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.
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.
-30-
posted by Terry Ward at 6:55 AM
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