A Very Good Year? By Whose Opinion?
I'm sure that by now you have all read the big headline in the St. Petersburg Times business section for Friday, December 29, 2006. Just in case you missed it, it read "Home sales dip; prices hold". The subheadline read: "Overall, it was a very good year for the bay area. Really. It just can't compare with 2005."
Well, if it can't compare with 2005 since that was such a banner year, let's compare 2006 with 2004 and pretend like 2005 never happened.
Now, to be fair, the Times used data that reported on the entire Tampa Bay area. I don't have data like that, so I'm going to use data for Pinellas County only. I obtained this data from the Pinellas Realtor Organization, so it's probably pretty darn accurte.
In November 2006 in Pinellas County there were 586 sales of single family homes. In November 2004 there were 1,007. A decrease in single family sales of 42%.
In November 2006 in Pinellas County there were 263 condo sales. In November 2004 there were 502 sales. A decrease in condo sales of 48%.
So, forgetting 2005, sales volume is way, way, way off as compared to 2004. And I'll tell you something else: sales valume was way, way, way off compared to 2003, 2002, and 2001. If you want the numbers, just e-mail me and I'll see that you get them.
Let's compare median prices now.
The single family median price for November 2006 was $216,000. The median price for November 2004 was $218,000. A decrease of only about 1%.
The median price for condos in November 2006 was $155,900. The median price in November 2004 was $150,000. So the median price for condos went up about 3%.
I'll tell you something else, prices for single family homes and condos have gone up continually since 2001 if you don't count 2005. In 2005, median prices skyrocketed and dropped in 2006. But in this article, we're pretending that 2005 didn't happen, remember?
So, to summarize, sales volume is down but prices are steady -- just like the St. Petersburg Times story reported.
I guess my point is this: By whose standards was 2006 a "very good year"? When sales volume is down by about 45 percentage points and prices remain relatively steady, that does not make for a good year. Think about it this way ... If prices are the same and volume is cut in half, gross revenue is down by about half. If gross revenue is halved, everybody associated with real estate must try to make a living on about half the normal amount of money for the industry.
How is that "a very good year for the bay area. Really." And remember, I'm skipping the "banner year" of 2005 and making the comparison with 2004. If I'd used 2005, the numbers would likely have looked much worse for 2006.
I really don't understand how the St. Petersburg Times can write "Overall, 2006 was one of the best years for home sales on record, though the market looks tepid against the boom-to-end-all-booms in 2005." What year are they comparing 2006 to? 1929? 1942? 1991? Compared to those years, 2006 may have been a pretty good year. But statistics prove that 2006 was the worst year in Pinellas County for sales volume since 2001.
I think the writers at the St. Petersburg Times have been spending too much time talking to the public relations people at the real estate organizations who are trying to put a positive spin on a bad situation.
For more information on real estate in the Tampa Bay area, go to my website at www.TheStPeteRealEstateSite.com.
Well, if it can't compare with 2005 since that was such a banner year, let's compare 2006 with 2004 and pretend like 2005 never happened.
Now, to be fair, the Times used data that reported on the entire Tampa Bay area. I don't have data like that, so I'm going to use data for Pinellas County only. I obtained this data from the Pinellas Realtor Organization, so it's probably pretty darn accurte.
In November 2006 in Pinellas County there were 586 sales of single family homes. In November 2004 there were 1,007. A decrease in single family sales of 42%.
In November 2006 in Pinellas County there were 263 condo sales. In November 2004 there were 502 sales. A decrease in condo sales of 48%.
So, forgetting 2005, sales volume is way, way, way off as compared to 2004. And I'll tell you something else: sales valume was way, way, way off compared to 2003, 2002, and 2001. If you want the numbers, just e-mail me and I'll see that you get them.
Let's compare median prices now.
The single family median price for November 2006 was $216,000. The median price for November 2004 was $218,000. A decrease of only about 1%.
The median price for condos in November 2006 was $155,900. The median price in November 2004 was $150,000. So the median price for condos went up about 3%.
I'll tell you something else, prices for single family homes and condos have gone up continually since 2001 if you don't count 2005. In 2005, median prices skyrocketed and dropped in 2006. But in this article, we're pretending that 2005 didn't happen, remember?
So, to summarize, sales volume is down but prices are steady -- just like the St. Petersburg Times story reported.
I guess my point is this: By whose standards was 2006 a "very good year"? When sales volume is down by about 45 percentage points and prices remain relatively steady, that does not make for a good year. Think about it this way ... If prices are the same and volume is cut in half, gross revenue is down by about half. If gross revenue is halved, everybody associated with real estate must try to make a living on about half the normal amount of money for the industry.
How is that "a very good year for the bay area. Really." And remember, I'm skipping the "banner year" of 2005 and making the comparison with 2004. If I'd used 2005, the numbers would likely have looked much worse for 2006.
I really don't understand how the St. Petersburg Times can write "Overall, 2006 was one of the best years for home sales on record, though the market looks tepid against the boom-to-end-all-booms in 2005." What year are they comparing 2006 to? 1929? 1942? 1991? Compared to those years, 2006 may have been a pretty good year. But statistics prove that 2006 was the worst year in Pinellas County for sales volume since 2001.
I think the writers at the St. Petersburg Times have been spending too much time talking to the public relations people at the real estate organizations who are trying to put a positive spin on a bad situation.
For more information on real estate in the Tampa Bay area, go to my website at www.TheStPeteRealEstateSite.com.
-30-
posted by Terry Ward at 6:56 AM
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