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/.
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/.
-30-
posted by Terry Ward at 4:49 AM
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