The Year Ended With Kind Of An Uptick
Facts are facts, and the fact is that December produced a year-end that kind of proves what economists and old-pro real estate agents have been saying for quite some time: As property prices go down, sales volume will go up.
Eventually, this increasing sales volume will significantly reduce the number of properties on the market, and then prices may start to move up again. I think that's how the recovery is going to look, and I predict that it will take a few years to reduce all this inventory and rebuild demand.
I think December gave us a preview of how the recovery is going to look.
The December Absorption Rate (AR) was up for both single family homes and condominiums. Not up a lot, but up! The AR, as you know, is determined by dividing the number of units sold in the month by the total number of units in the MLS.
For single family homes, the AR for December was 6.8-percent. In November it was 5.0-percent. That is a pretty significant jump. For condos, the AR for December was 4.2-percent. In November it was 3.4-percent. Again, a nice little jump which may show some market growth.
Single Family Homes Sales
The number of single family homes on the market decreased during December to 7,930 from November's 8,539. So, we are seeing a slight reduction in inventory at year's end.
We are also seeing an increase in the number of houses sold. In December, 536 single family homes were sold as compared to November's 429. Nice!
The median price for a single family home in December fell to $145,000 in Pinellas County. In December of 2007, the median was $184,900. That's a reduction in value of 21.6-percent December to December. Single family home median prices are now so low that they pre-date the current data charts, so prices are now pre-2003. Buyer's need to start buying now!
The data above is in-line with the theory that as prices go down, sales go up.
Condominium Sales
We all expect condo sales to start going up in December since it's the start of the tourist season along the west coast of Florida. True to form, condo sales did jump up a little in December.
The number of condos listed in the MLS in Pinellas County was 6,593. In November, there were 7,001 condos in the MLS. So, the volume has dropped a little bit.
The number of sales jumped too! In December, 280 condos were sold as compared to only 235 in November.
The median price for condo sales in Pinellas County in December was $140,000. In December of 2007 the median was $176,200. That's a 20.5-percent drop in median value and puts condos back to a pricing range as if it was the year 2004.
Same story on the pricing versus volume theory: condo prices dropped about 20-percent and the number of units sold increased.
So, is this the start of the much anticipated and needed real estate recovery? Well, probably not. There are some other major issues that need the attention of the nation -- like unemployment, Wall Street crisis and a host of other important matters. Those kinds of things will have an impact on the real estate recovery. But, it does show what the recovery is likely going to look like. And it shows sellers that if they want to get their property sold, they need to keep prices low. There are buyers out there -- sellers just have to price their property appropriately for the market.
Remember, if you want to know more about real estate in Pinellas County, visit my website at www.TheStPeteRealEstateSite.com.
Eventually, this increasing sales volume will significantly reduce the number of properties on the market, and then prices may start to move up again. I think that's how the recovery is going to look, and I predict that it will take a few years to reduce all this inventory and rebuild demand.
I think December gave us a preview of how the recovery is going to look.
The December Absorption Rate (AR) was up for both single family homes and condominiums. Not up a lot, but up! The AR, as you know, is determined by dividing the number of units sold in the month by the total number of units in the MLS.
For single family homes, the AR for December was 6.8-percent. In November it was 5.0-percent. That is a pretty significant jump. For condos, the AR for December was 4.2-percent. In November it was 3.4-percent. Again, a nice little jump which may show some market growth.
Single Family Homes Sales
The number of single family homes on the market decreased during December to 7,930 from November's 8,539. So, we are seeing a slight reduction in inventory at year's end.
We are also seeing an increase in the number of houses sold. In December, 536 single family homes were sold as compared to November's 429. Nice!
The median price for a single family home in December fell to $145,000 in Pinellas County. In December of 2007, the median was $184,900. That's a reduction in value of 21.6-percent December to December. Single family home median prices are now so low that they pre-date the current data charts, so prices are now pre-2003. Buyer's need to start buying now!
The data above is in-line with the theory that as prices go down, sales go up.
Condominium Sales
We all expect condo sales to start going up in December since it's the start of the tourist season along the west coast of Florida. True to form, condo sales did jump up a little in December.
The number of condos listed in the MLS in Pinellas County was 6,593. In November, there were 7,001 condos in the MLS. So, the volume has dropped a little bit.
The number of sales jumped too! In December, 280 condos were sold as compared to only 235 in November.
The median price for condo sales in Pinellas County in December was $140,000. In December of 2007 the median was $176,200. That's a 20.5-percent drop in median value and puts condos back to a pricing range as if it was the year 2004.
Same story on the pricing versus volume theory: condo prices dropped about 20-percent and the number of units sold increased.
So, is this the start of the much anticipated and needed real estate recovery? Well, probably not. There are some other major issues that need the attention of the nation -- like unemployment, Wall Street crisis and a host of other important matters. Those kinds of things will have an impact on the real estate recovery. But, it does show what the recovery is likely going to look like. And it shows sellers that if they want to get their property sold, they need to keep prices low. There are buyers out there -- sellers just have to price their property appropriately for the market.
Remember, if you want to know more about real estate in Pinellas County, visit my website at www.TheStPeteRealEstateSite.com.
-30-
posted by Terry Ward at 4:07 AM
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