Seller Advice: Raise The Commission

Those of you who read this blog regularly will remember that I have written several times that in a slow market, it is a good strategy to increase the real estate commission for buyer's agents by an extra one percent. If you normally offer a total commission of 6%, increase the commission to 7% and offer the buyer's agent 4%. Frankly, I advise doing this before reducing the price of the house.

This extra 1% of commission may set your house apart from others and give the buyer's agent an extra incentive to show your house instead of others. Showings are the life blood of a real estate transaction, and this added commission may be just what you need to get your house sold.

I'm not alone in believing that increasing the commission will help sell a house. So does syndicated real estate columnist Robert J. Bruss.

Writing in the September 3oth issue of the St. Petersburg Times, Bruss has once again given this same piece of sage advice. Like me, Bruss has advised increasing the commission in several of his articles. This time Bruss writes, "Increasing the commission going to the buyer's agent is just a variation on incentives that have been used for years in a slow market." He continues by writing, "That is a great incentive to get buyer's agents, through the local multiple listing service, to show and sell your property to their prospects."

If you're trying to sell your house and you are not getting enough people through, or if you're a real estate agent having trouble getting showings, I advise you to give this approach a try. It just might be the ticket.

For additional information on selling and buying real estate, visit my website at www.thestpeterealestatesite.com.

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Luxury Home Tour Starts September 30

The Greater Tampa Luxury Home Tour starts on Saturday, September 30th. This is a self-guided tour of 15 homes with starting prices of $1-million. This promises to be a great way to spend some time looking at high-end homes and luxury features that just aren't available in most properties.

The homes will be open from 10 a.m. to 5 p.m. today and Sunday. Then, they will be open again on October 6-8 and for a final time on October 13-15. The properties are located at six residential communities in Pasco, Pinellas and Hillsborough counties -- MiraBay and FishHawk Ranches in Hillsborough, Connerton and Trinity in Pasco, and Blackstone Estates and Grand Cypress in Pinellas.

Tour programs and maps can be obtained at any CVS store; tickets are available at CVS stores or online at luxuryhometour.net. Tickets cost $15 in advance or $20 at the homes. Single admission to each home is $5 if you don't want to do the entire tour.

You can get more information about the tour online at www.luxuryhometour.net.

This sounds like a great way to spend a weekend. Or, you could have fun reading my website at www.thestpeterealestatesite.com. Come to think of it, I guess going on the home tour would be more fun.

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The Hurricane Top-Ten List

Ever want to move to an area that does not have a high frequency of hurricanes? Be honest about it! No matter how much you like living in Florida, each time there's a hurricane aimed at our sunny shores, you give some thought to moving to Livingstone, Montana, don't you? I do.

Anyway, a bunch of university-types calling themselves the International Hurricane Research Center (IHRC) have made a list of the ten most vulnerable areas to huricane strikes. This list is based on a bunch of different criteria including historic storm frequency, storm intensity, levee/dike failure, storm surge, coastal erosion, island breaching, population at risk, and evacuation distance and routes.

Based on their research, here's the hurricane hot-list in order ...

1. New Orleans, LA
2. Lake Okeechobee, FL
3. Florida Keys
4. Coastal Mississippi
5. Miami/Ft. Lauderdale, FL
6. Galvenston/Houston, TX
7. Cape Hatteras, NC
8. Eastern Long Island, NY
9. Wilmington, NC
10. Tampa/St. Petersburg, FL

Hmmm ... it's hard to disagree with any of those choices for a top ten. But I wonder if these guys ever heard of such hurricane-prone areas as Charleston, SC, or Mobile, AL? Seems to me like I remember some pretty big storms slamming into those areas.

Keep your hurricane survival kits well-stocked, and for more information on surviving the real estate storms, visit my website at www.thestpeterealestatesite.com.

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Good News For Those Who Want Higher Flood Insurance Premiums

For those of you who support higher flood insurance premiums, there's good news afoot.

The U.S. House of Representatives approved a bill that raises premiums, phases out subsidies for flood-prone older homes, and forces property owners in floodplains to buy policies whether they want them or not.

The U.S. Senate is now considering the bill along with several other proposals designed to "strengthen" the national flood insurance program. "Strengthen" is bureaucrat-speak for making something more expensive and harder to administer.

Oh, by the way, the Federal Emergency Management Agency (FEMA) raised flood insurance rates by 6-percent recently all by themselves. You may have missed that little factoid.

For those of us who are having problems paying for income taxes, homeowner's insurance, gasoline, mortgages, property taxes, and still putting bread on the table, this new "strengthening" of the flood insurance program is especially troublesome.

