Where Are The Foreclosures?

The number of foreclosures nearly doubled in St. Petersburg in the last year. In April of 2006, there were only 156 foreclosures in the city. But that number increased to 303 in April, 2007. The causes of these foreclosures are many, but what it generally comes down to is that the owner could not or did not make the mortgage payments.

Where are all these foreclosures? Well, essentially they can be anywhere, but some zip codes seem to have more of them than others. The St. Petersburg Times recently published a list showing the geographic distribution of foreclosed properties. By zip code, here's what the Times reported ...

33705 -- 52

33711 -- 48

33712 -- 44

33713 -- 29

33714 -- 23

33707 -- 19

33709 -- 15

33702 -- 13

33710 -- 12

33701 -- 11

The source for this data is the Association of Community Organizations for Reform Now (ACORN).

By the way, the Times also reported that Tampa foreclosures jumped 44 percent in the last year, from 291 in April of 06 to 419 in April of 07. Zip code 33604 led the way with 53 foreclosures.

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

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The New Kid Sounds Okay To Me, So Far

For a couple of years now, I've been disagreeing with the opinions of David Lereah, the chief economist for the National Association of Realtors (NAR). It just seemed to me that Lereah was misreading and misinterpreting the facts and constantly painting an all-too-rosy picture of the real estate world in the United States, and he seemed especially uninformed about the Tampa Bay area housing market. Lereah even wrote a book about real estate -- Are You Missing The Real Estate Boom? -- Why Home Values and Other Real Estate Investments Will Climb Through The End Of The Decade. I wonder what decade he's writing about. Perhaps the ten years which ended in 2005.


Apparently NAR finally got fed-up with Lereah and dumped him in favor of Lawrence Yun. Yun spoke before the Greater Tampa Association of Realtors recently. I think Yun's comments are a lot more realistic than those of Lereah -- Yun feels that in the short term, real estate is going to be a bit painful, but in the long run it's still going to be a great investment and a great career. I don't think there is much doubt of that.

Yun puts much of the blame for falling real estate prices on the media's constant editorializing about the so-called "real estate bubble". If it were not for the fears such comments generate, Yun thinks declining home prices should have stimulated more sales this year. I agree. The media seems to over-sensationalize everything these days. Here are some of Yun's other thoughts ...

• The real measure of housing affordability is mortgage obligation compared to income, not property price compared to income. That kinda makes sense, doesn't it? It does to me. Yun said that much of the Tampa Bay area is about at the national average for mortgage obligation to income ratio. That's a good thing.
• Speculators are leaving the marketplace. I think that's a good thing and will help bring some equilibrium back to the local housing market and will tend to keep price increases more under control.
• Tampa Bay has strong job creation. Clearly, this is good for the local housing markets and business in general.
• Baby boomers are buying second homes. Reports I read indicate that there are millions of baby boomers who do not intend to spend their retirement years fighting the winters in upstate New York or anywhere else in the northeast and noth-central areas. Florida will attract its share of these people.
• Florida will reform its property tax problems and property insurance premiums. This process is currently underway and eventually the matters will be solved. Once the insurance issues are resolved, Yun has predicted a "sonic boom" in property sales -- and I agree totally, as long as mortgage rates and other demand factors remain positive.

Yun has suggested that the current large inventory of unsold homes in the Tampa Bay area -- in the neighborhood of 40,000 properties -- will resolve itself over time. Many homes will become rental units while other owners simply take their homes off the market awaiting better times. We have seen this drop in inventory during April -- just check the listing inventory from March to May, and you'll see a drop of several thousand single family homes. Those homes were not sold you know. They were taken off the market by owners fed-up with the current market conditions, just what Yun said would happen in his recent speech.

Frankly, I hope Yun keeps a realistic view of things and deals with the facts. We don't need another chief economist who is really a PR guy for the real estate industry. Grown-up people need to know the facts so that they can make realistic plans for the future. That's something I don't think Lereah ever appreciated with is rah-rah comments when everybody else knew the situation was anything but positive. Eventually it discredited Lereah and he began to look foolish. Lereah was all about spin. Let's hope Yun is all about facts.

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

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May Sales Results: Wake Me Up When Something Happens

I sure wish I had something earth-shattering to report for May, but if you look at the statistics it was simply a ho-hum, same-ol'-same-ol', boring month. A real snoozer, if ever there was one.

