In Case You Missed It: March Was Terrible

The St. Petersburg Times today (April 25, 2007) reported that March was not such a hot month for local real estate. Or statewide real estate. Or national real estate, for that matter.

The Times wrote that sales of existing homes in Florida were off 28-percent in March as compared to March 2006. These are figures released by the Florida Association of Realtors. The median sales price fell 4-percent to $236,000.

In the Tampa Bay area, things were even worse. Sales of existing homes were off by 38 percent from March 2006 with a drop in the median price of 4-percent to $209,700.

The Times also reported that Florida's drop in sales were worse than those of the nation as a whole. Nationally, sales dropped only 11.3-percent in March compared to March, 2006.

Here's what's important. This decline in sales marked the eighth consecutive month of falling median prices. This is the longest period of price declines on record. The article goes on to say that this decline in sales and prices ends speculation that housing was beginning to make a comeback after last year's big declines. Apparently housing is still in trouble and we have not seen the bottom of this decline yet.

So, if you're a seller, you need to become more market-smart about your pricing if you hope to sell anytime soon. Seller's need to think in terms of "rock-bottom" figures if they intend to sell, not in terms of "return-on-investment". If you're a buyer, now may be the best time to purchase if you can qualify for a mortgage. There is a wide selection, seller's are getting desparate and mortgage rates are very reasonable. It's a great time to buy.

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

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Steps To Success

No matter what business you're in, no matter what stage in your career, everybody wants to be successful. Recently I heard some sage ideas about being successful in business and in life. Maybe these six ideas will help you ...

1. Show Up. You can't be successful in business or in life if you aren't in the game. Come on time, play hard and don't look back.

2. Tell The Truth. People may not always like what you have to say, but telling lies is just plain unethical and eventually the truth will be discovered -- then what will people think of you. Besides, if you always tell the truth you don't have to remember the lies.

3. Listen. You can learn a lot about challenges and opportunities just by listening to what the other fellow has to say. Then, act in a positive manner on what you heard.

4. Do Your Best. Half-hearted efforts get half-way results and are only worth half-pay.

5. Don't Dwell On Your Results. No matter if you succeed of fail, move on to the next opportunity taking with you the lessons learned from your last engagement. Many times I've said that in business and in life the most important word is "next". So move on to the next opportunity, the next challenge, the next transaction. Don't worry about past failures and don't brag about past successes.

6. Be An Honest Identifier. Identify your weaknesses and eliminate them. Identify your strengths and maximize them. 'Nuff said.

I hope these six little ideas are of benefit to you.

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March Sales Show Improvement

March sales figures for Pinellas County residential real estate show some improvement, although they are not really great. More importantly the sales figures for March show a month-by-month improvement in real estate sales for the first quarter of 2007. Let's take a look and see what's happening.

We will begin as always with the Absorption Rate (AR). The Absorption Rate is the inventory turn. It is determined by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service (MLS).

For single family homes, the March AR was 6.1 percent. Now, that's not really great but the figure is causing me to be much more positive about residential sales. The AR has moved up every month this year. In January it was 4.2, in February it was 5.4. So, it's improving by roughly 1 percent each month. Folks, that's a good sign.

How 'bout condos? Same thing, just on a smaller scale. The condo AR has moved up every month in the first quarter of 2007, from 2.8 in January to 3.5 in February, and now it's at 4.2 percent in March. Now, that's not a whole lot of sales, but at least it's moving in the proper direction.

At the end of March there were a total of 18,504 properties listed in the MLS. Listings continue to climb, and I suspect that there are many hidden listings out there. I say "hidden" because I believe there are a lot of people who have taken their properties off the market, or are waiting to put their house on the market until times get better or until they feel the market moves toward more of a seller's market.

For single family homes, there were 11,226 properties in the MLS during March. In February there were 11,003. Sales of single family homes picked up a bit in March. There were 687 single family homes sold, as compared to 594 in February. Since January saw only 448 single family sales, you can easily see that each month has represened an improvement in the gross number of sales, and that should be good news to sellers and to real estate agents in Pinellas County.

