We're Number One! We're Number One!

Break out your foam #1 fingers and chant it with me everybody! We're Number One! We're Number One! We're Number One!

It's true! According to the S&P/Case-Shiller U.S. National Home Price Index released on Thursday, Tampa/St. Pete/Clearwater had the biggest home price drop among 20 cities for the year ended September, 2007.

Chant it again, just for fun ... We're Number One!

Tampa Bay's 11.1-percent price decline was more than twice the national average of 4.9-percent. We gave those other cities a good old-fashioned tail whippin', didn't we?

Chant it louder: WE'RE NUMBER ONE!

All this on top of the recent good news from Zillow.com that real estate prices here have dropped 13.1-percent over the same time period.

Let me hear youuuuuuuuu ... WE'RE NUMBER ONE!

All is not fun-n-games however. The study did report that home prices here have more than doubled since the year 2000. Of the cities studied by Case-Shiller, Charlotte, NC, Portland, OR, and Seattle saw prices increase in the last year. Those poor folks just don't know how to play the real estate game, do they?

Perhaps they need some coaching from some of the folks who made us the biggest losers in the nation. Coaches like ...

... All those tax assessors and elected officials who drove taxes up to unheard of levels thus making it difficult for many people to afford housing today. We should also congratulate them for their inability to come up with a workable way to reduce taxes.

... A tip of the coaching hat has to go to Mother Nature who brought us numerous hurricanes, thus giving greedy insurance companies the needed excuse to put premiums at equally unheard of levels while dropping coverage from thousands of homeowners and forcing the State of Florida to become an insurance company, a task for which it may not be well equipped.

... Let us not downplay the coaching efforts made by your friendly neighborhood mortgage bankers and brokers who never saw a loan application that couldn't qualify for some kind of mortgage. This coaching technique has resulted in today's flood of foreclosures in a market already oversaturated with property for sale, thus driving prices even lower.

... And last but not least, give a "Coach of the Year Award" to all those real estate speculators who were actually willing to pay those inflated prices for overvalued real estate -- their contribution to our being NUMBER ONE in value loss today can not be ignored. As a reward, just start running laps. We'll tell you when to stop.

So lemme hear it! WE'RE NUMBER ONE ... WE'RE NUMBER ONE ... WE'RE NUMBER ONE!

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

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It's Thanksgiving! I Guess We Should Be Thankful House Values Haven't Fallen Even Farther!

This Thanksgiving Day, as you give thanks for all the great and wonderful things in your life, pay no attention whatsoever to those articles in today's St. Petersburg Times that say your house is worth less now than it was last Thanksgiving.

Just pay no attention to those stories by the Associated Press and by James Thorner in the Business Section.

If you do happen to read those stories, do not -- repeat, do not -- slice your writsts instead of the turkey.

Thorner, whose columns I usually like very much by the way, has written that Tampa Bay area homes lost 13.1-percent of their value since September 30, 2006. Thorner got this bit of bad news from Zillow.com. Zillow gets its data by reviewing numbers from property appraisers and housing sales data. In 2006, the Seattle-based company had a complaint filed against it by the National Community Reinvestment Coalition (NCRC) for misleading consumers, lenders and real estate professionals and has been accused by NCRC for being accurate less than 30 percent of the time. Zillow claims to have taken positive steps to make its data more accurate. Let's hope so!

Nevertheless, considering the source, you have to question how accurate the 13.1-percent figure is. It could be spot-on. It could be way-off.

At any rate, using Zillow data, Thorner writes that if your property is on Clearwater Beach you really took it on the chin during the last year. Your property values dropped the most of any place in the Bay area, a whopping 20.8-percent for the year ended September 30, 2007. In other words, if you own one of those Gulf-front condos on Clearwater Beach that last Thanksgiving was valued at $1-million, today it is valued at less than $800,000.

Spring Hill was not far behind Clearwater Beach, dropping 18.4-percent. Indian Rocks Beach values dropped 17.4-percent, Port Richey 15.7-percent, and Tierra Verde 14.1-percent.

Zillow's data concludes, however, that we have not lost all the value gained during the last few years. Overall, Tampa Bay homes have increased in value by 10.5-percent since 2002.

This lovely bit of news from James Thorner was right next to an even larger story by the Associated Press that said Vermont and North Dakota were the only states to report real estate increases. 46 states reported sales decreases and two states did not report anything. The source for this wonderful Thanksgiving Day news was the National Association of Realtors (NAR). Reflecting the Zillow data, the NAR report said many parts of Florida and California saw median price drops of 10-percent or more.

The NAR data said prices in the middle part of America were "affordable and perhaps even undervalued". Still, the NAR said experts continue to predict declines in median value as housing market conditions continue to deteriorate. The states suffering the biggest sales drops in the third quarter of 2007 were Nevada (down 35-percent), and Florida (down 32-percent). Arizona and California were close behind in sales losses.

I already knew values were falling. I don't think I needed this kind of news to hit me on Thanksgiving when I'm supposed to be thankful for all the good things in my life. Since this is hardly time-sensitive data, couldn't the Times have run these stories on Friday?

