Tampa Bay Home Prices Continue To Fall, But There May Be A Silver Lining In That Cloud

The Standard & Poor's/Case-Shiller Home Price Index was released on February 22nd. It reported that home prices in the Tampa Bay area fell another 2.6% in December, 2010. Prices are now at their lowest level since peaking in 2006.

If you are a buyer, this is great news!

About 90 years ago, a cowboy turned humorist named Will Rogers was trying to buy a house in Los Angeles. He had been house-hunting in LA a few years previously, and was amazed at how prices had increased in LA in such a short time. As the story goes, he made the following observation: "What I've learned is, don't wait to buy real estate. Buy real estate, and wait."

Well, the same is probably true today. With prices so low, it would be a great time to implement a buy-and-hold strategy on both your personal home and on investment properties. Someday, these prices will go back up. The only way to take advantage of that future increase is to buy now at a low price, and as Will Rogers would advise, wait.

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Real Estate Takes A Dip In January

After some much improved sales and listing figures for December, the Pinellas real estate market suffered a dip in activity during January.

According to figures released by the Pinellas Realtor Organization (PRO), Absorption Rates (AR) for both single family homes and condominiums suffered setbacks during the first month of 2011.

The AR is determined by dividing the number of units sold during the month by the total number of listings in the MLS system. For single family homes, the January AR fell to 9.3% from December's more robust 11.9%. This means it took sellers longer to find buyers during January than it did in December. The AR for condos also fell sharply during January, dropping to 6.9% as compared to December's 9.4%.

Single Family Homes

During January there were 6,414 homes listed for sale in the Pinellas MLS system. This is a slight increase in listings compared to December's 6,327. So, there are now more homes on the market.

Sales of single family homes took a big hit during January. Only 595 single family homes were sold during January as compared to December's 754.

The median selling price in January of 2010 was $130,000, but it fell to $99,900 in January 2011, a 23.2% decline in median price January to January. Undoubtedly, much of this price decline can be attributed to the increased number of investors taking advantage of low priced foreclosure and short sales.

Condominiums

Condominiums remained the trouble spot for sales activity in Pinellas during January. The number of condos listed for sale fell from December's 5,205 units to January's 5,192. So, there are a few fewer condos from which to choose right now.

Condo sales slumped from December's 489 units sold to January's 360 sales.

The median price of condos sold in January indicates that condo buyers are looking for lower priced units. In January a year ago, the median was $113,000, but that figure fell to $75,500 for January of 2011. That's a 33.2% drop in median price January to January, and again, I think it reflects activity in the sale of lower priced foreclosures and short sales.

So, that's the way the numbers looked for January. I'd like to have seen 2011 start off with better sales, but I think the cold whether up north combined with the dismal unemployment scene locally has hampered sales activity in Pinellas.

Let's keep our fingers crossed that February will be a better month.

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