last 3 or 4 years. New condos are going up all over St. Petersburg, St. Pete Beach, Tampa, Clearwater and practically everywhere in between.

That means lots of new condo residents, many of whom may never have lived the condo lifestyle before. To help these new owners, there's a website just for them. It's www.myflcondo.org.

The site is a place where condo owners can learn their rights and responsibilities, file a complaint against their condo board or just ask questions. Florida's Condo Ombudsman, Virgil Rizzo, is the driving force behind this site. His office was established for the purpose of handling disputes between condo owners and boards of directors. The office also helps develop new laws related to condominium law in Florida.

So, if you're a new condo owner anywhere in Florida, log onto this site and see what's available to you.

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Good Idea For Sellers

Sellers often ask real estate agents for ideas which will make their property more appealing to prospective buyers. In the real estate business, we often refer to this process as "staging" the property and it's important. Staging often includes discussions about reducing interior clutter, curb appeal, setting the dining room table, changing the color of the bathroom towels to match the tile, and zillions of similar topics. The goal of effective staging is to allow your house to look its very best by displaying your own good taste.

Recently I ran across a staging idea that was so simple and easy to do that I'm surprised more sellers don't do it.

Simply turn on your stereo with some nice, soft, mellow music.

Keep the volume low; this is supposed to be background music. Visitors should be aware of the music, but it should not be overpowering. It's "mood music". Man, does this ever make a great impression when the buyer is walking through your house. For some reason, the effect of the music seems to be even more dramatic if you're not in the property when it is being shown. It's a really nice touch and adds a bit of sophistication to your property presentation and an air of welcome that buyers seem to appreciate.

I suggest loading some mellow jazz or maybe some light classical CD's. Nothing heavy. I think instrumental music is best for staging a house or condo, but appropriate vocals might be nice too. It's up to you. I'd recommend staying away from rap or rock. Remember, you're setting the mood for selling, not dancing. If you don't have a stereo, tune in an appropriate station on your FM radio. That's probably just as good.

How's that for a simple idea? I'm going to recommend it to the sellers I represent on a regular basis. Why not give it a try, and let me know if it helps!

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Rural Land Values Soar In 2005

So, you want to buy a rural estate. Say, a mere 100 acres. Just enough to keep things private. Quiet. Secluded. A little breathing room after all that time spent earning a living in the big city.

Well, that's fine. You probably deserve it.

Just one thing. Better bring the checkbook for the account where you keep the big money.

You see, prices for agricultural land jumped 88 percent in Florida during the last 12 months according to the University of Florida's latest Florida Agricultural Land Value Survey.

That's not a misprint, folks, that's an 88 precent jump in one year for agricultural land in Florida.

The reason for the big jump may be because most of the farmland is not going to be used for agricultural purposes. According to an article in April's issue of Florida Realtor Magazine, John Reynolds, a professor with the University of Florida's Institute of Food and Agricultural Sciences, said much of this land is being bought up by land speculators, developers and foreign investors. There is also a strong demand for rural home sites.

According to Reynolds, agricltural land in northwest Florida averages about $2,700 per acre for unimproved pasture and woods. In central and south Florida, those orange groves and pastures will average about $10,000 per acre. So, that little 100-acre tract of orange trees down near Clewiston where you want to build your special hideaway will probably involve a land cost of around $1,000,000 if I worked the math right.

I can hear my father now: "A million dollars for a hundred acres of dirt? I can remember when you could have bought all of St. Pete Beach for a million dollars." Well, dad, times change. And so do dirt prices. In fact, in all regions of the state the value of crop and pastureland jumped 85 to 87 percent last year.

For more information about this study, "Strong Nonagricultural Demand Keeps Agricultural Land Values Increasing", go to http//edis.ifas.ufl.edu.

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