Condo listings stayed about the same in March as they were in February. At the end of March the MLS reported 7,278 condos for sale, while in February the number was 7,239. There were 7,043 on the market at the end of January, so condo listings have remained pretty flat for the first quarter of 2007. Sales, unfortunately, have also remained sluggish for condos. Only 309 condos were sold in March as compared to 254 sales in February and 196 in January. But here's the good thing: sales have gone up every month for condos for 2007 -- you gotta like that news!

So, what about pricing? Median prices seem to be pretty stable for single family homes. The median was an even $200,000 for March while it was at $198,000 for February. The median price for condos, however, continues to drop. It went down to $175,000 for March and was at $185,000 in February. The median price for condos has dropped every month this year.

So, does this good news constitute a recovery of the real estate market in Pinellas County? Who knows. But it does show that things might be starting to move in the right direction. We'll know more in a couple of months. I think a full recovery really depends on actions regarding property taxes and insurance, and so far progress on those two fronts seem sluggish. Keep your fingers crossed.

If you'd like more information about real estate matters in Pinellas County, visit my website at www.TheStPeteRealEstateSite.com.

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What's It Gonna Take To Sell Your House?

On Friday, April 6, 2007, the St. Petersburg Times ran an article on the front page headlined "Even a Realtor will tell you: Glut is huge". The subheadline stated that "The 'staggering' home inventory erases hope of a recovery in 2007".

Well, if I was trying to sell a house or condo, I'd be pretty discouraged after reading that article in the paper. I'd probably shrug my shoulders and ask "what's the point".

What's sad is that the Times has prepared a story that is absolutely true. Some people will say their story stresses the negative side of the problem, but it is actually just stating the reality of the marketplace as it is today. It uses the same facts that I have been reporting on this blogsite for months and comes to the same conclusion: there is a glut of real estate on the market and the end is not yet in sight.

For the first time ever the St. Petersburg Times has looked at the Absorption Rates and made the correct conclusions -- the market is crummy, the worst in many years, and shows no sign of improving. And no, Virginia, the market has not bottomed out yet. Prices will continue to drop, because in a dynamic and free economy that's what happens when there is an oversupply. Remember, that's Econ 101.

What the Times is not telling readers is that even in this down market, some properties are being sold. Not many, but some.

So, you may ask, what does it take to get a house sold today. Well, here's what I think ...

1. Make Your Property The Best It Can Be. Economists will tell you that anytime there is an oversupply of any product, only the best gets sold. Right now, there are more cars in the United States than licensed drivers. It's been that way for years, did you know that? Yet new cars keep getting sold. Why? Because car manufacturers keep making new cars better every year. Call it planned obsolescence. Call it re-engineering. Call it anything you like, but every year a new crop of cars come out that are better (or different) in some way than the previously manufactured models. People will buy the new cars simply because they are believed to be better than the other ones.

I believe the same thing is true in selling real estate. You have to make your house better than other houses on the market. You have to use staging techniques so it is presented better than the cluttered house down the street. You have to re-landscape to give it more curb appeal. You have to update the kitchen and bathrooms to make it appealing to today's younger and more demanding buyers. You need to paint it, put on a new roof, update the electrical panel, and do all the things that make it shine like the chrome on a new car. If you don't, it's gonna sit for a long time and when a buyer comes along you're going to get below-average offers.

2. Make Your Property The Best Value. The St. Petersburg Times reports that buyers are currently content to sit on the sidelines waiting for prices to drop. They don't want to buy a property and watch it lose value while the market continues to "adjust". You can't blame a buyer for thinking that way, although it is kind of short-sighted.

Given that attitude among buyers, it behooves a motivated seller to make his property the best value he can. After you've taken the actions outlined in step one, price your property so it is the lowest priced house in the neighborhood among comparable properties. Find out the prices for every comparable home in the area and put a price on your property that is just under the next lowest price. If the lowest current price for a house similar to yours is, say, $335,000, put your house on the market at $330,000 for example. That's good pricing stratgey, and good marketing strategy.

