Three Years Later And There's No End In Sight
The great real estate downturn began three years ago, exactly.
In July, 2005, the Absorption Rate (AR) showed its first month of decline after having risen steadily to create mammoth gains in property sales and prices. During July of 2005, the AR for single family homes showed a drop, falling from June's 59.2-percent to July's 51.5-percent. That was when the bubble actually burst for single family residences in Pinellas County.
It had burst a few months earlier for condos, but few really noticed it. The end for condos began in May, 2005 when the AR fell from April's 62.2-percent to May's 51.5-percent.
Since then, things have gone down and stayed there for residential property in Pinellas County.
July's sales and pricing figures prove that there has been little, if any, real improvement during the past 36 months.
Let's begin our monthly analysis as usual with a look at July's AR, which is determined by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service.
For single family homes, the AR for July was 6.1-percent. That's a drop from June's 7.3-percent. For condos, the July AR was 4.3-percent, down a little from June's 4.5-percent.
Now, when you look at today's AR, go back and consider June 2005's AR of 59.2-percent and you will see how far real estate activity has fallen in the last three years. No wonder so many real estate sales people have left the field, and why so many who remain are struggling just to keep body and soul together.
Single Family Homes
For single family homes, the overall number of properties listed for sale in the MLS stayed about the same as it was in June. In July, there were 8,643 homes listed, while in June the figure stood at 8,617. Not much of a change there.
Sales, however, took a swan dive during July. Overall single family home sales dropped from June's 632 to only 529 in July, that's a drop of over 16-percent in overall sales volume in one month. Pretty discouraging.
The median price of single family homes also took it on the chin in July. The median fell to $180,000 for July '08 as compared to $225,000 for July 'o7. That's a drop of 20-percent. Sellers who fail to factor these kinds of pricing declines into their current asking prices are finding it virtually impossible to locate buyers.
I want to point out something important here so that everybody who reads this story understands the importance of these median pricing figures. Today's median prices are the same kinds of median pricing we saw during the summer and early fall of 2003. Repeat: 2003. Sellers who want to sell MUST come to grips with this pricing fact. Buyers don't care what you paid for the property in 2004 or 2005 or 2006. They are only going to make offers today as if it was 2003. Sellers and agents must price property accordingly or the house is likely going to sit unsold for months on end.
Condominium Facts
Condominium listings were down in July from June, but just a little bit. In June there were 7,293 condos for sale in the MLS, while in July there were 7,276.
The number of condos sold remained about the same month-to-month as well. In June there were 327 condos sold, while in July the number sold stood at 312 -- not much difference.
The median selling price of condos took a real nose dive when you compare the median price of July 2007 to July 2008. In July 2007, the median price was $175,000. In July 2008, it dropped down to only $152,00. That's a drop of 13.1-percent. Ouch.
So, let me make this point about condos: If you're trying to sell a condo, go up to the last things I wrote about single family homes and apply the exact same points to your condo. If you don't bring the prices in line with today's market, you are unlikely to find a buyer.
Well, there you have it. Three full years of this kind of market. Problem is, I can't really see an end to it any time soon. Even the gurus and prognosticators are saying more of the same for about another year -- but how do they really know? This was originally touted as a "market correction", remember that? Then it became a real estate problem. Now, it looks like a recession.
Funny how when problems are underestimated they just keep growing, isn't it.
For more information on real estate in the Tampa Bay area, please visit my website at http://www.thestpeterealestatesite.com/.
In July, 2005, the Absorption Rate (AR) showed its first month of decline after having risen steadily to create mammoth gains in property sales and prices. During July of 2005, the AR for single family homes showed a drop, falling from June's 59.2-percent to July's 51.5-percent. That was when the bubble actually burst for single family residences in Pinellas County.
It had burst a few months earlier for condos, but few really noticed it. The end for condos began in May, 2005 when the AR fell from April's 62.2-percent to May's 51.5-percent.
Since then, things have gone down and stayed there for residential property in Pinellas County.
July's sales and pricing figures prove that there has been little, if any, real improvement during the past 36 months.
Let's begin our monthly analysis as usual with a look at July's AR, which is determined by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service.
For single family homes, the AR for July was 6.1-percent. That's a drop from June's 7.3-percent. For condos, the July AR was 4.3-percent, down a little from June's 4.5-percent.
Now, when you look at today's AR, go back and consider June 2005's AR of 59.2-percent and you will see how far real estate activity has fallen in the last three years. No wonder so many real estate sales people have left the field, and why so many who remain are struggling just to keep body and soul together.
Single Family Homes
For single family homes, the overall number of properties listed for sale in the MLS stayed about the same as it was in June. In July, there were 8,643 homes listed, while in June the figure stood at 8,617. Not much of a change there.
Sales, however, took a swan dive during July. Overall single family home sales dropped from June's 632 to only 529 in July, that's a drop of over 16-percent in overall sales volume in one month. Pretty discouraging.
The median price of single family homes also took it on the chin in July. The median fell to $180,000 for July '08 as compared to $225,000 for July 'o7. That's a drop of 20-percent. Sellers who fail to factor these kinds of pricing declines into their current asking prices are finding it virtually impossible to locate buyers.
I want to point out something important here so that everybody who reads this story understands the importance of these median pricing figures. Today's median prices are the same kinds of median pricing we saw during the summer and early fall of 2003. Repeat: 2003. Sellers who want to sell MUST come to grips with this pricing fact. Buyers don't care what you paid for the property in 2004 or 2005 or 2006. They are only going to make offers today as if it was 2003. Sellers and agents must price property accordingly or the house is likely going to sit unsold for months on end.
Condominium Facts
Condominium listings were down in July from June, but just a little bit. In June there were 7,293 condos for sale in the MLS, while in July there were 7,276.
The number of condos sold remained about the same month-to-month as well. In June there were 327 condos sold, while in July the number sold stood at 312 -- not much difference.
The median selling price of condos took a real nose dive when you compare the median price of July 2007 to July 2008. In July 2007, the median price was $175,000. In July 2008, it dropped down to only $152,00. That's a drop of 13.1-percent. Ouch.
So, let me make this point about condos: If you're trying to sell a condo, go up to the last things I wrote about single family homes and apply the exact same points to your condo. If you don't bring the prices in line with today's market, you are unlikely to find a buyer.
Well, there you have it. Three full years of this kind of market. Problem is, I can't really see an end to it any time soon. Even the gurus and prognosticators are saying more of the same for about another year -- but how do they really know? This was originally touted as a "market correction", remember that? Then it became a real estate problem. Now, it looks like a recession.
Funny how when problems are underestimated they just keep growing, isn't it.
For more information on real estate in the Tampa Bay area, please visit my website at http://www.thestpeterealestatesite.com/.
-30-
posted by Terry Ward at 5:32 AM
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