It's Official: The Housing Market Has Bottomed Out
A new study from the University of Florida states that the housing market has finally bottomed out. So, it's official. It comes from the University of Florida's Bergstrom Center For Real Estate Studies, so it must be so. The University says prices have now bottomed out and that buyers need to act now because prices will start going up soon.
How did the University come to this conclusion? They took an on-going survey of real estate professionals who feel that housing prices are now "maintaining the same level as inflation", so prices are now in some kind of equilibrium.
In other words, this is just the opinion of people participating in a survey.
Other economists and business analysists question this conclusion from the University.
Among those questioning the report are people at Moody's who think real estate prices still have a way to fall this year before reaching the bottom. In January, the median price in the Tampa bay area for a single family home fell 7 percent and the supply of homes for sale continues to increase. In Pinellas and Hillsborough Counties alone there are over 34,000 existing homes on the market and the slow sales environment means many of these properties will continue to stay on the market for some time to come. This is more than twice the normal inventory level and will take over 16 months to sell at current sales levels. Equilibrium in the marketplace is generally considered to be a 6-month supply of homes, according to an economist from Moody's. Given this supply-and-demand situation, I think prices will drop even further in the coming months -- it's just basic economics.
There is not a real estate agent in the area who has not seen some market improvement in the last 30 days or so. Some prices have fallen and sellers seem ready to negotiate lower prices and are reducing prices on houses being marketed. But improvement does not mean the market has bottomed out. The asking prices for single family homes today are still too high in the opinion of many market experts and economists who have studied real estate in the Tampa Bay area.
When do I look for the market to bottom out? To be candid, I can't put a date on it. But I think it will reach bottom when the legislature finds some way to lower Florida property taxes and adjust the various inequities found in the state's property tax code, and when the insurance issues that have plagued this state far too long are corrected.
When those two items are addressed in Tallahassee, then I see buyers coming back into the market to take advantage of the large inventory levels and low mortgage interest rates. This may take place during this legislative session. When buyers come back into the marketplace and start writing loads of contracts, that's when the market will have bottomed out because there will be no reason for sellers to continue to lower prices further. It's as simple as that -- and that ain't now.
Regarding the University's proclamation, I feel that a mere report from the University of Florida proclaiming that the market has bottomed out is much the same as President Bush standing on the deck of an aircraft carrier proclaiming "mission accomplished" in Iraq several years ago. It just ain't so.
For more information on real estate in the Tampa Bay area, visit my website at www.TheStPeteRealEstateSite.com.
How did the University come to this conclusion? They took an on-going survey of real estate professionals who feel that housing prices are now "maintaining the same level as inflation", so prices are now in some kind of equilibrium.
In other words, this is just the opinion of people participating in a survey.
Other economists and business analysists question this conclusion from the University.
Among those questioning the report are people at Moody's who think real estate prices still have a way to fall this year before reaching the bottom. In January, the median price in the Tampa bay area for a single family home fell 7 percent and the supply of homes for sale continues to increase. In Pinellas and Hillsborough Counties alone there are over 34,000 existing homes on the market and the slow sales environment means many of these properties will continue to stay on the market for some time to come. This is more than twice the normal inventory level and will take over 16 months to sell at current sales levels. Equilibrium in the marketplace is generally considered to be a 6-month supply of homes, according to an economist from Moody's. Given this supply-and-demand situation, I think prices will drop even further in the coming months -- it's just basic economics.
There is not a real estate agent in the area who has not seen some market improvement in the last 30 days or so. Some prices have fallen and sellers seem ready to negotiate lower prices and are reducing prices on houses being marketed. But improvement does not mean the market has bottomed out. The asking prices for single family homes today are still too high in the opinion of many market experts and economists who have studied real estate in the Tampa Bay area.
When do I look for the market to bottom out? To be candid, I can't put a date on it. But I think it will reach bottom when the legislature finds some way to lower Florida property taxes and adjust the various inequities found in the state's property tax code, and when the insurance issues that have plagued this state far too long are corrected.
When those two items are addressed in Tallahassee, then I see buyers coming back into the market to take advantage of the large inventory levels and low mortgage interest rates. This may take place during this legislative session. When buyers come back into the marketplace and start writing loads of contracts, that's when the market will have bottomed out because there will be no reason for sellers to continue to lower prices further. It's as simple as that -- and that ain't now.
Regarding the University's proclamation, I feel that a mere report from the University of Florida proclaiming that the market has bottomed out is much the same as President Bush standing on the deck of an aircraft carrier proclaiming "mission accomplished" in Iraq several years ago. It just ain't so.
For more information on real estate in the Tampa Bay area, visit my website at www.TheStPeteRealEstateSite.com.
-30-
posted by Terry Ward at 5:24 AM
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