April Sales Report: Very Interesting
Hmmm ... this is very interesting. Let's see if we can make some sense of it.
We'll begin as usual with the Abosorption Rate which, as you probably know by now, is determined by dividing the number of units sold in a month by the total number of listings.
In April, the Absorption Rate for single family homes in Pinellas County was 6.7%. That's an increase of 6/10ths of a percent over the rate for March. The April Absorption Rate for condominiums was down again. In April it was 3.8%, a decrease of 4/10ths of a percent from March.
If you went no further you could say that single family sales were up a little and condo sales were down a little. If you said that, however, you would be wrong. The Absorption Rate is misleading.
Single family sales -- despite a slight uptick in absorption -- were down in April. There were 9,175 single family listings in April. But in March, there were 11,226 listings. So there are now over 2,000 fewer listed single family homes than there were a month ago. Sales of single family homes also fell in April. In March there were 687 single family sales, but in April there were only 615. So despite fewer sales we had an increase in Absorption Rate because there were so many fewer properties listed. Remember, Abosrption Rate has to do with the total number of listed properties.
Condo listings skyrocketed in April to 9,280 units for sale on the MLS in Pinellas County. In March, there were 7,278 condo units in MLS. So, we had an increase of about 2,000 condos during April -- a big jump in inventory. Sales of condos in April were a total of 355 units, up a little from the 309 condo sales in March. This big jump in inventory probably had an adverse effect on the Absorption Rate for condo sales in April, although the rate still increased a little.
Just so you know, the median price for single family homes in April was $212,500, and the median for condos was $177,900. Both down for the year.
In total, there were 18,455 listed properties in April; 18,504 in March. There were 970 sales in April; 996 in March. I don't know how you define a flat market, but those number look pretty flat to me.
Here's my opinion on what all these numbers mean.
I think that many sellers of single family homes are fed up with trying to sell in a down market. When their listings expire from their agents, many of them are just not re-listing them again and are waiting for the market to improve at some point in the future before putting their property back on the market. This was the first month in many, many months that we had a large reduction in single family listings. I think it shows that sellers have become frustrated. Other sellers are taking their property and turning it into rental property just to get some kind of cash flow to help with the overall expenses of ownership. Look at the numbers! Single family listings dropped by over 2,000 units in a 30 day period and only 615 single family homes sold during that time. So, about 1,400 properties were simply taken off the market in April. It will be interesting to see if this trend continues in May and on into the summer.
Condos experienced just the opposite situation. The number of condos for sale jumped by almost 2,000 in the same 30 day period. Yet condo sales increased only slightly in April, with only 355 sales. Holy cow! If you own a condo it might take a long, long time for the market to take an interest in your unit. Condo sellers will need a lot of patience, a lot of high-level marketing, and they need to negotiate every offer in a serious manner because it might be the only offer they get for a very long time. No matter how you look at it, there is not much demand for condos today -- except for those that are brand new and just coming out of the ground. Those new ones seem to be getting some play, especially in overseas markets.
By the way, these numbers also tend to confirm my theory that the market has not "bottomed out" as yet. I believe that the market will bottom out when we have a large enough influx of buyers who are making offers that sellers accept. These then become the new level of selling prices for the market. When that happens we have an active market in which buyers will re-define real estate prices. Once re-defined by buyers, the market can be said to have "bottomed out". I don't think that time has come yet because -- as these figures tend to indicate -- there just are not many buyers making real estate purchases. I look for prices to continue to drop. Of course, if the legislature makes property taxes and insurance more affordable then housing becomes more affordable. That may help to re-define pricing quite quickly and the market will bottom out as a result of those legislative actions. The upcoming special session is very important to the future of real estate in Florida.
Well, that's it for April. A pretty flat month all in all.
For more information about real estate in Tampa Bay, visit my website at www.TheStPeteRealEstateSite.com.
We'll begin as usual with the Abosorption Rate which, as you probably know by now, is determined by dividing the number of units sold in a month by the total number of listings.
In April, the Absorption Rate for single family homes in Pinellas County was 6.7%. That's an increase of 6/10ths of a percent over the rate for March. The April Absorption Rate for condominiums was down again. In April it was 3.8%, a decrease of 4/10ths of a percent from March.
If you went no further you could say that single family sales were up a little and condo sales were down a little. If you said that, however, you would be wrong. The Absorption Rate is misleading.
Single family sales -- despite a slight uptick in absorption -- were down in April. There were 9,175 single family listings in April. But in March, there were 11,226 listings. So there are now over 2,000 fewer listed single family homes than there were a month ago. Sales of single family homes also fell in April. In March there were 687 single family sales, but in April there were only 615. So despite fewer sales we had an increase in Absorption Rate because there were so many fewer properties listed. Remember, Abosrption Rate has to do with the total number of listed properties.
Condo listings skyrocketed in April to 9,280 units for sale on the MLS in Pinellas County. In March, there were 7,278 condo units in MLS. So, we had an increase of about 2,000 condos during April -- a big jump in inventory. Sales of condos in April were a total of 355 units, up a little from the 309 condo sales in March. This big jump in inventory probably had an adverse effect on the Absorption Rate for condo sales in April, although the rate still increased a little.
Just so you know, the median price for single family homes in April was $212,500, and the median for condos was $177,900. Both down for the year.
In total, there were 18,455 listed properties in April; 18,504 in March. There were 970 sales in April; 996 in March. I don't know how you define a flat market, but those number look pretty flat to me.
Here's my opinion on what all these numbers mean.
I think that many sellers of single family homes are fed up with trying to sell in a down market. When their listings expire from their agents, many of them are just not re-listing them again and are waiting for the market to improve at some point in the future before putting their property back on the market. This was the first month in many, many months that we had a large reduction in single family listings. I think it shows that sellers have become frustrated. Other sellers are taking their property and turning it into rental property just to get some kind of cash flow to help with the overall expenses of ownership. Look at the numbers! Single family listings dropped by over 2,000 units in a 30 day period and only 615 single family homes sold during that time. So, about 1,400 properties were simply taken off the market in April. It will be interesting to see if this trend continues in May and on into the summer.
Condos experienced just the opposite situation. The number of condos for sale jumped by almost 2,000 in the same 30 day period. Yet condo sales increased only slightly in April, with only 355 sales. Holy cow! If you own a condo it might take a long, long time for the market to take an interest in your unit. Condo sellers will need a lot of patience, a lot of high-level marketing, and they need to negotiate every offer in a serious manner because it might be the only offer they get for a very long time. No matter how you look at it, there is not much demand for condos today -- except for those that are brand new and just coming out of the ground. Those new ones seem to be getting some play, especially in overseas markets.
By the way, these numbers also tend to confirm my theory that the market has not "bottomed out" as yet. I believe that the market will bottom out when we have a large enough influx of buyers who are making offers that sellers accept. These then become the new level of selling prices for the market. When that happens we have an active market in which buyers will re-define real estate prices. Once re-defined by buyers, the market can be said to have "bottomed out". I don't think that time has come yet because -- as these figures tend to indicate -- there just are not many buyers making real estate purchases. I look for prices to continue to drop. Of course, if the legislature makes property taxes and insurance more affordable then housing becomes more affordable. That may help to re-define pricing quite quickly and the market will bottom out as a result of those legislative actions. The upcoming special session is very important to the future of real estate in Florida.
Well, that's it for April. A pretty flat month all in all.
For more information about real estate in Tampa Bay, visit my website at www.TheStPeteRealEstateSite.com.
-30-
posted by Terry Ward at 3:07 AM
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