Thorner Needs To Re-Think His Words About Realtors

I hate being a media critic. But those of you who know me understand that I spent 25 years in the media business before moving to real estate. So, sometimes I just can't help myself. I guess this is one of those times.

Ever since he began writing his (Un)Real Estate column in the St. Petersburg Times, I've been one of James Thorner's fans. He writes a great column that I enjoy reading. Sure, he's written some things that I don't agree with but that's okay. If we all agreed on everything this would be a pretty dull world.

But I have to tell you something, and I mean it from my heart as well as my brain. The column Thorner published today has crossed my line in the sand.

Thorner advises the real estate industry to appraise itself. Today's story, February 29, 2008, takes the unsubstantiated actions of a few bad-apples within the real estate industry and uses their activities to condemn an entire profession.

I suppose that the actions of a couple of crummy lawyers means all attorneys are low-lifes. A few bad doctors means every physician is a scum-bum. Find a crooked CPA and you've found an industry rampant with dishonesty, right James?

Thorner points out the activities of one "big-shot Clearwater Realtor" who single-handidly jacked-up property values all across the waterfront. Today, said agent's properties are selling for a third of their one-time value, or so writes James Thorner.

I think this is malarkey.

Do I think there is an agent in Clearwater who flimflammed his way into some high-dollar waterfront deals for himself at the expense of others? Sure, that's possible. And if he did, he should be allowed his day in court to see if what he did was illegal and/or unethical.

But I do not think it is possible for one agent to single-handidly bring up property values all across the waterfront. There have been way, way, way too many waterfront transactions made in the last few years for one person's activities to have an appreciable impact on the market value of waterfront real estate in Clearwater or anyplace else in Pinellas County. If Thorner understood how real estate values are set, he would know that.

The second case Thorner brings up is some real estate agents who will take condominium listings only if the seller will pay them "10 percent for their trouble".

Clearly, this is bad business but as far as I know there is nothing illegal about this approach. An agent or broker can charge whatever he wants for selling a listing, can set any kind of fees, and can compete any way he wants to in this market.

Frankly, I have a feeling this 10-percent thing is something being done by one rogue agent or by only one foolish brokerage who really doesn't want any additional condo listings for the time being. Of course, they could just say that at the present time they are no longer accepting condominiums in their book of business. But if they said that, Thorner would have lost one of his reasons for the real estate profession to engage in self-appraisal.

To be honest, I'm not sure this 10-percent demand ever really happened and Thorner does not give us any evidence that it took place. No names, dates or details were given in his story to substantiate his commentary. Could be just hearsay that Thorner is passing on to us as facts. So, I don't necessarily believe it.

Thorner's story goes on to bring up the antitrust suit against the National Association of Realtors regarding the Multiple Listing Service. C'mon James. Clearly you're just trying to pad your case against real estate agents with this factoid. This is old, old news and there's no reason to drag this up, except to try to further embarrass the real estate industry and the men and women who work in it but have nothing to do with such discussions.

And let me get this correct, James. Are you advising the readers of your column to no longer use real estate agents and do their real estate transactions on the internet through something called Pad4Pad, a barter system, in order to by-pass a real estate commission?

Hmmmm, your column is now starting to sound like the St. Pete Times of old when real estate writers never had anything nice to say about real estate agents and advised people to try to sell "For Sale By Owner" just to avoid that commission.

Too bad we don't have any statistics on how many readers of the Times took that advice and ended up in lawsuits with the potential buyers because neither side knew how to structure a legal real estate transaction in Florida.

Too bad we don't know how many additional years-on-market FSBO's spent trying to sell their property without the aid of an agent's marketing plan just because of the bad advice given out by the Times.

Too bad we don't know how many FSBO's mispriced their property and left money on the closing room table because the Times advised them not to hire a real estate professional and pay that terrible commission.

Too bad we don't know how much additional revenue flowed into the Times because running an ad in the newspaper is about the total extent of the marketing program that is available to most FSBO sellers.

But James, if you want to go back to a barter system for trying to sell real estate without an agent, well, be my guest. I think when I sell my property I'll use a real marketing plan and get hard cash.

You also accuse the real estate industry of conspiring "to bring about the current turmoil. Blaming reckless mortgage bankers and property speculators gets you only so far."

Well, you're right there James. It will get us only so far; but it gets us to where we need to be. If greed is the determining factor, speculators and mortgage brokers are the greediest of the bunch.

While we're handing out blame and talking about greed, we should also include the media who consistently sensationalized events in real estate in order to sell more papers and build higher rating points to justify rising advertising rates.

You see, James, the recent turmoil has a lot to do with reporters and columnists sensationalizing the profits to be made in real estate across this country. Those reports brought a huge number of people into the real estate marketplace, and their demand for property coupled with easy mortgage money drove those prices upward. So if you want to start naming co-conspirators in this real estate mess, certainly the media deserves to be mentioned.

