MLS Inventory Tops 20,000 Total Units

My friend John Ringlespaugh of Tourtelot Brothers Real Estate in St. Petersburg, Florida likes to keep track of the number of listings available in the Pinellas County Multiple Listing Service. According to John's figures and what we learned in Economics 101, real estate prices should be falling -- and falling fast! Here's what John reported to me on Friday, February 23rd ...

Total Number Of Properties In the Pinellas MLS: 21,893
Residential Properties: 17,907
Multi-Family: 610
Rentals: 1,825
Vacant Land: 761
Commercial Listings: 790

Deduct the rental units from that tally sheet, and you have about 20,000 units for sale. That's a lot of available properties! If you're a residential buyer, you have mega-choices to make because the number of residential listings last Friday was nearing 18,000.

Here's how residential listings break down according to John Ringlespaugh's categories ...

Single Family Residences: 8,379
Condominiums: 7,230
Townhomes: 1,454
Condo Hotels: 193
Mobile Homes: 214
Others/Misc: 437

So, what does this mean?

If you're a buyer, it means you have a wide selection and you can now be selective. It means you can probably negotiate a lower price and better terms. It means you can probably get the seller to make consessions. It means you can take a little more time and be a little more reflective in what you're doing. It's a great time to be a buyer!

If you're a seller, this huge inventory means you have to become realistic about your pricing and the quality of your property. I'm going to give sellers Economics Rule 102: In an overly saturated market only the best items get sold. Today's market may not be overly saturated yet, but there sure is a glut of available property. If buyer's don't view your property as among the best of what they see, they won't buy it. It has to be the best value for the money, be in the best condition, be in the best neighborhood. You have to be willing to negotiate the best deal from the buyer's viewpoint. Sellers also need patience and a great marketing program. Mostly though, sellers need to start lowering their asking prices.

So, a tip of the hat to John Ringlespaugh for preparing this data. If you would like to know more about the real estate market in Tampa Bay, visit my website at www.TheStPeteRealEstateSite.com.

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Great Photos Help Property Sell Faster

Writing in the New York Times recently, Vivian S. Toy passed along some great tips about how photography can have a positive -- or negative -- impact on selling real estate. As an old advertising agency creative type, I'd like to pass along a few additional comments.

To begin with, everybody should undersand that we live in a very graphic age. These days, I think people are far more influenced by how something looks than what is written about it. After all, how many people actually read all those articles in National Geographic? Mostly we look at the photos and read the captions, don't we? Same is true with Playboy. C'mon, be honest.

Well, if you want to sell a property today in this highly graphic age, you better have some good photos of the property. Here are the tips Vivian S. Toy provided in the her article, and I quote her fully ...

• Insist on good photography equipment so the photos are sharp and colors aren't washed out
• Get rid of clutter in the home so the focus can be on the property, not the furniture and personal items
• Don't shoot at night. Natural daylight makes the home look bigger.
• Use flowers; they add color to the photos.
• Wide-angle lens are good unless they distort the view. Making an average living room look like a ballroom will only disappoint a potential buyer when she sees the real thing.

These are great tips, but I want to add a few more that are based on my years in the advertising agency business and my background doing a lot of real estate advertising for developers.

While Vivian Toy advises you not to shoot at night, I think that depends on the skill of the photographer. If you know how to make timed exposures at night, a home shot in the evening can be stunning and really adds to the appeal of the property. It also isolates the property so it is not competing with other distracting images -- clouds, cars, landscaping etc.

Shooting at night is especially effective if you have a lovely pool home -- turn on the pool lights and the interior lights of the property and take a timed exposure. It's absolutely gorgeous. Many top builders are having their model homes shot at night these days for brochures and internet advertising. I've done it for years when my advertising agency represented some of the area's top developers -- and it always turned out super! The only warning is this -- you have to know how to do it. If you don't know how to do it yourself, hire somebody who does.

Here's another old tip from the advertising agency people. If the product is ugly, don't show it.

From time to time you get a property that is really unattractive. MLS rules require a photo of the property, but if you've got one that doesn't look good, limit your photography to a single shot of something that is the property's best feature. Remember, in a graphic age the image presented can turn people off as fast as it can turn them on. Your goal is to get people to the house, not turn them off with a single photo. Find the best side and show only one shot.

