October Sales Report: Simply Devastating
For some unknown reason, I thought the sales report for October would be better. I don't know why I thought that way, wishful thinking is so unlike me.
October was devastatingly bad.
As usual, let's start by reviewing the absorption rate which is calculated by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service (MLS).
For single family homes, the absorption rate for October was 7.2%. A year ago, it was 25.5%, and we were already in a market slowdown then. The October 2006 absorption rate is actually an improvement of .2% over last month. Pretty sorry, eh? In point of fact, October 2006 was the second worst absorption rate since the MLS began keeping such records in January 2003.
I hate to tell you this, but condo sales were even worse.
The condo absorption rate fell to 4.7%. It was 26.9% in October 2005. The October 2006 rate is actually a decrease of .6% over where we were in September condo sales. Simply yuckie.
Let's take a look at each category and see where we stand.
Single Family Home Listings: In October 2006, there were 10,225 single family homes in the Pinellas MLS system. This is the highest number of listings since the MLS started publishing such data in January 2001.
Single Family Home Sales: There were 738 homes sold in October. That's an increase of 32 homes sold over September's sales figure. It proves only one thing: there are still buyers out there.
Single Family Home Median Selling Price: The median selling price was $220,000 in October. By comparison, it was $276,000 a year ago. So the median has dropped by $56,000 in a year.
Look, let's call it like it is. If you have a home you want to sell, today you have more competition for fewer buyers than you have ever had before -- and that situation seems to be getting worse every month. Your best hope to sell is to price the home properly based on today's market prices, and require that your real estate agent implement a high level, high impact marketing plan designed to find you a buyer by exposing your home to the maximum number of home shoppers. Forget trying to do this "For Sale By Owner", it won't work because you won't have the marketing firepower to impact enough potential buyers. Forget using one of those cut-rate or discount brokers. They won't give you enough marketing firepower to get your house in front of enough potential buyers. Remember, with discount brokers you get what you pay for. My recommendation is to put it on the market with a real real estate agent who knows what's-what in today's marketplace and has the marketing tools to get your house sold. Then, be prepared to entertain any and all offers that come in. Oh, and be patient.
Now, let's look at condos.
Condo Listings: Condo listings increased in October 2006 to 6,257 units. In September of this year there were at 6,075. So, the number of condos on the market is increasing.
Condo Sales: Condo sales are getting worse. They dropped in October to 296 units sold. In September there were 322 sales. Pretty sorry.
Condo Median Sales Price: More bad news. The median price in October was $159,900. It was $214,900 in October of 2005. So, condo median prices have dropped $55,000 in a year's time.
If you want to sell a condo, please re-read the paragraph about selling single family homes (above). The exact same recommendation applies to you.
Now, if you're a buyer all this is great news! Consider these facts:
So, good time for buyers. Tough time for sellers. It's the new normal. Act accordingly.
For more information about real estate in Pinellas County, visit my website at www.TheStPeteRealEstateSite.com.
October was devastatingly bad.
As usual, let's start by reviewing the absorption rate which is calculated by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service (MLS).
For single family homes, the absorption rate for October was 7.2%. A year ago, it was 25.5%, and we were already in a market slowdown then. The October 2006 absorption rate is actually an improvement of .2% over last month. Pretty sorry, eh? In point of fact, October 2006 was the second worst absorption rate since the MLS began keeping such records in January 2003.
I hate to tell you this, but condo sales were even worse.
The condo absorption rate fell to 4.7%. It was 26.9% in October 2005. The October 2006 rate is actually a decrease of .6% over where we were in September condo sales. Simply yuckie.
Let's take a look at each category and see where we stand.
Single Family Home Listings: In October 2006, there were 10,225 single family homes in the Pinellas MLS system. This is the highest number of listings since the MLS started publishing such data in January 2001.
Single Family Home Sales: There were 738 homes sold in October. That's an increase of 32 homes sold over September's sales figure. It proves only one thing: there are still buyers out there.
Single Family Home Median Selling Price: The median selling price was $220,000 in October. By comparison, it was $276,000 a year ago. So the median has dropped by $56,000 in a year.
Look, let's call it like it is. If you have a home you want to sell, today you have more competition for fewer buyers than you have ever had before -- and that situation seems to be getting worse every month. Your best hope to sell is to price the home properly based on today's market prices, and require that your real estate agent implement a high level, high impact marketing plan designed to find you a buyer by exposing your home to the maximum number of home shoppers. Forget trying to do this "For Sale By Owner", it won't work because you won't have the marketing firepower to impact enough potential buyers. Forget using one of those cut-rate or discount brokers. They won't give you enough marketing firepower to get your house in front of enough potential buyers. Remember, with discount brokers you get what you pay for. My recommendation is to put it on the market with a real real estate agent who knows what's-what in today's marketplace and has the marketing tools to get your house sold. Then, be prepared to entertain any and all offers that come in. Oh, and be patient.
Now, let's look at condos.
Condo Listings: Condo listings increased in October 2006 to 6,257 units. In September of this year there were at 6,075. So, the number of condos on the market is increasing.
Condo Sales: Condo sales are getting worse. They dropped in October to 296 units sold. In September there were 322 sales. Pretty sorry.
Condo Median Sales Price: More bad news. The median price in October was $159,900. It was $214,900 in October of 2005. So, condo median prices have dropped $55,000 in a year's time.
If you want to sell a condo, please re-read the paragraph about selling single family homes (above). The exact same recommendation applies to you.
Now, if you're a buyer all this is great news! Consider these facts:
- Selection is huge because inventories are up. So you can choose from a wide range of homes and condos across all price ranges.
- Sellers are anxious, if not desparate. So, they'll probably consider almost any kind of fairly decent offer. Now's the time to negotiate.
- Interest rates are low! Historically speaking, mortgage rates are really very attractive -- and some people believe that a weakening U.S. economy will force interest rates to go even lower after the first of the year, so you might want to consider one of those new adjustable rate mortgages.
- Prices may have bottomed-out! Re-read the info on median prices in this article. The median prices are way down over where they were a year ago. If you've been waiting for the market to "bottom out", this may be it. For all anybody knows, the market has bottomed-out and if you don't buy now you may miss it and find yourself once again trying to buy on a rising market.
So, good time for buyers. Tough time for sellers. It's the new normal. Act accordingly.
For more information about real estate in Pinellas County, visit my website at www.TheStPeteRealEstateSite.com.
-30-
posted by Terry Ward at 4:51 AM
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