Today, those same reporters and columnists are sensationalizing the losses to be suffered in real estate across the country, and that's one of the reasons prices are falling and sales are sluggish. The media has done a pretty darn good job of convincing people that this is not the time to buy property. In fact, the media is doing a pretty good job of convincing people that we're about to have a recession, that inflation is getting out of control, and that the dollar isn't worth a darn. What's next? Shall we have some good old-fashioned yellow journalism? Hey, Remember The Maine!

James, here's why real estate agents are not to blame for this mess and why you need to re-think the basic premise of your article:

Real estate agents respond to market conditions, they don't create them.

When prices were going up like crazy a few years ago, I often asked myself who was crazier? The sellers who set the high prices on real estate, or the buyers who actually agreed to pay them. I should add a third group: the mortgage companies who actually loaned the money on properties that clearly were over-valued.

Sorry, James, but you can't blame real estate agents for this. It was not the greed of real estate agents who drove those prices up, pal. Making us appear as greedy just doesn't wash when you know and really analyze the facts of the matter.

James, maybe you should do a little self-appraisal as to why you wrote this column. It doesn't sound to me like accurate news and honest opinion were upper-most on your mind.

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

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Here's What An Over-Supplied Market Looks Like

The media keeps reporting that the real estate market is over-saturated right now. That there are just too many properties on the market. It's a bad case of over-supply and under-demand.

But what does that really mean if you're trying to sell a house or condo?

It means you are probably going to spend a long time trying to sell your property.

How long?

Well, the Pinellas Realtor Organization has some statistics that might shed a little light on that subject. What they have done is to project the time it will take to clear out the present inventory based on current sales rates for various price categories. Now, this does not mean your house will take this long to sell. You might get lucky and sell your place the first day it is on the market. But what this shows is that given the current rate of sales within a specific price category, this is how long it will likely take to clear out that inventory at today's sales rates.

Let's start with single family homes ...

• Under $120,000 -- 7 months
• $120 - $150,000 -- 13 months
• $150 - $200,000 -- 18 months
• $200 - $250,000 -- 22 months
• $250 - $350,000 -- 20 months
• $350 - $500,000 -- 32 months
• $500 - $750,000 -- 33 months
• $750 - $1,000,000 -- 46 months
• Over $1,000,000 -- 88 months

Here's how things look for condo sellers ...

• Under $120,000 -- 17 months
• $120 - $150,000 -- 21 months
• $150 - $200,000 -- 21 months
• $200 - $250,000 -- 30 months
• $250 - $350,000 -- 33 months
• $350 - $500,000 -- 45 months
• $500 - $750,000 -- 58 months
• $750 - $1,000,000 -- 27 months
• Over $1,000,000 -- 20 months

So, let's say you've got a single family home that you want to sell for $475,000. You need to know that in Pinellas County there is a 32 month supply of homes in that price range.

If you want to sell your $245,000 condo, keep in mind that there is a 30 month supply of condos in that price range.

By the way, these figures are based on data that was accurate as of January 31, 2008.

So, how do you shorten that time?

Start with pricing your property at the lowest possible price among the competitive properties in your neighborhood or condo community. We live in a highly price sensitive marketplace where only the best values are being sold. You have to make your property a great value in order to attract buyer attention, get showings and see offers.

Second, make sure you have a highly aggressive marketing plan. It won't do you any good to have a well priced property -- a great value -- and not have buyers know your property is for sale. Make sure your real estate agent is using a wide variety of effective marketing tools to spread the word about your property.

Third, make sure your property is in tip-top condition. Buyers today want to make certain the property was well maintained by a caring owner. To get top dollar you have to be in top condition.

Finally, be patient. Things look like they are picking up a little. I'm starting to see more activity from buyers.

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

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It's Time To Tour Some Homes!

What I like about early spring is that many communities in the Tampa Bay area offer home tours. I just love looking at different homes in some of our area's great neighborhoods.

Two super tours are scheduled for March, and you'll want to reserve time now to go see both of them.

11th Annual Pass-a-Grille Home Tour: Having spent many great childhood days on Pass-a-Grill beach, this tour has always been near and dear to my heart. This tour is sponsored by the Pass-a-Grille Women's Club. A total of six homes are on this year's tour. The tour date is March 16th from 1 to 5 PM. Tickets are $20. For more info, go to http://www.pagwc.com/.