The final point, don't buy more camera than you need if all you are going to do is take photos of houses and snapshots of your children. Those mega-pixel, interchangeable lens cameras with tons of built-in features are okay if you're a serious photographer, but they cost a bundle of money and you likely won't use even a third of what those cameras can do. My advice when it comes to buying camera technology is to keep it simple and inexpensive.

For more information on what's going on in the Tampa Bay real estate world, visit my website at www.TheStPeteRealEstateSite.com.

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Not The Way To Start The New Year

I'm almost at a loss for words -- a rare thing for me.

Real estate agents and title company people who I've been talking to in recent weeks are upbeat and assure me that things have turned around. They feel that real estate in Pinellas County is headed upward once again. Buyers are coming along and making offers, they say. Sellers are getting more realistic about prices and terms, I'm hearing. Closings are being scheduled and title insurance companies are getting busy once again, I'm told.

The numbers simply don't support the rhetoric.

January, my friends, was a disaster.

As usual, we'll start with an analysis of the absorption rate. For those of you who don't know, the absorption rate is actually the inventory turn. It is determined by dividing the number of units sold each month by the total number of MLS listings.

For single family homes in January 2007, the absorption rate was 4.2%. That's down from December's rate of 6.8%.

Condos fared even worse. The absorption rate for condos in Pinellas County was 2.8%, down from December's 4.1%.

These are the two worst absorption rates in years. In fact, I can't find absorption rates that have ever been lower. You can say "Sure, but the reason is because there is so much inventory on the market that it messes up the percentages." Yes, there may be some truth in that until you take a look at actual sales and listings and then you see that the actual raw numbers are also the worst we've had in years.

For example, at the end of January 2007 there were 17,664 properties listed for sale in the Pinellas MLS system. That's an increase of 1,344 properties over December. All that additional inventory came onto the market in a 31 day period. Out of all those properties for sale, only 644 properties were sold. By comparison, 936 properties were sold in December.

So, no matter how you want to massage the figures, January was a disaster. It was the worst month of sales since the records were published beginning in January 2001. You can look at the percentages in the absorption rate or you can look at the raw numbers, and you can only conclude that the so-called "market correction" is still underway in Pinellas County.

If you are the owner of a single family home in Pinellas County, you've got problems. At the end of January there were 10,621 single family properties for sale. That's an inventory increase of 745 properties over December. During January, only 448 houses were sold. What this means is that every single day in January an additional 24 homes were put on the market but only 14 were sold for a net inventory gain of 10 homes per day. Those 10 homes per day represent on-going competition to sellers.

Prices on single family homes? Well, it went down in January. The median price fell $2,500 from December and stood at $210,000 at the end of January.

How 'bout condos? Any good news there? Not really. But the condo market did get a bit more confusing.

At the end of January there were 7,043 condo units listed in the MLS. I frankly suspect there were more condos than that on the market because these are MLS numbers and some developers may not have their new units listed in the MLS program. But for the sake of this story, let's just use the MLS numbers as the entire universe of condos for sale. So, 7,043 units for sale. The most ever, by the way. Only 196 units were sold in January. The worst month since January 2001, by the way.

So the condo situation is that we have more units for sale than ever before, and fewer units sold in a month than ever before. What's odd is that the median price for condos went up from $156,000 in December to $200,000 in January. How did this happen? The median price for condos has been hanging around the mid-150's for months. Now it suddenly takes a big, big jump in January. It must be some kind of one-time-only statistical anamoly. Perhaps there were a few high dollar sales in January -- when you only sell 196 total units a few high dollar sales could drastically impact the numbers. I suspect that next month we'll see the median for condos greatly reduced. But it is odd, isn't it?

So much for January. Not such a hot month. I'm still hopeful that February will indeed be better like the folks at the title companies are saying.

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

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Now's The Time To Buy!

All the market factors seem to indicate that this is a great time to buy real estate as either a primary home or for long term appreciation.

Consider these factors ...