In Florida, taxpayers from Pensacola to Key West are flooding the hallways at county commission meetings and begging for tax relief -- and finding little if any help from elected officials. Now, FEMA says that in order to make the national flood insurance program actuarilly sound, it needs to increase its current premium income of $2-billion by at least sixfold. Sixfold. That's a nice way of saying they want to increase premiums by 600-percent.

Folks, I don't use this blogsite for political purposes. It's supposed to be about helping you buy and sell real estate in a more educated manner. But brother, don't you think its is about time that regular taxpayers let elected officials, government bureaucrats and greedy insurance executives know that people are fed up with price increases and that we have limited resources for paying all this stuff? At some point we need money for such minor items as food, clothing, shelter and to put something away for retirement.

Maybe we should point these facts out to the elite power structure who is seeking to rule our lives and take all our money. Now -- right now -- might be a good time to start. After all, I hear there's an election coming up in November.

For more infomation on real estate matters in Tampa Bay, visit my website at www.thestpeterealestatesite.com.

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What's Your Favorite Radio Station?

In my past life I was in the advertising agency business, ending my career in that field as president of a firm in Tampa, Florida. Nice work if you can get it.

Back in the day, we had an expression that basically said that everybody listened to the same radio station -- WIFM. You see, WIFM stood for What's Init For Me.

A few years ago, WIFM played all the songs that sellers wanted to hear. It played outlandishly high prices. It played low interest rates. It played buyers galore. It played low taxes. It played low insurance rates. It played that ever-popular hit, "Show Me A Speculator And His Money's Mine", over and over again. Of course, buyers hated WIFM because it never played any of their favorite tunes.

Today, there's been a programming change at WIFM. Now buyers love it, but sellers hate it. Just look at the playlist. The new hits are tunes like "Make An Offer And I'mYours", "Loads Of Inventory But Nobody Wants To Buy", "A Condo On Every Corner" and my personal favorite, "Where Have All The Flippers Gone?"

In addition to enjoying the new musical selection on WIFM, today's buyers seem to have learned a few other things from yesterday's programming. I think they've learned about gamesmanship that is revealing the mean, nasty, ugly side of real estate. In addition to negotiating lower prices, today's buyers are requesting unheard of concessions from sellers. I've heard where buyers are demanding (and obtaining) such things as forcing the seller to pay off the buyer's credit card debt, pay for moving expenses, pay for apartment rentals through the end of the lease period, sign over automobiles and boats as part of the home purchase, even have the seller pay for vacation cruises to Mexico. Lately, I've seen cases where sellers had to pay for buyer's property and flood insurance premiums for a year after closing, and pay for homeowner's association dues for a year.

To me, this is just a case of buyers taking advantage of a situation. Incentives to entice sales are one thing, but when buyers approach incentives as entitlements, well, that's something else again.

It's all part of that WIFM attitude that we used to joke about at the advertising agency. Unfortunately, buyers now feel that it is their way of getting even for a few years in which the station played tunes for sellers. In the long run -- and maybe in the short run -- this will not be to the advantage of buyers. Why? Real estate runs in cycles. Today's buyer's market may be a very short run and sellers may find themselves back on top before you know it. If WIFM switches its format again, buyers could once again be hearing tunes they really don't like. Remember, sellers still remember the words to that favorite golden-oldie "Looking Out For Number One".

Hey, it's just something to keep in mind.

To keep up to date on Tampa Bay real estate, continue to read this blog and visit my website at www.thestpeterealestatesite.com.

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Politicians Beware!

State House of Representatives. State Senate. Governor's office. City commissions. County commissions. School boards. Transit systems. Dog catchers and other bureaucrats. If I were in your shoes right now, I'd be very mindful of the words Samuel Adams wrote over two centuries ago ...

"It does not take a majority to prevail but rather an irate, tireless minority, keen on setting brush fires of freedom in the minds of men."

Right now, however, I think we have a MAJORITY who are irate, tireless and keen on setting a few brush fires about property tax policy. So, politicians beware!

I'm not on a crusade, but it is obvious that taxpayers have become fed up with high taxes in order to fund what are often obviously wasteful, useless government projects -- many of which benefit the few at the expense of the many. To be candid, if elected officials do not do something to bring real, appreciable, and immediate tax relief that can be measured in real dollars to property owners in Florida, they may be seeing their political careers go up in smoke as irate, tireless taxpayers set brush fires in the minds of voters from Pensacola to Key West.

