Bay Area Real Estate Prices Continue To Fall
Let's start with a look at the big picture. Nationally, home values dropped 0.6% from September to October, 2010 according to a story in today's St. Petersburg Times. The Times quotes Zillow.com as the company that tracks the figures.
In Tampa Bay, home prices dropped even more than the national average. Here, prices fell 0.9% from September to October according to Zillow. So, if you had a house, condo or apartment building that was worth $500,000 on September 1st, in just 30 days it's value fell to $495,500, a $4,500 loss in a month's time.
Let's let a little more time pass. Between the second and third quarters of this year, property values in the Tampa Bay area dropped 2.4% in 90 days. So, if you had a property worth $500,000 at the beginning of April, at the end of June it would be worth only $488,000, a loss of $12,000 in 90 days.
Let's say you've been trying to sell your property for a year -- from October 2009 to October 2010. During that 12 month period, property values here fell 9.2%. That same $500,000 property would now be worth only $454,000, a $46,000 loss in one year.
The real estate market turned south in the summer of 2006. That's when I started tracking the market in the hope that I might predict the next upturn. During that 4-1/2 year period, experts say that property values in Tampa Bay have declined by 46.3%. So, we take that same $500,000 property from 2006 and bring it up to today's values, and it is now worth $268,500; that's a loss of $231,500 in 54 months.
These kinds of losses are why real estate agents are telling sellers that the longer a property remains on the market, the less it is worth. According to Zillow, we have had 52 consecutive months of declining property values. The monthly declines have grown in each of the past six months, and are now at their highest point since March 2009. That means the market is not getting better, it is getting worse.
So, what can a seller do about this in order to get his property sold?
First, price your property to sell in 30 days. Buyers today are purchasing only bargain priced properties. To be a bargain, the property needs to be priced about 10% under its market value as determined either by a CMA prepared by a professional real estate agent or by an appraisal prepared by a certified appraiser. If your property does not sell in thirty days, re-price it but make sure you get down under market value.
Second, give the property a good clean-up. Even bargain hunters want to make sure that the property they are buying was well maintained and is in good condition. So, add some paint here and clean up the yard there. Get the place looking tip-top. That will help your property sell faster and probably for a little better price.
Third, negotiate every offer. Even if you don't like the price and terms being offered, don't just say "no". Say "maybe". Go back to every prospective buyer with a counter-offer and see if you can hammer something out. Remember, the buyer is looking for a deal and you need to make it look like you're giving him one.
If you've been reading this blog regularly you probably remember my comment that there are only two reasons why a property does not sell. When a property does not sell in a reasonable period of time, it is either overpriced or it is undermarketed. Most professional real estate agents do a pretty good job of marketing property. So if the property is not selling, the only other place to look is the price. The only person who controls the asking price of the property is the owner.
Real estate agents don't set prices, they respond to market conditions and can pretty much tell a seller what a property is worth based on current market prices. Ultimately, however, the owner sets the asking price for the house. While the owner sets the asking price, it is the buyer who determines the selling price. An owner can ask for the moon, but may have to settle for green cheese.
One final comment about prices here in the St. Petersburg area: During the 30 days from September to October of this year, Zillow reports that prices in the City of St. Petersburg fell 2.2%. That is the largest monthly dip found in all the major cities in this area. So, how long are you going to wait to bring your property into line with market conditions? Remember, the longer you wait, the less it will sell for. That's why they call it a declining market!
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In Tampa Bay, home prices dropped even more than the national average. Here, prices fell 0.9% from September to October according to Zillow. So, if you had a house, condo or apartment building that was worth $500,000 on September 1st, in just 30 days it's value fell to $495,500, a $4,500 loss in a month's time.
Let's let a little more time pass. Between the second and third quarters of this year, property values in the Tampa Bay area dropped 2.4% in 90 days. So, if you had a property worth $500,000 at the beginning of April, at the end of June it would be worth only $488,000, a loss of $12,000 in 90 days.
Let's say you've been trying to sell your property for a year -- from October 2009 to October 2010. During that 12 month period, property values here fell 9.2%. That same $500,000 property would now be worth only $454,000, a $46,000 loss in one year.
The real estate market turned south in the summer of 2006. That's when I started tracking the market in the hope that I might predict the next upturn. During that 4-1/2 year period, experts say that property values in Tampa Bay have declined by 46.3%. So, we take that same $500,000 property from 2006 and bring it up to today's values, and it is now worth $268,500; that's a loss of $231,500 in 54 months.
These kinds of losses are why real estate agents are telling sellers that the longer a property remains on the market, the less it is worth. According to Zillow, we have had 52 consecutive months of declining property values. The monthly declines have grown in each of the past six months, and are now at their highest point since March 2009. That means the market is not getting better, it is getting worse.
So, what can a seller do about this in order to get his property sold?
First, price your property to sell in 30 days. Buyers today are purchasing only bargain priced properties. To be a bargain, the property needs to be priced about 10% under its market value as determined either by a CMA prepared by a professional real estate agent or by an appraisal prepared by a certified appraiser. If your property does not sell in thirty days, re-price it but make sure you get down under market value.
Second, give the property a good clean-up. Even bargain hunters want to make sure that the property they are buying was well maintained and is in good condition. So, add some paint here and clean up the yard there. Get the place looking tip-top. That will help your property sell faster and probably for a little better price.
Third, negotiate every offer. Even if you don't like the price and terms being offered, don't just say "no". Say "maybe". Go back to every prospective buyer with a counter-offer and see if you can hammer something out. Remember, the buyer is looking for a deal and you need to make it look like you're giving him one.
If you've been reading this blog regularly you probably remember my comment that there are only two reasons why a property does not sell. When a property does not sell in a reasonable period of time, it is either overpriced or it is undermarketed. Most professional real estate agents do a pretty good job of marketing property. So if the property is not selling, the only other place to look is the price. The only person who controls the asking price of the property is the owner.
Real estate agents don't set prices, they respond to market conditions and can pretty much tell a seller what a property is worth based on current market prices. Ultimately, however, the owner sets the asking price for the house. While the owner sets the asking price, it is the buyer who determines the selling price. An owner can ask for the moon, but may have to settle for green cheese.
One final comment about prices here in the St. Petersburg area: During the 30 days from September to October of this year, Zillow reports that prices in the City of St. Petersburg fell 2.2%. That is the largest monthly dip found in all the major cities in this area. So, how long are you going to wait to bring your property into line with market conditions? Remember, the longer you wait, the less it will sell for. That's why they call it a declining market!
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posted by Terry Ward at 6:29 AM
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