1. Mortgage interest rates are low. They may not be quite as low as they were a few years ago, but they are near historic lows. There is an ample supply of money in the financial markets and probably anybody with the ability to re-pay the loan can qualify for some kind of mortgage.

2. Insurance laws have changed. Florida's property insurance pricetags are probably going to come down thanks to actions taken in January during a special session of the legislature. It may take a few months before consumers see the reductions, which are estimated to be from 5 to 25 percent on insurance bills. While this is a matter that still bears watching, the insurance front seems to be looking better.

3. The selection is huge. I had lunch last week with David Heideman, one of the best known real estate professionals in the Tampa Bay area. Dave told me he was absolutely flabergasted at the number of properties on the market today. He's right, if you're a buyer the selection of properties available right now is huge -- over 16,000 in Pinellas County alone. You should take advantage of this great selection before others buy-up the inventory and get the property you want. Remember the old saying: "If you snooze, you lose."

4. Sellers are probably getting desperate. Some properties have been on the market for a year or more. The owners of those properties are probably pretty darn frustrated by now at the market inactivity related to their property. Now's the time to make that "ridiculously low offer". Who knows, it might be accepted in today's atmosphere. The worst the seller can say is "no".

5. Something's going to happen with taxes. I don't know what it will be, but the legislature is going to have to do something to reduce the tax burden on property owners in this state -- and they know it. It's going to come sooner rather than later.

Here's the other reason to buy now. If you wait, others will act. They will create a new buying frenzy that will deplete the available inventory. As the inventory is reduced, prices will go up. When that happens, you may find yourself looking at higher prices, reduced inventories and sellers who are not as motivated to negotiate on price. You'll end up paying more for the property. So, now's the time to make your offer on that dream home or income property that you plan on holding for long-term growth.

My advice? Act now. There may never be a better buyer's market than we have right now.

For more information on real estate, visit my website at www.TheStPeteRealEstateSite.com.

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Some Good Homeselling Ideas

The slowdown in the real estate market has a lot of sellers pretty darn discouraged. I can't blame them.

Fact is, the slowdown has a lot of real estate agents pretty darn discouraged too!

While surfing the internet recently, I ran across some ideas that may help sell your house in this slow market. First, let me give credit to Aimee Blanchette of the Star-Trubine who wrote the original article. She had a conversation with a professional home stager named Lori Matzke in Minneapolis which is where these ideas came from. These are some proactive ideas that home sellers can do right away -- and most are pretty easy and inexpensive.

1. Spruce up the outside. Paint the trim, columns, and your entrance door.
2. Clean the window screens.
3. Put fresh mulch in your flowerbeds and maybe a potted plant or two by the front door.
4. If you have a mirror or painting over a fireplace, remove it. Let buyers concentrate their attention on the fireplace.
5. Move furniture about 18 to 24 inches away from the walls. Believe it or not, this creates the illusion of added space.
6. Take all the magnets and other clutter off your refrigerator.
7. Use colorful spreads to liven-up bedrooms.
8. Clean or re-grout bathroom tiles.
9. If your bathroom vanity is outdated, replace it with a trendy pedestal sink. It will make your bathroom look larger and more up-to-date.
10. Since first impressions mean a lot in real estate, replace your old storm door with a new full-view door.

Here's another idea for selling property in a slow market. This comes from Sue McAllister writing in the San Jose Mercury News. Throw a party!

Apparently real estate agents and property owners in California have decided that a great way to get people into homes in a slow market is to throw a party. Invite the neighbors. Invite local real estate agents. You can even arrange for a "progressive party" in which several houses participate from 5:00 PM until 8:30 PM. Serve some wine and cheese at one house, light snacks at another, something more substantial at a third and perhaps some desert at a fourth. If people go see all houses on the progressive party, give them a gift certificate to a local restaurant or business as a way of saying thanks.

Real estate agents have been doing this kind of thing every Thursday for years; it's called a Broker's Open. It gets agents -- hopefully agents who represent buyers -- into the house so they can preview it and see if they think their buyers would be interested in it. This has proven to be a great idea, and it might work as a late afternoon concept for the general public as well.

Why not give these ideas a try if you're selling? They won't hurt and may help you sell your house this coming weekend!

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

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