At recent budget approval hearings in Pinellas County, the taxpayers spoke out against high taxes. The result? The County Commission sent the budgets back from whence they came and asked that fat be trimmed. The St. Petersburg City Council voted 5 to 3 not to cut a dime. The Pinellas County School Board did not cut a dime. The PSTA made some cuts, to their credit since fuel costs are skyrocketing. The County Commission cut some spending. In the end, about $36-million was cut from a budget of almost $2-billion. Chicken feed! My understanding is that the average non-homesteaded property owner will save about $100. Great! Now I can buy two tanks of gasoline!

Some good things did come out of those budget hearings. One of the best things was that politicians clearly understand the mind of the electorate and the seriousness of the problems. They also vowed to use zero-based budgetting techniques starting with next year's budget. Both are good things that might cause the taxes to go down in 2008 (remember, we were debating the 2007 budget at this year's meetings.)

One of the root causes of these tax problems is the Save Our Homes tax law. This law is causing taxes to be higher for new purchases and great inequities among properties in the same neighborhood. Frankly, it is helping to kill the real estate business in Florida. Every concerned citizen should be in contact with his representatives in Tallahassee about this terrible law with an eye toward getting it removed.

The only problem with repealing Save Our Homes is this: What will you replace it with?

Apparently, people are really upset. I know of an attorney in St. Petersburg who has filed a federal lawsuit seeking to have all property taxes declared unconstitutional based on the 14th Ammendment. I know of a doctor in St. Petersburg who is raising money to do something tax related, but I'm not quite certain he knows what he wants to do except lower the taxes. I know of a group on Clearwater Beach that is preparing the introduction of a California-style Proposition 15 (or 13 or whatever the number was). I know of another group that is working toward having all County government eliminated in favor of city governments saying the County government represents a duplication of effort with the cities. This is what Miami and Jacksonville did several years ago. Other people would probably be content with hurling a few eggs at their County Commissioner's house.

If you want to get involved, get involved. But before you do, I advise you to learn the facts and also understand the restrictions under which each level of government operates. Then, get involved early on in the proceedings. Don't wait until after decisions have been made to start asking questions and making suggestions. Get involved early in the decision-making process. And remember, every time you cut $1 out of the budget, somebody is going to be left with a reduction in services. When you put a human face on it, cuts get harder to make.

Nevertheless, like most of you, I want taxes reduced. Frankly, I can do with less government if it will save me a bunch of money while ensuring the continuation of property ownership rights as laid down in the United States Constitution. People who get hurt by this reduction in tax-based services will find private resources to help them meet their needs. If those private resources don't exist now, they will be created if enough need exists. That's the way this nation works.

I also want insurance rates reduced. Insurance rates are a matter of corporate greed combined with government ineptitude. That's just my opinion of course, and I'm probably oversimplifying the issue.

I also support bringing Santa Claus, the Easter Bunny and the Tooth Fairy back into the public school system. But more about those movements in another article.

As far as taxes go, well, I hope to see you at the voting booth.

To stay updated on the latest in local real estate, visit my website at www.thestpeterealestatesite.com.

Oh, special thanks to Ted Nohren and Scott Menne for bringing the quote from Samuel Adams to my attention. Now, those two guys are a couple of rabble-rousing activists!

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Some Good Advice For Home Sellers About Real Estate Commissions

Here's a story that was relayed to me recently by a real estate agent with whom I am acquainted. If you're selling a home, this is a good example of one of the key differences between selling your property with a full commission broker and using a discount broker or one of those cut-rate brokers.

My friend tells me that she was called in to talk to a couple about listing their house. The property had been on the market for six months with an agent who had given them a discount commission rate of 4%, then done nothing much more than put the property in the local MLS, put an ad in the local newspaper once, and placed a sign in the front yard. Naturally, the place did not sell, so the owner went shopping for a new agent.

As is her normal procedure, my friend presented a very comprehensive marketing agenda to promote the house and find a buyer willing to pay the highest price. The sellers reportedly loved the program and were very favorably impressed with the presentation until they asked what the selling commission would be. My friend responded that her commission rate was 7%. The seller was accustomed to paying a much lower rate and would not agree to pay the higher selling fee requested by my friend. So, they parted ways.

A few days later, as the story goes, the seller hired another agent who discounted the fee to 5%, but not before convincing the seller to reduce his price by $10,000. The original asking price on the property was $289,900, and my friend said she felt that was a good price for the house and did not intend to adjust it if she obtained the listing. So now the house is on the market for $279,900 with yet another agent who has discounted the commission.