The Abosrption Rate (AR) reflects the mundane sales record posted in May. As you know, the Absorption Rate is the inventory turn. It is calculated by dividing the number of units sold in the month by the number of listings in the Multiple Listing Service (MLS).

For single family homes, the AR for May was 6.6%. In April it was 6.7%. In March it was 6.1%. So, nothing much is happening that points toward an improved real estate market for the last three months. Just for fun and to make a quick comparison, the single family home AR for May 2005 was 52.8%. Let's hear it for the good ol' days.

Not to be outdone on the snooze-meter, condos showed similarly boring figures. For May, the AR was 4.2%. It was 3.8% in April and 4.2% for March. In May 2005 it stood at a much more lively 51.5%.

During May there were 9,102 single family homes on the market. This is down a bit from April's 9,175 and way down from March's market high in listings of 11,226. I still maintain that the difference between March's listing count and where we are today is due to sellers simply taking properties off the market until they feel things have improved and they have a better chance of selling in a reasonable time and closer to their hoped-for price.

Sales figures tend to support my theory of properties being taken off the market. Sales are not strong enough to have warranted such a large reduction in listed properties. During May, only 602 single family homes were sold in Pinellas County, in April only 615 were sold, and in March just 687 sales were posted. Clearly this lackluster sales activity would not cause a drop of over 2,000 listings in 30 days from March to April. It has to be caused by fewer sellers keeping properties on the market. By the way, just for the fun of it I checked and sales in May of 2005 were 1,439 homes sold but there were only 2,727 properties listed at that time, thus the impressive AR for that month.

Condo listings decreased a little in May to 9,066 units listed. In April there had been 9,280 units listed which represented a big jump over the number of listings in March, 7,278. In May, 2005 there were only 1,453 condos listed.

Condo sales increased somewhat during May and have increased slowly each month. In May there were 378 condos sold, in April there were 355 sales and in March 309. At that rate of increase, I wonder how many months it will take to reach the May 2005 sales figure of 748 condo sales. Quite a long time, I think.

Median prices continued to bounce around for both single family homes and condos. For single family homes, the median for May was $206,000. It was $212,500 in April and an even $200,000 for March. Oh, by the way, the median price for May 2005 when the market was near its peak was $243,800.

The median price for condos dropped significantly for May as compared to April. In May it was $169,500, but in April it stood at $177,900. Quite a drop in 30 days. In March it was $175,000. In May 2005 the median was $155,000 -- so condos today are selling for more than they did back in the day.

All-in-all, a pretty slow month with not much to brag about unless you were one of the few owners who managed to get his property sold, or a real estate agent who somehow found the luck to earn a paycheck in May. Still, I am reminded that this is a "market correction" that has not yet run its course, that the legislature is still tweaking with property tax reforms, that the market has not yet "bottomed-out", that insurance premiums are still too high, that it's the hurricane season, that mortgage interest rates are rising, that sellers are getting desparate, that buyers are afraid prices will drop still lower, that we've overbuilt condos and still more are planned ... gadzooks, how does anybody predict what's going to happen in a market like this? Sure is exciting, though, isn't it?

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

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Buyers: Act Now! Mortgage Rates Rising!

If you're thinking about buying real estate, now is the time to lock-in your mortgage, select your property and make an offer.

If you wait, your mortgage rate is likely going to be higher.

Rates on 30-year mortgages rose for the fourth consecutive week, and reached their highest level in 10 months. Freddie Mac just reported that 30-year fixed rates averaged 6.53 percent this past week, up from 6.42 percent last week. This is the highest interest rate on this type of mortgage since the rate reached 6.55 percent last August. 15-year fixed rate mortgages, 5-year and 1-year adjustable rate mortgages (ARM's) also rose this past week.

The reasons why these interest rates go up and down are complicated, having to do with economic conditions, labor force and wages, and federal banking policy. Suffice it to say that it appears that mortgage interest rates are going up and may continue to go up over the next month or more. In a recent poll conducted by Bankrate.com, 58 percent of the experts said rates would continue to go up during the next four to six weeks. Only 16 percent of those polled thought rates would go down.

So, if you're a buyer now is the time to lock in your rate and make your purchase. Right now there is a huge selection of homes on the market, sellers are getting desparate to make a sale, and it is absolutely the best buyer's market in years. Act now before those mortgage rates move higher -- and maybe put your house financially out of reach.

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

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