Housing Prices Still Falling
Just how far have housing prices fallen since reaching their peak in the summer of 2006? According to the latest S&P/Case-Shiller home price index, values locally have dropped 40.6%.
What does this drop mean? If you're a buyer or seller, it means that prices today are at about the same level as they were during August of 2003.
In addition, the March Case-Shiller report indicates that house prices have not yet stabilized in the Tampa Bay area. Housing values dropped 22.4% from March 2008 to March 2009 in Tampa, and between February and March of this year alone they dropped 2.7%.
This February-March drop is especially worrisome because it indicates that the value decline is continuing unabated. As property values continue to fall, the number of short sales and foreclosures will likely continue to increase as those who bought during the 2005-2006 market boom seek to sell upside-down properties.
These distress sales force values farther down for all properties. All sellers of property these days are being hurt financially by the results of the current downward spiral which apparently has not yet run its full course. Sellers today must price their property at reduced prices to be competitive with similar homes that are being offered at distress-sale prices. As these homes are sold, they in turn force other sellers to bring prices even lower and force CMA and appraised values even lower. It's a vicious cycle.
Someday this cycle will come to an end and we'll move from a strong buyer's market to something a little more even. But that probably will not happen until the current inventory of distress sale properties is sold. Right now, about one transaction in three in Pinellas County is a distress sale of some kind. The problem is that there are thousands of distress sales currently in the MLS system here, and we probably have thousands of other distress sale candidates currently considered "ghost listings". These ghost listings are owners who would like to sell, but are currently holding their property off the market waiting for better times. All in all, it might be quite a while before we move away from the current downward pricing spiral.
Well, that's my view.
For more information on real estate in the Tampa Bay area, please visit my website at http://www.thestpeterealestatesite.com/.
What does this drop mean? If you're a buyer or seller, it means that prices today are at about the same level as they were during August of 2003.
In addition, the March Case-Shiller report indicates that house prices have not yet stabilized in the Tampa Bay area. Housing values dropped 22.4% from March 2008 to March 2009 in Tampa, and between February and March of this year alone they dropped 2.7%.
This February-March drop is especially worrisome because it indicates that the value decline is continuing unabated. As property values continue to fall, the number of short sales and foreclosures will likely continue to increase as those who bought during the 2005-2006 market boom seek to sell upside-down properties.
These distress sales force values farther down for all properties. All sellers of property these days are being hurt financially by the results of the current downward spiral which apparently has not yet run its full course. Sellers today must price their property at reduced prices to be competitive with similar homes that are being offered at distress-sale prices. As these homes are sold, they in turn force other sellers to bring prices even lower and force CMA and appraised values even lower. It's a vicious cycle.
Someday this cycle will come to an end and we'll move from a strong buyer's market to something a little more even. But that probably will not happen until the current inventory of distress sale properties is sold. Right now, about one transaction in three in Pinellas County is a distress sale of some kind. The problem is that there are thousands of distress sales currently in the MLS system here, and we probably have thousands of other distress sale candidates currently considered "ghost listings". These ghost listings are owners who would like to sell, but are currently holding their property off the market waiting for better times. All in all, it might be quite a while before we move away from the current downward pricing spiral.
Well, that's my view.
For more information on real estate in the Tampa Bay area, please visit my website at http://www.thestpeterealestatesite.com/.
posted by Terry Ward at 3:36 AM
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