Did the seller make a good move? Let's do the math. If the sellers had accepted the services of my friend, they would have paid a selling commission of $20,293 (7% of $289,900). The sellers have agreed to pay a selling commission with a discount broker of $13,995. So, their commission saving amounts to $6,298. And all they had to do to get that saving was reduce the value of their property by $10,000. Actually, they have a net loss at closing of $3,702.

Let's see, in order to save $6,298 in commissions, the seller had to cut the value of his property by $10,000, so he really has a net loss of $3,702. That's not something I would have done. How about you?

I've noticed something over the years -- and I have no evidence to back this up other than my own observations. When a seller hires a discount broker who will give him no appreciable marketing support for selling his house, the price of the house often seems lower than true market value. I guess that's because such agents find it easier to practically give property away than work hard to sell it for its true market value. I believe there are three reasons for this ...

1. The agents aren't any good. Possession of a real estate license does not mean the agent is good at selling real estate. Agents who aren't any good at selling real estate always seem to want to cut prices on property and are willing to cut commissions on selling fees just to get the listing. That's because they don't know how to do anything else but cut prices. They can't defend the value of the seller's property in a negotiation, but they can give the property away. They can't defend their own income when discussing the commission with the seller, so they choose to "buy the listing" by resorting to cutting their own fees. They can't give you a good marketing plan to attract buyers, so they just keep lowering the price until someone comes along and buys the house. What's sad is that this is all they know how to do. Sellers need to be careful of real estate sales people with these kinds of highly limited capabilities. Just like the example above, such agents will cost you money at the closing.
2. The agents don't do enough marketing. You get what you pay for. If you retain the services of a cut rate or discount real estate agent, you're going to get a cut rate or discounted marketing program. Marketing costs the agent money out of his personal pocket. Since the discounted selling fee means he is going to make less money, he will do less marketing. And what marketing he does do will probably be the least expensive and least effective kind. Look at it this way, when did you ever get full service at a discounted price for anything? What makes you think you'll get it from a discount real estate agent? That's just not reality.
3. The agents remove the incentive to sell your house. The commission you pay is almost always split between the listing broker and the buyer's broker. When the agent agrees to cut the commission, he is also cutting the commission for the buyer's agent. As a seller, this is like slitting your own throat with a dull knife. Slowly. Agents work solely on commission. When you reduce the amount of money the buyer's agent is going to make for selling your house, you take away the incentive to show your house. Showings are the life blood of a real estate transaction. When the commission is reduced, so are the showings. Hey, just because the listing agent is willing to reduce his commission does not mean the buyer's agent is willing to reduce his. When this happens, you get hurt because the buyer's agent simply won't show your house. Instead, he'll show his buyer other houses that offer a better financial incentive. Your house will sit unsold. That's how it works in real life.

I could go on and on about the disadvantages of using a discount or cut-rate real estate broker, but I won't. Suffice it to say that since real estate markets are softening nationwide, this is not the time to fool around with commissions.

If you're a seller, don't worry so much about how much the selling commission will be. Instead, ask yourself who is most likely to sell my house for the highest price in the shortest time?

The answer, my friend, will always be the agent who is going to do the most comprehensive marketing plan. And just like the example above, the way to net the most money from the sale of your property is to sell it for the highest price. The way to get the highest price is with the best marketing and realistic selling incentives. In other words, go with a full service, full commission market-based agent over a discounter. Financially, you'll be better off.

For more information on real estate matters in the Tampa Bay area, visit my website at www.thestpeterealestatesite.com.

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Real Estate Vulture Funds -- The Next Big Investment Idea?

Is now the time to invest in real estate? That's a hard question, but the answer might be to keep an eye out for a real estate-based vulture fund that allows small investors.

Vulture funds are financial organizations that specialize in buying securities in distressed environments or buying equities that are in or nearly-in bankruptcy. Metophorically, they are like vultures circling a dying company, industry segment or even a third-world country with a lot of debt, then they swoop in and pick at the bones to see what's left that may be profitable.

Traditionally, vulture funds have been the domain of highly sophisticated, well-funded investors or institutional investors who are willing to assume sizeable risks in the hope of obtaining stunningly high returns. Vulture funds, as you may recall, bought up huge portions of the public debt in Argentina a few years ago, then made about a 20 percent profit during the Argentine ecomonic crises of 2002.

Vulture funds have not been the place for the average real estate investor who owns a few rental houses or an apartment building or two. Rather, it has been the place for really wealthy individuals and institutions who have millions to invest and can hold that investment position for years while circling a dying industry. To play in this game you have to be as patient as, well, a vulture.