I know of a condominium community on Tierra Verde that has a lot of units for sale right now -- most of them vacant. Every time somebody lowers their price, everybody lowers their price. They seem to be doing it in $5,000 bites. It's like an old-fashioned price war, execpt we're selling condos instead of gasoline.

3. Get Sophisticated With Your Marketing. When the market was hot a couple of years ago, you could plant a sign in the front yard, place an ad in the paper, put the property in the MLS system and watch offers come pouring in. Ah, those were the days. But they are gone, man, long gone.

Today, you need to recognize that without high-level marketing your property is not going to get enough exposure among the few remaining buyers and their real estate agents to attract any showings.

If you're a FSBO I'm going to point out something important to you. Most likely you don't have the marketing tools to call any real attention to your property, at least not enough attention to find a buyer in today's buyer-thin market. Buyers are coming here from foreign countries and already know about properties for sale. How? The internet. About 80% of today's buyers search the internet for real estate before they talk to a real estate agent. If you're a FSBO and you don't have a website or are not included on one of the top sites like Realtor.com, well, you're just not getting enough of the right kind of exposure. If you're selling high dollar real estate over $750,000 you need special marketing designed to be seen by the world's wealthy. Simple as that. Some real estate agents can give you that kind of marketing exposure, some can't. Find one who can and hire him (or her) to sell your property. Otherwise, you're just fooling yourself about your chances of ever selling in today's market because you're leaving it to luck.

4. Negotiate Every Offer. "That offer is so low I won't even counter it"! How many times have I heard a seller say that? Well, in this market you better forget about your pride and toughen your hide. Negotiate every offer that comes in. Frankly, the first offer may be the only offer you get for a long, long time and you better take maximum advantage of it. Never let an offer go by without some kind of counter. Never.

5. Make Concessions. Be ready to make concessions to buyers. Most likely, they are going to ask for them anyway, so you might as well be prepared to pay for things like closing costs, carpet allowances, seller financing, tax allowances, insurance payments, maintenance fees, assessments, moving expenses and the like. I've even heard of buyers demanding and getting boats, cars, club memberships and other things from sellers just to make the deal happen. So don't be surprised if these kind of things crop up in the offer.

In no particular order, here are some other things to keep in mind since they have a bearing on selling your house. First, it looks to me like the higher the price the softer the market. Keep that in mind when you are putting a price on your property.

Second, don't be fixated with making top dollar on the sale of your home. Property is depreciating now, so the market is not going to let you get absolutely the highest price. The market has not yet "bottomed out" in my opinion, and I look for prices to get lower.

Third, if you bought the property in 2004 or 2005 and want to sell it now, you're probably in trouble. You bought at the top of the market and now you have to sell when prices are declining. These short-term sales mean you are treating real estate like a commodity and sometimes commodity prices get drpressed quickly and remain depressed for a prolonged period. Eventually, however, they come back. So, show some patience. You may have to ride out the cycle.

Last year I sold two apartment buildings that I owned. I did it by doing all the things I've just outlined. I remodeled wear-worn apartments, painted inside and out, put on new roofs, re-did my landscaping, made concessions on insurance premiums and lowered my prices on both buildings several times. I advertised until I was blue in the face, made counter-offers, and made certain my buildings were the best in town at that price. After months of work I managed to sell both of them and made a tidy profit. I was fortunate. I'm sure that if sellers follow the advice I've just given, and be patient, they'll successfully sell their property.

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

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House Offers Should Not Be Arbitrarily Set By Buyers

Today, the market is flooded with houses for sale. There are over 20,000 properties for sale in the Multiple Listing Services in Pinellas County right now. Many experts in the field have said that sellers are going to have to reduce asking prices in order to entice buyers to make offers on these properties. The general feeling among real estate professionals is that sellers need to get much more realistic about their asking prices if they are going to have much success in selling their property.

The thing is, buyers need to start getting more realistic about their offers as well. Too often, buyers are making offers that are based on "feel" or "take-it-or-leave-it" attitudes.

