Sales Volume Up, Prices Drop

Sellers need to take note of this. The St. Petersburg Times reported in the December 11th edition that in Hillsborough County (Tampa), home sales rose 6 percent in November as compared to November of 2007. In November, 2007 there were 977 sales; in November, 2008 the sales figure rose to 1,036.

What sellers need to realize is that the average home price dropped with what the newspaper describes as a "thud" during the past year. The year-to-year price drop was 27 percent. It fell from an average of $250,282 down to $182,313.

The Times wrote that distressed properties -- short sales and foreclosure sales -- drove the sales volume increase provided they were priced low enough. According to the newspaper, 300 of the 1,036 sales were all cash transactions.

What does a 27 percent drop in value really look like? If you have a house for sale and it was properly priced last November for $300,000, it's market value today is likely to be about $219,000. That's a big drop, but that's where things are today. And, that's why we are seeing so many distress sales as mortgages are oftentimes higher than present market value.

Sellers should keep these statistics in mind. Overpricing a house in today's market ensures that it will not sell. There are buyers out there, but they are buying only the properties whose prices reflect current market values -- not last year's market value.

If you're a seller who has had your property on the market for a long time, my advice is to have your real estate agent or a certified appraiser develop an accurate market value for your property based on today's pricing structure. Then, re-price your property so it is competitive in today's market place, and make sure your agent is very aggressive in implementing a first quality marketing plan designed to bring maximum attention to your property from today's buyers.

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

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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/.

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