In the last year or so, thousands of small, part-time investors dabbled in real estate. Many of these people are now facing financial problems caused by overextending their credit or they lack the needed funds to close on those pre-construction condo deals that can no longer be "flipped". Frankly, there's likely going to be a lot of distressed property on the market that can probably be purchased at or near it's original "pre-construction" price just to get the speculator clear of the property.

This is where a well-capitalized vulture fund might thrive. A vulture fund, operating similar to a mutual fund with investor money, might swoop down and start buying up these distressed properties in the hope of holding them for a year or two or three and then selling them for a profit which would be returned to their investors and shareholders.

Far fetched idea?

It's probably closer than you think.

Real estate analyst Jack McCabe has formed McCabe Acquisitions, LLC. His company is seeking accreditied investors of high net worth, international investors and other entities to participate in his vulture fund as non-managing members. The minimum investment is $5-million and investors should be prepared to hold the investment for up to ten years. McCabe's plan is to acquire blocks of condos -- or even entire condo projects. He is counting on buying from anxious sellers who will be willing to sell at a discount. After that, it's just a matter of time while the markets improve. History is on McCabe's side since real estate prices have historically appreciated over time. As humorist Will Rogers said many years ago, "Don't wait to buy real estate. Buy real estate and wait." Thus, McCabe's ten year waiting period for investors seems like a wise decision.

Here's my theory. If McCabe's vulture fund starts working for high dollar investors, someone else will likely come along with something similar for investors of more modest means -- perhaps even a Real Estate Investment Trust (REIT) of sorts that will function as a vulture fund for the rest of us. If so, this might be the next good way to become a real estate tycoon with one great advantage -- you won't have to worry about property management or tenant relations.

So, if you're searching for the next big real estate opportunity, you might want to talk to your investment advisor rather than your real estate broker. Ask him to keep an eye out for an affordable real estate-based vulture fund. If there isn't one out there now, I'm willing to bet there will be one soon, and it just might pay off handsomely.

For more information about real estate activity in the Tampa Bay area, please visit my website at www.thestpeterealestatesite.com.

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Where's Florida Growing?

I think most would agree that the best way to make some money in real estate is to buy property in an area where there is a lot of growth.

So, if you know where the growth is that might be a good spot to look for investment opportunities, right?

Here's the answer. Port St. Lucie and Cape Coral.

The U.S. Census Bureau just published the top five fastest growing cities with populations of 100,000 or more. In order, they are ...

1. Elk Grove, Calif.
2. North Las Vegas, Nev.
3. Port St. Lucie, Fla.
4. Gilbert, Ariz.
5. Cape Coral, Fla.

Did you notice, these cities are all in the south or west. So, "head south or west, young man!"

By the way, you might want to check out the website for the Census Bureau. It's at www.census.gov. And don't forget to check out my website at www.thestpeterealestatesite.com.

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Prediction: Prices Will Decline

The Wall Street Journal has reported that David Wyss, the well-respected chief economist at Standard & Poor's Corporation, has predicted that real estate prices will decline next year in areas that are currently overvalued. Overvalued areas include Florida, California and the northeastern United States. Other areas where Wyss expects price declines are places which are especially susceptible to economic weakness, such as the Great Lakes states.

So far, almost all of the "experts" are predicting that real estate prices are going to decline in Florida. A few of the predictions I've read call for some very slight price increases, but most of those predictions come from people who are associated with the real estate industry in some manner so their opinions must be considered suspect.

To get property sold today, sellers need to deal with the "new normal" of today's marketplace. Price the property realistically, not the way it would have been priced a year ago. Market it aggressively. Offer meaningful incentives to attract buyers and cement the transaction. Be prepared to negotiate with qualified buyers. Be patient.

For more information on the Tampa Bay real estate market, visit my website at www.thestpeterealestatesite.com.

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Holy Cow! Condos Sales Improved In August! But Not Much!

It's hard to believe, but there has been a small uptick in the condo market during August!

Overall, however, real estate's poor performance has continued with no real light visible to give us any vision in this deep, dark cave that we are groping our way through. Here are the facts ...

First, let's look at the Absorption Rate(AR). As you know, this is the inventory turn and it is determined by dividing the number of units sold during the month by the total number of listings in the MLS.

The AR for single family homes during August was 7.9%. That's a new record low. In August 2005 the AR was a healthy 43.2%.