Offers to purchase should not be arbitrarily set, but should be based on verifiable data supplied to the buyer by his or her real estate agent.

One of Pinellas County's premier buyer agents is Debbie Deeb of Tourtelot Brothers in St. Petersburg, Florida. Debbie has specialized in representing buyers for many years, has been stunningly successful in her real estate career, and has some unique viewpoints on how buyers should formulate their offers. I asked Debbie to share some of her thoughts on how buyers in today's market should formulate values for their offers. Here's what Debbie Deeb suggests ...

The first thing Debbie points out is that all property has a value range. A buyer's offer must be within the property's value range. The range is based on overall values for similar properties in the immediate area of the property being sold. A buyer must determine if the property they are looking at falls into one of three categories within the value range -- high value, average value or low value -- for the area or subdivision. When making this determiniation, the buyer should consider such things as the property's square footage, amenities, location within the neighborhood and overall condition. Determining this value range should be done through an analysis of sold prices for similar homes and the current asking prices for properties on the market.

This value range is, essentially, a Comparative Market Analysis of the house prepared by the buyer's agent. It is based on current and historical data and an analysis of the property's condition. Essentially, this is the same type of thing that is done by a listing agent when working for the seller, but this time the analysis is done on behalf of the buyer in order to bring the property within a value range for the buyer.

"Property is worth what somebody is willing to pay for it," said Debbie. "But setting value is not an exact science, even for appraisers. A buyer should put a house within a value range and make an offer within that range."

Once the value range has been determined, the buyer should make an offer and be ready to negotiate further with the seller. If the buyer's offer is too low on the value range scale, the seller may be so insulted that they do not want to have further discussions with the buyer. When this happens, the buyer runs the risk of losing the house. "Even in this market, if you go too far below what the property is worth you run the risk of insulting the seller and losing the house you really want. Buyers need to weigh the risks of a low offer, especially if they really want the house, versus what is to be gained by making a legitimate offer within the property's value range."

Debbie also points out that property condition can be a very tricky point in determining value range and making an acceptable offer. "What a buyer wants to do to a house to modernize it and bring it up to 'their' standards has little to do with the value of the house," said Debbie. "Once you determine the value range, you can not say I want to do $50,000-worth of remodeling, so I'm going to subtract $50,000 from my offer." A buyer who does this is really telling the seller that they want the seller to pay for all the remodeling costs. Sellers just aren't going to do that.

Debbie stresses that if the house is within a legitimate value range in its asking price, arbitrarily cutting the price will probably result in a rejected offer. "There are some very good listing agents in the marketplace right now who help sellers price their properties within the correct value range. A buyer has to know if the house is priced correctly -- within the proper value range -- before they start arbitrarily reducing their offer."

"No one knowingly sells their house for less than it is worth, even in today's market," said Debbie. "You can not expect to successfully buy a property by making an offer outside of the proper value range."

Finally, Debbie suggest that all buyers retain the services of a professional buyer's agent. She points out that the market is changing rapidly now, and that the rules and regulations associated with buying property change almost daily. Going it alone is not a smart thing to do. "It doesn't matter how many houses you have bought and sold, only an experienced agent can help you with the challenges and opportunities that come up in a real estate transaction," said Debbie. "In this market, there are things happening that a buyer may have never encountered or even heard of in the past. Their best protection is to hire an experienced buyer's broker."

Thanks Debbie!

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

Take A Roser Park Home Tour April 7th

One of St. Petersburg's most interesting neighborhoods, Historic Roser Park, will hold its fifth Tour of Homes this Saturday, April 7th. The tour is sponsored by the Historic Roser Park Neighborhood Association. Seven homes will be available on the tour. Tickets can be purchased for $10 at 835 8th Ave. S.

If you are not familiar with Historic Roser Park, this is a perfect opportunity to spend a few hours viewing this hilly, tree-lined part of St. Petersburg. It is actually one of the city's first true neighborhoods with many homes dating back to the early days of the last century.