I guess I should be thankful the news wasn't any worse. Happy Thanksgiving everybody!

If you'd like more info on real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.

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People Are Still Moving To Florida

Recently I attended my high school's 40th reunion. Yes, I'm that old, and all things considered I'm lucky to be that old.

It was great seeing all my old classmates. We talked about all kinds of things, but one subject kept coming up again and again -- leaving Florida and retiring to, well, just about anyplace that was not in Florida.

Everybody had their own reason for wanting to leave Florida, but mostly it seemed to focus on the high cost of living in this state, and how difficult retiring will be in Florida due to those costs. I suspect a lot of this was just cocktail talk, but some of these people are probably quite serious about leaving and others have already purchased retirement homes outside Florida. North Carolina and the northern parts of Georgia seem to be the most popular destinations for my old classmates. Who knows, our 50th reunion may have to be in Atlanta or perhaps someplace in North Carolina, like Bat Cave. I've always wanted to go to Bat Cave. Neat name.

The University of Florida has just released data indicating that Florida is still a big draw and that the population continues to grow, albiet not as fast as in the past. According to the University of Florida, Florida grew by 331,000 people between 2006 and 2007. That's less than the 431,000 who moved here between '05 and '06, but it's still a lot of new faces, thus proving that Florida is still a big draw for jobs, retirement and immigrants seeking a new life in the USA.

The University said that the slowdown in growth in Florida can be traced to slumping housing sales up north. That makes sense if you think about it. Most people can't buy a new home here until they sell the old house up north, so Florida's growth is slowing a little.

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

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The Flat Market Continued In October

Here's some earth-shattering news: The obviously flat real estate market stayed flat in October.

As always, we'll review the Pinellas County Absorption Rate (AR) for October. The AR is actually the inventory turn. It is determined by dividing the number of units sold in a month by the total number of units in the Multiple Listing Service (MLS).

The Pinellas County AR for single family homes in October was 5.2%. In September it was 4.8% and in August it was 5.9%. There just is not much overall activity. In fact, this was the third worst AR in Pinellas so far this year for single family homes.

Pinellas County condos shared pretty much the same fate. The AR for condos was 3.4% in October. In September it was 3.1% and in August it was 3.7%. This was also the third worst AR for condos in Pinellas County this year.

Single Family Info

The MLS is showing a total of 9,228 single family homes listed for sale in Pinellas County for the month of October. In September there were 9,233 and in August there were 9,141. It appears that the inventory is remaining fairly flat.

Single family sales in Pinellas were nothing to brag about. October sales stood at 484 units. In September there were 442 sales, and in August there were 540 single family sales. This sales activity is the third worst month so far this year.

Median prices went up significantly for October over September. The median price in October was $212,000 versus $199,900 for September. In August the median was $219,900. Remember, this is median, not average.

Condo Info

The condo sitiation remains really, really flat.

During October, the MLS shows that 8,270 condos were listed for sale. This is actually down from the two previous months' inventory. In September there were 8,527 and in August there were 8,464.

Now, don't get the idea that the reduced inventory is because condos have suddenly become hot and are selling like crazy. They aren't. October condo sales were only 283 units sold throughout Pinellas County. In September there were only 267 sales and in August there were 311 sales. In actual fact, October was the 4th worst month for condo sales this year in Pinellas according to the local MLS. Most likely the reduction in condo inventory is the result of sellers getting tired of trying to sell and placing their units into rental situations, thus removing them from the MLS inventory.

The median selling price on those condos that sold went up a little in October. The median price for sold units rose to $180,700 for October. In September, the median was $162,600, while in August it stood at $155,900. Again, remember that this is a median figure.

Well, there you have it. All in all, another flat month of sluggish sales. Buyers do not seem to understand that this is a fantastic time to get out there and make offers. The operative concept in that last sentence is "make offers". Buyers need to take the bull by the horns, inspect the available properties and make offers to sellers. In many cases, sellers today are highly motivated to sell their properties for virtually any reasonable price. In order to take advantage of that situation, buyers need to -- and here's that operative concept again -- make offers.

What I am seeing is that there are buyers out there. If you're a seller, that's good news. Those buyers are motivated and understand that this is possibly the best time to buy in the last few years. If you're a seller, you need to do your best to make your property the best value you can. In a market like this, only the best values get purchased.

If buyers make offers today, I'd almost guarantee that in three years they will be happy about their home purchase decision. If they don't make offers today, in three years they'll be kicking themselves.

For more information on real estate in Pinellas County, visit my website at http://www.thestpeterealestatesite.com/.

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Thorner's Asking The Right Question

You gotta like James Thorner's (Un)Real Estate column in the St. Petersburg Times. It's always interesting, always timely, and almost always has the right answers.

The column for Monday, November 5, gets right to the heart of the matter. Thorner asks if this is a good time to buy a house.

Thorner writes that real estate agents are saying "yes, it's a great time to buy", but points out that agents may have a vested interest in the answer.