The MLS showed that there were 9,758 single family homes for sale at the end of August. Last month, there were 9,549. At the end of August, 2005 there were only 2,832 single family homes in the MLS. Reflecting the record low AR, sales of single family homes dropped to only 771 sales in August, 2006. By comparison, 1,223 single family homes were sold in August of last year.

On a somewhat brighter side, condo sales seem to have picked up a little last month. There is still a glut of condos on the market, in my opinion, but a few actually were sold in August. Here are the condo facts ...

The AR for condos during August was 7.7%. Okay, that's nothing to write home about. But it is an increase from the lowly 4.8% AR at the end of July. Overall, however, it's a big drop from the nice 39.3% AR we enjoyed at the end of August, 2005.

The MLS shows that there were 6,130 condos for sale at the end of August, 2005. That's down a little from the 6,194 condos for sale in July. By comparison, there were only 1,813 condos for sale at the end of August, 2005. Now, in fairness, we have to remember that a lot of new condos were completed and went into the MLS during the last year, so the number of listings has swelled.

There were 474 condos sold in Pinellas County during August. That's up from 299 sold in July. So, you can see that there has been a bit of an upsurge. I don't think this will start a buying frenzy and create condo shortages, but it is nice to see some positive signs in the condo market. By comparison, some 712 condos were sold in August of 2005, so the market still appears depressed to me. But hey, perhaps it's improving. We'll have to wait and see.

Right now, I'm getting a lot of questions about where I think prices are going. Buyers want to know if they should buy now or wait for lower prices. Sellers want to know if they should list now, or wait for prices to go back up.

Frankly, I don't know for sure. I'm guessing that prices may come down a little due to the rules of supply-and-demand although that's speculative on my part and a lot of real estate gurus around the country are saying prices won't come down very much. Others are saying that there is now "pent-up demand" on the part of buyers and that once the floodgates of buying open that prices will be forced upward again as buyers purchase the available inventory of new and pre-owned property. If the "pentuppers" are right, I'd buy now. But if they're wrong, well ... Here's what I'm seeing:

• The median price for single family homes in Pinellas County during July and August of 2006 has been flat at $230,000 according to MLS data. Now, a year ago that same data showed a median price in the county of $262,600 for August, 2005. So, the median price has dropped $32,600 during the last 12 months for a single family home. How much of a price drop do buyers want? What can they reasonably expect? How much of a price reduction can sellers absorb, especially those who bought in the last year or two when prices were high? The answers are currently unknown.

• The median price for a condo fell in Pinellas County from $187,000 in July to $170,000 in August. That is a HUGE drop in median price in a 30-day period. There was also an uptick in condo sales which may have been associated with this median price reduction. Are the two factoids linked? I'm not sure. If they are, I would think that you should look for condo prices to continue to fall resulting in an increase in condo sales. More data is needed to make an accurate prediction on this matter.

Well, there you have it. The August report. Nothing real earth-shattering. Nothing you can hang your hat on and say "here's what's going to happen". Only this. There were real, definite, measurable reasons why the real estate market jumped up during the past five years. There are real, definite, measurable reasons why the real estate market is slowing today. I don't see any changes in the factors that are driving this slowdown of the real estate market, do you?

Have mortgage interest rates dropped significantly and are they projected to drop in the immediate future? No. In fact, just the opposite.

Are property taxes going down in Pinellas County? No. In fact, just the opposite.

Are homeowners and flood insurance premiums headed downward? No. In fact, just the opposite.

Is the stock market falling and driving investor dollars into real estate as an alternative investment? No. In fact, just the opposite.

Is there some new outside force or employment opportunity that is driving a population shift and creating a huge new housing demand for Pinellas County? No. In fact, just the opposite.

Are housing inventories decreasing and creating a housing shortage? No. In fact, just the opposite.

Are plane loads of real estate investors, developers, speculators and flippers landing in large numbers at Tampa International Airport with suitcases filled with property-buying cash like they did for the last few years? No. In fact, well by now you know the rest of the answer.

The key factors that drive real estate upticks are not in real estate's favor right now. They lined up in real estate's favor five years ago, but not today. That was then, this is now.

You know what, those key factors will line up in real estate's favor again someday. Real estate is cyclical. What goes around, comes around. Just be patient. Or as my late father used to say, "Keep the faith, baby."

For more information on real estate matters, visit my website at www.thestpeterealestatesite.com.

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A Nationwide Look-See At Housing

The Office of Federal Housing Enterprise Oversight (OFHEO) (gadzooks, what a crummy name!), is the agency that oversees the big mortgage finance companies Fannie Mae and Freddie Mac. They've just released some studies that indicate the housing market is substantially cooling. (I hope this did not come as shocking news to these government bureaucrats.)

