Another Sign Of Real Estate Recovery

If you're a somewhat regular reader of this blog site, you probably have noticed how I've been saying that it looks like real estate may be "at or near" the bottom, that median prices appear to be stabilizing, and that the volume of sales has been increasing regularly throughout 2009. Consequently, the worst of the real estate problems may be behind us and this may be a really good time to buy a new home. Of course, I'm talking about Pinellas County when I say those things.

Well, here's some more wood for that fire I'm building. And it comes from a different place.

Just across Tampa Bay in Hillsborough County, the Greater Tampa Association of Realtors has issued sales figures for June in their county. For the second consecutive month, the number of homes sold and property values rose in Hillsborough.

The average price in Hillsborough was $173,544. That is an increase in value of 5-percent from May. The number of transactions was up a whopping 19-percent to 1,714 sales. What's more, the inventory of unsold homes in the MLS is now the lowest since June of 2006, and the time on market for Hillsborough is now an average of only 8.3 months.

This same type of thing is happening in Pinellas County, and I suspect Pasco County will see similar sales soon if they haven't already.

So, what does this mean?

Very simply this: If you're a buyer who has been waiting for the market to "bottom out" before you buy that new home, it certainly seems like the time is now. If you continue to wait thinking the market may go even lower, you are likely going to miss your opportunity. Great deals on real estate are out there, you just have to go find them and make an offer. That's what smart buyers are doing right now.

Look, the trick to getting the best deal today rests in the buyer's ability to properly time the market. That's a very tricky thing for most people to do. Buy too early, and you may loose money. If you wait too long, you've missed your chance at the best deal as prices start to inch their way back up.

Based on what I'm seeing in the Tampa Bay area, it sure appears to me that this is the time you've been waiting for, that home prices won't get much lower, that mortgage interest rates are very affordable, that the $8,000 first time buyer program comes to an end pretty soon, that there is still a great selection of homes from which to choose, and that many sellers remain very desperate to sell their property. That all works in the buyer's favor!

So, what are you waiting for? It's not gonna get much better than this! If prices have bottomed out now, there's only one way for them to go ... and that's what you are trying to avoid, isn't it?

As the advertisements always say: Act Now, Tomorrow May Be Too Late!

For more information on real estate in the Tampa Bay area, please visit my website at www.TheStPeteRealEstateSite.com.

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June Real Estate Sales: Confusion Combined With Optimism

Two interesting bits of info moved across my computer screen about 6:15 this morning. Actually, three interesting bits.

The first was that the Rays won the baseball game last night with a key hit in the ninth inning. While that is a good reason to cheer, it is not what this article is about.

The second interesting bit was that PMI Group has done their quarterly research and determined that Tampa Bay has a 99-percent probability of seeing real estate values continue to fall through 2011.

The third interesting bit was that the Pinellas Realtor Organization released the June sales figures and they looked great compared to what we've been seeing for the past two or three years -- certainly not like an area that is going to see continued price declines for two more years.

The PMI Study

Mortgage insurer PMI Group, Inc. analyzes the nation's real estate market every quarter. They then project trends in pricing for the next two years. They are always looking two years out into the future and base their projections on such risk factors as income, interest rates, home prices and affordability data which has been collected since the early 1980's.

In their latest study, they said that Tampa Bay will experience about two more years of declining real estate prices -- actually, they said there is a 99-percent probability that Tampa Bay will experience two more years of declines. In fact, they said that 324 of the nation's top 381 metro markets face declines during the next two years.

Sounds like negative thinking to me. What's more, I'm not sure it's true. They clearly have not analyzed the June sales figures for Pinellas County and compared them to last year's figures. Let's take a look ...

June Sales Report

As usual with this report, let's start by looking at the Absorption Rate (AR). The AR, as you know by now, is determined by dividing the number of units sold in the month by the total number of listings in the MLS system.

For single family homes, the AR for June stood at 11.1%. That's a real nice, healthy jump from May's AR of 8.9%.

For condo's, the AR for June stood at 7%, and that's a nice jump from May's 5.7% AR.

So, as you can see, sales are increasing in the area. Remember, when property sells faster it usually reflects improving levels of demand, and increasing demand usually means prices want to go up rather than down. You remember that from Econ 101, right? The AR, by the way, has been going up for both single family homes and condos every month for quite a long time. I guess that's something the folks at PMI don't know about, or perhaps just overlooked.

June Single Family Listings

There were 6,702 single family homes in the Pinellas MLS during June. That's a decrease from May's 6,910. Fewer homes on the market mean that buyers need to start looking for their dream home now because the choices are getting slimmer with each passing day. How slim are the pickings starting to get? Well, while they are still pretty good in most neighborhoods, the choices are way down from where they were just two years ago. In March of 2007, there were 11,226 single family homes in the Pinellas MLS. That's quite a difference, and it means slimmer pickings for buyers.

Single family home sales in Pinellas County for June totaled 746 homes. Again, that's a nice increase over May's total of 616 homes sold. In point of fact, single family home sales have increased every month of 2009, starting at January's low of 381 sales. I like this ... it shows nice steady progress.

The median price for a single family home in June stood at $146,500. That's down 20.8% over June, 2008's median of $185,000. Still, the median price has risen slightly every month this year except for February. Prices have been pretty stable at about $145,000 or so and have varied only by about $5,000 in 2009. So, I'm seeing price stability which may be a sign that the market in Pinellas County has "bottomed-out" as they say. Still, if you are a seller, you need to price your property properly for today's market. Let your real estate agent or appraiser help you determine the correct market price.

Condo Sales For June

Condo sales picked up pretty nicely in June as well. There were a total of 6,059 condos in the MLS for June as compared to 6,234 in May. In February there were 6,775 condos on the market, so that's a nice decrease in inventory for the past six months.

Sales in June took a real nice jump that ought to have condo sellers pretty excited. During June, 422 condos were sold in Pinellas, as compared to 355 in May. Condo sales have been increasing every month from January's low of only 189 sales -- quite a nice increase, don't you think!

There even seems to be something of a slowdown in price declines for condos. The median price for June was $138,500 but in June of 2008 it was $160,000. While this represents an annual price decline for June to June of 13.4%, that's a lot better than other median prices which saw annual declines approaching 30% for condos. Yes, I think condo sellers need to feel a bit of encouragement when looking at these June figures.

Here's something everybody should keep in mind. When you compare overall sales volume of June 2009 to June of 2008, both single family and condo sales combined, the sales volume is up by 21.8%. We sold a total of 1,168 properties in June of 2009 versus only 959 in June of 2008. I find that to be very encouraging.

So, would somebody please call the guys at PMI and let them know that we don't agree with their latest bunch of bad news.

For more information about real estate in the Tampa Bay are, please visit my website at www.TheStPeteRealEstateSite.com.

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