November Sales Indicate Now Is The Time To Buy
If I was in the market for a piece of real estate -- be it a single family home, condo, townhome or income property of some kind -- I guarantee you that I would be out there making some offers right now.
Why?
Because sales a sluggish, mortgage interest rates are low, and so many sellers are desperate.
The November sales figures for Pinellas County prove it.
As usual, we will begin with the Absorption Rate (AR), which is actually the inventory turn. It is determined by dividing the number of units sold in the month by the total number of listings for sale.
For single family homes, the AR for November fell to 5.0 percent. That's down a full percentage point from October and 1.2 percentage points from September. In other words, there's not a lot of buying activity right now.
It's even worse for condos. The AR for condominiums in Pinellas County for November stood at 3.4 percent. In October and September the AR was at 3.6 percent for each month.
What does this mean? Well, essentially, if you only turn 5 percent of your inventory every month, it will take you an average of 20 months to move all your inventory. If your inventory is a single family home, it means average time on market is 20 months. If it's a condo, your average time on market is going to be 28.5 months.
Single Family Data
During November, the MLS in Pinellas County had 8,539 houses listed for sale. That's a bit fewer than in October when 8,691 were listed.
Sales for November numbered 429 units. That's pretty bad. In October there were 523 sales, and in September there were 536 single family homes sold.
If you are a buyer, there's good news in the November statistics. The median price of a single family home fell to $159,900. A year ago in November of 2007 the median price in November was $185,000. That's a drop in median of 13.6 percent in 12 months.
The mean or average price looks even better if you are a buyer. The mean price for November of 2008 was $208,300 as compared to $281,900 from November of last year. That's a drop in average selling price of 26.1 percent. Buyers need to take advantage of these lower prices now!
Condo Data
It just doesn't seem like condos can get an even break.
There were 7,001 condos in the MLS at the end of November in Pinellas County. A month ago, there were 7,112. That's a lot of condos on the market!
For the month of November, only 235 condos were sold. In October, there were 255 condo sales and in September there were 251. So, it looks like condo sales may be slowing at a time when they usually increase. We'll have to watch and see how many condos are sold in December to see if we have some kind of trend here.
The prices for condos went about the same way as single family homes. That is, they went down. That is good news for condo buyers.
The median price for a condo at the end of November in Pinellas County was $125,500 as compared to November of last year when the median stood at $150,000. That's a drop in median of 16.8 percent.
The mean or average price for a condo in November of this year stood at $183,200. A year ago the mean was a much healthier $246,900. So, the average selling price for condos in Pinellas County has dropped 25.8 percent in the last twelve months.
The thing that these stats show is the big drop in mean prices for both single family homes and condos.
Why? I think a big part of the reason behind the price drops is that we are seeing so many foreclosures and short sales affecting average prices. Foreclosures and short sales are forcing market values down even faster than would normal market activity because they are being purchased while higher-priced non-distress properties sit on the market unsold. Buyers are gobbling up the lower priced distress properties and ignoring the higher priced non-distress properties.
If sellers of non-distress properties want to get their properties sold, they must adjust their prices downward to compete more favorably with the short sale and foreclosure properties. Simple as that.
In either case, if I was a buyer of either a single family home or condo, I'd be buying now.
For more information on real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.
Why?
Because sales a sluggish, mortgage interest rates are low, and so many sellers are desperate.
The November sales figures for Pinellas County prove it.
As usual, we will begin with the Absorption Rate (AR), which is actually the inventory turn. It is determined by dividing the number of units sold in the month by the total number of listings for sale.
For single family homes, the AR for November fell to 5.0 percent. That's down a full percentage point from October and 1.2 percentage points from September. In other words, there's not a lot of buying activity right now.
It's even worse for condos. The AR for condominiums in Pinellas County for November stood at 3.4 percent. In October and September the AR was at 3.6 percent for each month.
What does this mean? Well, essentially, if you only turn 5 percent of your inventory every month, it will take you an average of 20 months to move all your inventory. If your inventory is a single family home, it means average time on market is 20 months. If it's a condo, your average time on market is going to be 28.5 months.
Single Family Data
During November, the MLS in Pinellas County had 8,539 houses listed for sale. That's a bit fewer than in October when 8,691 were listed.
Sales for November numbered 429 units. That's pretty bad. In October there were 523 sales, and in September there were 536 single family homes sold.
If you are a buyer, there's good news in the November statistics. The median price of a single family home fell to $159,900. A year ago in November of 2007 the median price in November was $185,000. That's a drop in median of 13.6 percent in 12 months.
The mean or average price looks even better if you are a buyer. The mean price for November of 2008 was $208,300 as compared to $281,900 from November of last year. That's a drop in average selling price of 26.1 percent. Buyers need to take advantage of these lower prices now!
Condo Data
It just doesn't seem like condos can get an even break.
There were 7,001 condos in the MLS at the end of November in Pinellas County. A month ago, there were 7,112. That's a lot of condos on the market!
For the month of November, only 235 condos were sold. In October, there were 255 condo sales and in September there were 251. So, it looks like condo sales may be slowing at a time when they usually increase. We'll have to watch and see how many condos are sold in December to see if we have some kind of trend here.
The prices for condos went about the same way as single family homes. That is, they went down. That is good news for condo buyers.
The median price for a condo at the end of November in Pinellas County was $125,500 as compared to November of last year when the median stood at $150,000. That's a drop in median of 16.8 percent.
The mean or average price for a condo in November of this year stood at $183,200. A year ago the mean was a much healthier $246,900. So, the average selling price for condos in Pinellas County has dropped 25.8 percent in the last twelve months.
The thing that these stats show is the big drop in mean prices for both single family homes and condos.
Why? I think a big part of the reason behind the price drops is that we are seeing so many foreclosures and short sales affecting average prices. Foreclosures and short sales are forcing market values down even faster than would normal market activity because they are being purchased while higher-priced non-distress properties sit on the market unsold. Buyers are gobbling up the lower priced distress properties and ignoring the higher priced non-distress properties.
If sellers of non-distress properties want to get their properties sold, they must adjust their prices downward to compete more favorably with the short sale and foreclosure properties. Simple as that.
In either case, if I was a buyer of either a single family home or condo, I'd be buying now.
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 9:18 AM
1 Comments:
The statistics are interesting. However, there may be significant statistical noise skewing this information from the fact there are a disproportionate share of short sale properties listed vs. those that successfully sell. Short sales not only are they very challenging to get closed, most realtors are fatigued with anything involving short sales and have been avoiding them for some time. I have 5 short sale properties listed and after 1st qtr '08, showing started dropping off and nill since mid year notwithstanding continuing price reductions.
The reason being that "short sale" is code for the price, terms, conditions being unknown (and therefore costly to deal with).
Filtering out short sale litter may improve the absorbtion rate.
As an aside, PRO, FAR and NAR need to mitigate the managment of short sale listings that otherwise pollute our inventory. Perhaps a property cannot be listing in the MLS until a definitive acceptable price is established by the stakeholders. Otherwise, realtors are wasting their and their clients time unnecessarily.
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