To demonstrate its brilliance and timeliness in projecting market conditions, the agency report cited higher interest rates and rising inventories of homes for sale as possible factors in the slowdown. My, what earth-shattering news! Could it be that somebody in the OFHEO decided to go out and try to buy a house only to learn of these conditions?

"These data are a strong indication that the housing market is cooling in a very significant way," said OFHEO Director James B. Lockhart. "Indeed, the deceleration appears in almost every region of the country."

I think the data are a strong indication that Mr. Lockhart finally read that copy of the Wall Street Journal that has been sitting on his desk since January 11th.

Well, enough about Mr. Lockhart. Let's see what the report had to say ...

• The South Atlantic area -- Delaware, D.C., Maryland, Virginia, and Florida -- registered the biggest slowdown in prices since at least the early 1980's (yes, early 1980's). This region's rate of increase from the second quarter of 2005 to the same period in 2006 was 13.7%, far below the 17.4% rise posted from last year's first quarter to that of 2006.
• In New England the year-to-year rate dropped to 5.68% from 8.71%.
• In Arizona, housing prices showed the highest growth rate of all the states, about 24%.

Where are prices growing the fastest? It now appears that the metro areas in North Carolina, South Carolina and Washington state are the places where prices are increaseing the fastest right now. These areas are experiencing robust growth in population and employment, so that growth in value seems logical.

Okay, so what does this mean?

• Essentially, it means that the market is COOLING across much of the nation. COOLING does not mean prices are coming down. Clearly this data indicates that prices are still going up in most areas, but not as quickly as they have been in the past year or so.
• If you're a buyer, now might be a good time to purchase. It appears that waiting for prices to get lower is not a wise strategy as prices continue to rise, just at a slower rate.
• If you're a seller, you must accept the fact that your house is not appreciating like it did in the past couple of years and adjust your selling price to fit the new reality of today's market. Also, you need to be patient and let buyers come back into the market.
• If you're a government bureaucrat, thanks for catching up to what the rest of us have known about real estate for months and months, and for once again releasing a bunch of confusing statistics for us to wade through, and for wording the report in such a way that even people well-versed in bureaucrat-speak probably had difficulty understanding what you meant.

To keep up to date on real estate matters, keep reading this blog. For more info on real estate in the Tampa Bay area, visit my website at www.thestpeterealestatesite.com.

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Tips For Selling Condos In A Down Market

As you look around the Tampa Bay area, you'll see that there are thousands of condominiums on the market. These range from relatively modest properties designed for an easily affordable retirement to multi-thousand square foot penthouses overlooking the Gulf of Mexico for the super-rich.

Right now, they all have one thing in common: They're hard to sell.

It seems the market for condos in Tampa Bay -- and in many other markets around the country -- has gone from overheated to ice cold. The market is glutted with condos. In fact, during July the Pinellas Realtor Organization (PRO) reported that there were 6,194 condos for sale in the Multiple Listing Service but only 299 were sold during the month.

If you have a condo for sale, those numbers should scare the dickens out of you -- especially if you really need to get the place sold.

So, what can you do?

First, you need to be patient. The market has changed during the last year or so and there's nothing much you can do about a change in the marketplace except wait. Eventually the market will turn back in your favor.

Second, you need to hire a good real estate agent. Don't try to sell a condo on your own. In most condos, you're not even allowed to put up a sign or do any other kind of on-site advertising. Due to condo rules, you just don't have the marketing tools that a professional real estate agent will have. The agent can use the marketing tools at his disposal to find a buyer for your property. Your best bet is to take advantage of the marketing tools the agent has to offer, pay the commission and let the agent do all the work.

Third, you need to make sure your unit is priced right. If you price it too high, it will sit unsold. This is especially true if your unit is in a community that has several other units similar to yours that are currently for sale. The best thing to do is complete a thorough review of what similar units have sold for during the last six months. This will tell you what the market is like for your unit. Then, find out exactly what the asking price is for similar units in your complex. Price your unit just under the lowest priced unit that is currently for sale. This ensures that you have priced your unit properly and gives you a competitive advantage against other units like yours that are currently for sale.

But what else can you do as a condo seller?

I have always liked "buyer incentives" as a way to speed up sales in a slow market. Years ago I used to sell waterfront homes in a similarly slow market. Quite often the speedboat hanging on the davits in the back yard was thrown in as an added incentive. I've heard of cars being part of the sale, furniture, even a vacation cruise.