6th Annual Roser Park Tour of Homes: For those who don't know, Roser Park is the area south of Bayfront Hospital where the houses are built on the high banks of the creek -- it kinda reminds me of parts of San Francisco. This tour is sponsored by the Historic Roser Park Neighborhood Association, and they will have seven homes on the tour, and an outside museum. You can find free parking at the garage on Eighth Street and Seventh Avenue South. Tickets are $10. Tour day is March 22nd from 10 AM to 4 PM. For more info, go to http://www.roserpark.net/.

Happy touring!

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

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How Far Have Condo Prices Fallen?

The buyer on the other end of the line was calling me from Canada. Here's how the conversation went ...

Buyer: "I hear condo prices have fallen in St. Petersburg by 50 to 60 percent this winter. So I figure if I can get a good deal I'll buy something."

Me: "Well, sir, they have fallen and continue to fall. But I think 50 to 60 percent might be just a bit of an exageration. Where did you get that number?"

Buyer: "Oh, I dunno. It's just what I heard someplace."

Me: "Well, we are seeing good deals being made on condos here. But I don't think prices have fallen that much."

Buyer: "How far have they dropped? Can I buy a 2 bedroom unit on a golf course for 60-thousand dollars?"

Me: "U.S. or Canadian?"

That's pretty much an accurate conversation that took place this past week. When it was over, I had promised to e-mail the buyer some MLS sheets for him to review and then we could talk again in a few days.

But I asked myself, "how far has the average price dropped on condos?"

So, here's what I did. I picked a month at random: October 2007. No special reason for that month except that my birthday falls in October and that makes it one of the really important months of the year in my book.

I next went into the MLS and got a list of every condominium transaction that closed last October, except for those that were completed by a developer or deals that I suspected were not arms-length transactions. I went back to the original asking price of each unit and then looked up the actual selling price. Finally, I did the math on every transaction to determine the percentage of price reduction accepted by the average seller. I know, I have too much time on my hands. But then, we're talking condos and it really didn't take me that long to do those few calculations.

What I discovered was that sellers dropped their prices by an average of 16.86-percent. That is to say that for each $100,000 in asking price the property actually sold for $83,140 on average last October.

Remember, this is an AVERAGE, not a MEDIAN.

So, next time you're wondering how far condo prices have dropped, remember that 16.86-percent number from October. It's probably pretty close to real.

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

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2008 Starting Out On A Sour Note

I've been hearing a lot of real estate pundits singing a happier tune lately. The song they're singing is that real estate sales will pick up in 2008.

Well, 2008 seems to be getting off on a sour note. At least that's what the numbers show.

January was a real disaster in Pinellas County.

The Abosorption Rate (AR), which is determined by dividing the number of units sold by the total number of units in the Multiple Listing Service, was just terrible.

For January, the AR for single family homes fell to 3.8%. In December it was at 5.1%. I have information on AR's going back several years, and January 2008 sets a record for the worst inventory turn.

The AR for condominiums was unreal! For January it was 2.9%. In December the AR stood at 3.4%. January 2008's AR was the worst since January 2007 when it fell to 2.8%.

Pinellas Single Family Home Sales

If you're trying to sell a single family home in Pinellas County, things are not looking up for you. MLS is reporting that there are 8,848 properties on the market but during the entire month of January only 333 were sold. As far as I can tell, that dismal record of performance is the worst on record. I'm not saying it is the all-time worst but it is the worst I can find in the current charts and graphs posted by MLS for Pinellas County.

Just so you'll know, the median selling price fell in January. In December it was $185,000. At the end of January 2008 it was $177,000. Please remember, that is the median selling price, not the average.

Pinellas Condominiums

Doesn't anybody want condos anymore? Condos are a great lifestyle for both retired people and busy, on-the-go executives. I guess they may have lost their appeal. Of the 8,145 condos on the market in Pinellas County during January, only 237 were sold. That's the worst selling performance since January 2007 when only 196 condos were placed in the sold category.

The median selling price for condos also dropped in January as compared to December. January 2008 saw a median price of $168,000 as compared to December's $176,000.

I did see one good thing with condos in January. There was a bit of an uptick in sales for high-end units. Of the total sales for January, 6.8% of those sold were priced at $900,000 or more. That's an improvement over past months where luxury unit sales have been real flat.

Now, I want to tell you the honest to goodness truth here. Of late, I've been seeing the phones ringing a lot more in our offices. I've been getting more calls from potential buyers. Some of the buyer brokers I know have been getting busier and actually taking people out to look at property. I'm seeing more activity in the marketplace.

The question is, is this the beginning of a recovery or just a seasonal adjustment? I don't know. Only time will tell. I do, however, think more sellers have gotten the message about brining their asking prices down. And I think more potential buyers have gotten the message that this is a great time to buy.

Overall, January hit kind of a sour note. But maybe things are starting to sound a little better.

So, should we strike up the band? Probably not. But we might want to start tuning our instruments.

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

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