So, Thorner goes to some other sources like Jan Hatzius, an economist at Goldman Sachs. Hatzius thinks Florida prices could drop another 30 to 40 percent and the slide could last another two years.

He goes to the S&P/Shiller-Case Home Price Index. The Index ranked Tampa as the worst nationally for home price decline, and the fall in home prices shows no sign of letting up.

Then he goes to Lawrence Yun, the newly appointed economist for the National Association of Realtors, who has predicted several poor months ahead.

Gadzooks! No wonder buyers are sitting on their hands and waiting for prices to fall even farther.

But here's the factor nobody seems to want to put into these discussions: What is the reason to buy the property?

If you are buying for quick investment -- as many people did in the last few years, hoping to put in a new kitchen, a bathroom, re-pave the driveway and then make a fast $100K -- this is probably not your best time to buy. I think those days are over for right now. No quick hits out there, are darn few anyway.

On the other hand, if you're buying to give your family a new home, this is probably a really good time to buy. If you're going to keep that house for five years or more, it's probably an excellent time to buy. What do you care if the "paper" price of the house drops a little in the next year or two? You aren't going to sell it. It's home. Five years from now, it will likely be worth more than you paid for it.

What if you're buying for a long-term investment, going to use the property as an income source and hold it for a long time. Well, you're in the same boat as our long-term home buyer. The property may lose value in the short run, but its value will increase in the long run.

So you see, trying to determine if this is a good time to buy depends largely on the motives and time frame of the buyer. In the long run, real estate values -- like the stock market, James -- have always gone up.

I'd be willing to bet that if you buy today, in three to five years you'll be thanking your real estate agent. If you don't buy today, in three to five years you'll be kicking yourself.

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

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Where To Look For A Great Commercial Investment

Normally in this blogsite I write about residential real estate matters. But something came across my internet space this morning that is really, really interesting and it has to do with commercial real estate, so I thought I'd pass it along to anybody who is so inclined.

The Urban Land Institute (ULI) has just released their annual report, "Emerging Trends In Real Estate". According to ULI, commercial real estate investors need to look toward metropolitan markets that position themselves as 24-hour cities with global pathways to international markets.

Tops among these kinds of metro markets is New York City. While prices for industrial and office space in NYC are at or near an all-time high, the weak U.S. dollar makes the prices very, very reasonable to foreign investors who, according to the report, are pouring and parking money into commercial Manhattan real estate like there's no tomorrow.

According to the ULI report, here's what to look for when sizing up a market for commercial/industrial investment ...

• A major international airport or shipping port
• Walkable residential neighborhoods
• A revitalized downtown area close to an urban hub
• Presence of corporate headquarters
• Highly educated workforce

The ULI report says the top sites to watch, in addition to NYC, are

• Seattle, Washington
• Washington, D.C.
• Los Angeles, CA
• San Francisco, CA -- where space with a view commands over $1,000 per square foot
• Boston, MA
• San Diego, CA
• Denver, CO

The report mentions second tier cities for commercial investment as well. Included in this list of smaller cities are three Florida locations: Orlando, Tampa and Jacksonville. What is odd to me is that Miami is not included in the ULI list. Is this just an oversight or does Miami lack something necessary to be a player in this game? Oh well.

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

When It Comes To Pricing A Home, Don't "Test" The Market

In this declining market, real estate agents have been advising home sellers not to "test" the market at a high price thinking they can bring the price down if they don't get any offers. Real estate agents have known for years that if you overprice a property at the beginning, it will languish for months and will ultimately sell for less than its true market value.

Now, there's more evidence validating the proof of this theory.

Philadelphia Daily News reporter Lynn Kathleen wrote on November 2nd about a New Jersey property appraiser who tracked the sales history of 4,500 homes in the fist six months of 2007. Just like the Tampa Bay area, much of New Jersey is faced with a declining real estate market and prices are adjusting downward.

The New Jersey study tracked sales of homes priced from $500,000 to about $700,000. Of homes that sold within one month of listing, the median asking price was $599,900 and the median sales price was $599,000. That's pretty darn close.

Of homes that were on the market for more than a month, the median asking price was $634,900, but the median selling price was only $585,000. Quite a disparity.

The study indicates that higher prices immediately turn off many buyers. In markets where prices are falling, these overpriced homes become even more overpriced with the passage of time. The longer these overpriced houses are on the market, the lower the median prices will become and eventually they will be sold for even less money as market values continue to soften.

Simply stated: In a declining market, an overpriced home becomes even more overpriced and harder to sell with the passage of time.

On the other hand, if homes are initially priced properly for the market -- or even a bit under market value -- it seems to attract immediate buyer attention. The study indicates that proper pricing assures buyers that they do not have to fear the continued fall of median prices since they did not overpay for the house. Thus properly priced houses sell faster and for more money.

"Overpricing extends days on the market and guarantees that you will sell your home for less in a declining market," according to the report which was prepared by Jeffrey Otteau, New Jersey-based appraiser and head of Otteau Valuation Group, Inc.

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

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