The same approach will help sales today, I'm sure. Plasma TV's, stereo systems, supermarket gift certificates for several months worth of food, all new kitchen appliances, you name it. They can all make the sale easier and faster.

Another great incentive is to offer to pay the buyer's homeowner's association fees for a year or two. If I was a condo buyer, I'd love that! If there's an assessement that might become the buyers to pay after closing, offer to pay it off. You could also offer to pay the buyer's home insurance for the first year of ownership. If you live in a flood zone, offer to pay the flood insurance premium for the first year.

There's no doubt that we've moved into a buyer's market. Don't be surprised if your buyer asks you to pay all or part of their closing costs. Go ahead and do it if that will make the sale and you have enough equity. It's another one of those really good incentives that get your condo sold.

One of the tried-and-true incentives that can really help cement a sale is the offer of a mortgage buy-down. By buying down the buyer's mortgage interest rate by a point or two, you may reduce the monthly payments and thereby make it possible for the buyer to afford your condo. Talk with the buyer's mortgage company about how you can make this happen.

Recently, I've been seeing a lot of condo sellers offering to pay a real estate agent bonus to sell the unit. Condo developers seem to be big on this incentive program. Frankly, I don't like real estate agent bonuses because they only benefit the agent, not the buyer. If you want to make the sale, you have to make the incentive available to the buyer, not to his agent. Offering a bonus to the agent will probably get your property shown a little more often, but it won't make the sale happen any faster because the incentive to buy is being offered to the wrong person. If you want to give an incentive to real estate agents, just increase the sales commission by a percentage point -- that will get their attention, believe me. That's my opinion anyway.

If you have a condo to sell, or if you're an agent with condo listings that need to move, I hope some of these ideas prove beneficial. Ultimately, however, it gets down to the same old story. Real estate that has been well maintained, is in a nice area, and is offered at a fair price will sell. Property that isn't, won't.

For more information on today's real estate world, visit my website at www.thestpeterealestatesite.com.

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Tampa Bay Has A Top Ten Beach -- Again

Dr. Stephen P. Leatherman, better known as Dr. Beach, has come up with his new list of the 10 best beaches in the United States and once again Pinellas County is included.

Caladesi Island State Park near Dunedin has come in at Number 2 on the rankings. High praise. I don't have the historical list in front of me, but it seems to me that Caladesi has been ranked among the top beaches for several years by Dr. Beach.

Also cracking the top ten list is Barefoot Beach Park in Bonita Springs Park, just south of us.

So, here's the entire Top Ten ...
1. Flemming Beach Park, Maui, Hawaii
2. Caladesi Island State Park, Dunedin, Florida
3. Ocracoke Island, Outer Banks, N.C.
4. Coopers Beach, Southampton, N.Y.
5. Hanalei Bay, Kauai, Hawaii
6. Main Beach, East Hampton, N.Y.
7. Coast Guard Beach, Cape Cod, Mass.
8. Coronado Beach, San Diego, Calif.
9. Homoa Beach, Maui, Hawaii
10. Barefoot Beach Park, Bonita Springs Park, Florida

For more info, check out www.drbeach.org. And for more information about real estate in the Tampa Bay area, visit my website, www.thestpeterealestatesite.com.

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Agents Losing Faith In Newspaper Advertising

An increasing number of real estate agents do not feel that newspaper advertising produces results, according to a new study released by Classified Intelligence LLC and Realty Verdana, Arial. According to the study, real estate agents buy newspaper advertising primarily to meet the expectations of property sellers.

Rather than using classified advertising space in newspapers, agents appear to be switching to free classified sites such as Craigslist and Google Base. More than half the agents who participated in the study said they were advertising listings on the free classified sites, and others indicated they were planning to reduce newspaper classified advertising in favor of the classified internet sites.

The Newspaper Association of America reports that real estate advertising showed substantial increases in the first quarter of 2006, but has shown sharp declines during the second quarter of the year.

My own advice is for real estate agents not to be too quick to cut newspaper advertising budgets in favor of on-line classified sites. Many baby-boomers still rely on newspapers for information and are daily readers. For many in this age group, newspaper classified advertising remains a viable source for obtaining information about properties on the market. This is the demographic segment most likely to pace an improvement of real estate markets nationwide, and reducing advertising spending to them may not be a wise marketing decision. Better to maintain some kind of presence within the local newspaper while at the same time expand your use of internet based classified sites. For awhile, at least, I think both the newspaper and the internet are needed to effectively market real estate.

For more information about real estate in the Tampa Bay area, visit my website at www.thestpeterealestatesite.com.

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