July Real Estate Sales Still Stagnant
The St. Petersburg Times reported on Friday, August 10, 2007 that the real estate glut is easing up -- that the total number of properties for sale was lessening. The paper reported that listings, which had been over 50,000 properties in April in Pinellas, Pasco and Hillsborough counties, had now retreated to a mere 42,000 or so in July.
The paper then rightly reported that this drop in inventory has nothing much to do with an increase in sales. Rather it is the result of sellers who have gotten "sick of trying" to sell property and "turned to renting" thus removing the house from the listing pool, and that real estate agents have similarly grown sick of trying to sell overpriced property and are simply refusing to list properties that can't be sold because the seller is unrealistic about the market value. Frankly, I think the drop in listings is more the result of the former than the latter, but that's another storyline for a future blog.
I think we are seeing all of these issues in this month's sales figures for Pinellas County. As usual, we'll start with a quick look at the Absorption Rate (AR) which is determined by dividing the number of units sold in a month by the total number of listings in the Multiple Listing Service.
For single family homes, the July AR stood at 5.9%. That figure shows a decline in sales from June's 7.5%. So, a lower percentage of homes were sold from the listing inventory in July.
For condominiums, the July AR was at 3.7%. The July figure is even lower than June's 4.0% AR. Consequently, it can be said that the market for condos is still suffering.
Single family listings in July increased in Pinellas County. In July the number of homes in the MLS increased to 9,198 from June's listing figure of 9,111. This statistic, by the way, runs counter to the numbers reported in the Times article mentioned above, but they were reporting on the three-county region.
The number of condominiums in the MLS was down to 8,614 from June's 8,954.
If the real estate glut is easing up as the St. Petersburg Times' headline indicated, the reason is not because property is being sold. July's sales figures still show a very stagnant market as buyers still seem reluctant to re-enter the real estate marketplace.
In July, only 541 single family homes were sold. That's fewer sales than the 682 sales made in June. A bit of good news for sellers is that the median price increased to $225,000 which is the highest for the year so far.
Condo sales remain absolutely dismal. In July only 319 condos were sold in Pinellas County. That is even fewer than the 356 condo sales in June. As with single family homes, however, the median price increased from $159,000 to $175,000, indicating some slight upturn in overall selling price for condos -- which is a good thing!
As you look at these numbers, keep one important thing in mind. These are just the numbers reported through the MLS system. They are "hard numbers" and represent reportable listings and sales. What they do not report is what I call "market frustration".
Market frustration can be defined as the sum total of angry, disappointed, frightened, confused, desparate and helpless buyers and sellers who have just given up on buying and selling property. We can't measure market frustration. We can't put a number on it. How do you measure confusion? How do you score anger? I know one thing: there are a lot of people suffering market frustration right now that these MLS figures don't reflect.
If you're suffering market frustration as a buyer or a seller, I can only offer one bit of advice. Remember that real estate markets run in cycles. Right now, we are fighting through a period of market adjustment following rampant real estate speculation, tax uncertainty, insurance mayhem and a growing mortgage problem brought about by sub-prime lending. Eventually these problems will work themselves out and things will get back to normal. They always do.
How long will this peirod last? I don't know and neither does anybody else. Eventually things will return to normal.
If you would like more information about real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.
The paper then rightly reported that this drop in inventory has nothing much to do with an increase in sales. Rather it is the result of sellers who have gotten "sick of trying" to sell property and "turned to renting" thus removing the house from the listing pool, and that real estate agents have similarly grown sick of trying to sell overpriced property and are simply refusing to list properties that can't be sold because the seller is unrealistic about the market value. Frankly, I think the drop in listings is more the result of the former than the latter, but that's another storyline for a future blog.
I think we are seeing all of these issues in this month's sales figures for Pinellas County. As usual, we'll start with a quick look at the Absorption Rate (AR) which is determined by dividing the number of units sold in a month by the total number of listings in the Multiple Listing Service.
For single family homes, the July AR stood at 5.9%. That figure shows a decline in sales from June's 7.5%. So, a lower percentage of homes were sold from the listing inventory in July.
For condominiums, the July AR was at 3.7%. The July figure is even lower than June's 4.0% AR. Consequently, it can be said that the market for condos is still suffering.
Single family listings in July increased in Pinellas County. In July the number of homes in the MLS increased to 9,198 from June's listing figure of 9,111. This statistic, by the way, runs counter to the numbers reported in the Times article mentioned above, but they were reporting on the three-county region.
The number of condominiums in the MLS was down to 8,614 from June's 8,954.
If the real estate glut is easing up as the St. Petersburg Times' headline indicated, the reason is not because property is being sold. July's sales figures still show a very stagnant market as buyers still seem reluctant to re-enter the real estate marketplace.
In July, only 541 single family homes were sold. That's fewer sales than the 682 sales made in June. A bit of good news for sellers is that the median price increased to $225,000 which is the highest for the year so far.
Condo sales remain absolutely dismal. In July only 319 condos were sold in Pinellas County. That is even fewer than the 356 condo sales in June. As with single family homes, however, the median price increased from $159,000 to $175,000, indicating some slight upturn in overall selling price for condos -- which is a good thing!
As you look at these numbers, keep one important thing in mind. These are just the numbers reported through the MLS system. They are "hard numbers" and represent reportable listings and sales. What they do not report is what I call "market frustration".
Market frustration can be defined as the sum total of angry, disappointed, frightened, confused, desparate and helpless buyers and sellers who have just given up on buying and selling property. We can't measure market frustration. We can't put a number on it. How do you measure confusion? How do you score anger? I know one thing: there are a lot of people suffering market frustration right now that these MLS figures don't reflect.
If you're suffering market frustration as a buyer or a seller, I can only offer one bit of advice. Remember that real estate markets run in cycles. Right now, we are fighting through a period of market adjustment following rampant real estate speculation, tax uncertainty, insurance mayhem and a growing mortgage problem brought about by sub-prime lending. Eventually these problems will work themselves out and things will get back to normal. They always do.
How long will this peirod last? I don't know and neither does anybody else. Eventually things will return to normal.
If you would like more information about real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.
-30-
posted by Terry Ward at 5:19 AM
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