You can also visit the community's website at www.roserpark.net.

See you there!

Five Key Questions To Ask Before Hiring A Real Estate Agent To Sell Your Property

Having been in the real estate business since 1994, I've been interviewed by lots and lots of people about my credentials as an agent. Sometimes I thought the questions were appropriate and things they rightly should know. Sometimes I thought the questions really did not shed much light on my background or how I could help them.

There are probably a lot of questions a seller could ask a real estate agent, but essentially I think there are only five key things that need to be known. In no particular order, here are the questions ...

1. How long have you been in the real estate business in this area? Length of time in business tells you something about the success rate of the agent. Agents get paid by commission only. No salaries. In order to remain in the business, they need be successful in selling the properties they list. If they are not successful and not earning any commissions, they can't afford to stay in the real estate business for very long. (Now, if you run across an agent who is being supported by a spouse, an inheritance, a trust fund or has some other means of income, this could throw you off. But for the most part, agents have to be making a living in order to stay in the real estate business.) You also want to know if they've been in your local area for a long time, or if they are a newcomer. Generally, someone who has been in the area for a long time knows more about the area than someone who just moved here, and that could prove beneficial to you.

2. Are you a member of the local Board of Real Estate? If the agent is, you get a great advantage. First of all, that agent has access to the local Multiple Listing Service (MLS). If you're a seller, your property gets put on the MLS computer and then on other important web sites as well, like Realtor.com. This means any member-agent has information about your property and can sell it to any buyer with whom he is currently working. Plus your agent will have access to loads of training and educational programs available only to Board members. If the agent is not a member, none of these things are available and you will likely suffer the consequences.

3. Will you give me a written marketing plan to sell my house? Marketing is the key to successful selling in a down market like we have today. If your agent can not or will not present to you a comprehensive written marketing plan that outlines all the steps he will take to sell your house, hire somebody else. In fact, the marketing plan should be the primary way that you choose between agents and real estate companies. Frankly, I think you should call on three different real estate brokerages and interview three different agents, the determining factor being the marketing program. The more complete it is, the more likely you'll get your property sold for the highest price. (Of course, it is also important if you like the agent and feel like he or she is someone you can work with.)

4. In the last two to three years, what has been your ratio of listings to sales? This is a way to directly measure success. When the market was hot, everything that got listed generally got sold. But events in the last 18 months or so have changed that. Still, this ratio is a good indicator of success. If the numbers are very low, you might want to look for another agent to represent you. If you are talking to a very experienced agent who has been in the business for 10 years or more, they may have no idea what their overall ratio is because we just didn't keep those kind of stats way-back-when and it would be virtually impossible to reconstruct somebody's entire career. But events in the last three years should be easy enough to track, so ask. If they don't know the answer, ask them to get the data and call you back.

5. What percentage of your listings do you sell yourself? You do not want to work with an agent who sells 80 or 90 or 95 precent of his listings himself. What this generally means is that other real estate agents in town are not willing to work with him and won't sell his listings. So, he better sell a very high percentage of listings himself. He has to! Nobody else will work with him. Instead, you want an agent who sells about 10 to 15 percent of his own listings, and the rest are sold by other agents. This means other agents are willing to work with him to sell the listing, and clearly the more agents who will work to sell your house the better for you. The national average varies from year to year, but it appears that an agent sells his own listing about 1 time in 11, or about 9 percent of the time. Don't be fooled by people who say they sell huge percentages of their own listings. That's not really a good thing. (Now, if you are selling a luxury home costing millions of dollars, you may want an agent who sells a higher than average percentage of their luxury listings due to the nature of these kinds of sales. Luxury homes are often sold by the listing agent to someone to whom the agent is personally acquainted, so the percentages in this category are often higher.)

My feeling is that if you get the right answers to these five questions, you are probably dealing with a pretty darn good real estate agent. If you don't like the answers, talk to somebody else.

If you would like more information on real estate in the Tampa Bay area, visit my website at www.TheStPeteRealEstateSite.com.

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