March Was A Good Month For Pinellas Real Estate Sales
It has been a long time since I've had anything really good to write about in this blog, but the sales figures for March are pretty doggone good!
Let's look at the Absorption Rate (AR) which, as you know, is determined by dividing the number of units sold in the month by the total number of units in the MLS system.
For single family homes, the AR for March was 14.5%. That is the best monthly AR in over three years! The same is true for the AR for condos. The condo AR stood at a remarkable 12.2%!
Single Family Homes
For the month of March, there were 5,812 single family homes listed in the Pinellas MLS. That's a decrease from February's 6,153. You might think that fewer units for sale would mean fewer units sold, but NO, sales went up substantially in March. Some 845 single family homes were sold in Pinellas County in March as compared to February's 629. That makes this the best single month for sales since the market was at its peak in June 2006 when 959 units were sold.
Of course, you can find a dark cloud in every golden sunset if you look hard enough. The median price took a hit. The median sales price for March 2011 was down to $113,000 as compared to March 2010's median of $138,500. That's a drop of 18.4% year to year. I'll have more to say about this price decline toward the bottom of this story, so keep reading.
Condo Sales
Condos, the red-headed stepchild of the Pinellas real estate industry, had a pretty good month in March as well. There were 4,809 units listed in the MLS as compared to 5,073 in February. A reduction in condo inventory has to be considered a good thing, especially for condo sellers.
Sales of condos were red hot in Pinellas and have been since the first of the year. During March, 587 condos were sold. In February, 452 were sold. In January, 368 units made it to the closing table. That is fabulous growth for that sector and its good too see some life coming back into the condo market after all these years of flat sales activity.
Of course, like single family homes, condo prices keep falling. The median in March 2011 was down to $90,000. The median for March 2010 was $110,000, so that's a drop in median value of 18.2% year to year.
Financing
I noticed some new data while researching this story: financing statistics. I don't know if they have always been there and I just missed them, or if this is some new data being supplied by the Pinellas Realtor Organization, but it puts some very interesting light on the subject of real estate sales and who's-buying-what.
For a long time, those of us who have been involved in the sale of investment properties have noticed that a lot of investors buy their properties all-cash, no financing. This increases the yield on the investment to the owner, obviously.
Well, the new financing data indicates that of all the properties purchased this year in Pinellas County, 66% of those sales have been all-cash purchases. What is more, the median price keeps falling, and remember, median means that half the people paid more than the median value and the other half paid less. A lot of investors buying lower-priced properties will drive the median price down -- and that's what we've been seeing for the last year or so. By way of comparison, only about 30% of purchases have been via conventional, FHA or VA mortgage -- an indicator of non-investor purchases.
With 66% paying cash and a falling median, well, that's got investor purchases written all over it. A lot of investors buy lower priced houses for cash, fix them up, then either rent them or sell them again for a profit. Investor purchases of short sales and foreclosures will tend to drive down a median price figure, and we've been seeing a lot of investor activity in those sectors as well. I'd be willing to bet dollars-to-donuts that the majority of these sales are going to investors rather than to primary home buyers. This data just has that kind of look to it to me.
It also follows a trend that I saw when selling real estate back in the 2002-2005 period. In those days, the stock market was as flat as a blacktop road cutting through a south-Florida pine woods. I had many buyers tell me they were buying real estate because you "can't make money with money anymore". Given the topsy-turvy stock market of today, I'll bet a lot of investors are pulling money out of turbulent Wall Street paper and going for brick-and-mortar investments.
Anyway, it was a good month for Pinellas real estate no matter who did the buying -- let's hope it continues!
-30-
Let's look at the Absorption Rate (AR) which, as you know, is determined by dividing the number of units sold in the month by the total number of units in the MLS system.
For single family homes, the AR for March was 14.5%. That is the best monthly AR in over three years! The same is true for the AR for condos. The condo AR stood at a remarkable 12.2%!
Single Family Homes
For the month of March, there were 5,812 single family homes listed in the Pinellas MLS. That's a decrease from February's 6,153. You might think that fewer units for sale would mean fewer units sold, but NO, sales went up substantially in March. Some 845 single family homes were sold in Pinellas County in March as compared to February's 629. That makes this the best single month for sales since the market was at its peak in June 2006 when 959 units were sold.
Of course, you can find a dark cloud in every golden sunset if you look hard enough. The median price took a hit. The median sales price for March 2011 was down to $113,000 as compared to March 2010's median of $138,500. That's a drop of 18.4% year to year. I'll have more to say about this price decline toward the bottom of this story, so keep reading.
Condo Sales
Condos, the red-headed stepchild of the Pinellas real estate industry, had a pretty good month in March as well. There were 4,809 units listed in the MLS as compared to 5,073 in February. A reduction in condo inventory has to be considered a good thing, especially for condo sellers.
Sales of condos were red hot in Pinellas and have been since the first of the year. During March, 587 condos were sold. In February, 452 were sold. In January, 368 units made it to the closing table. That is fabulous growth for that sector and its good too see some life coming back into the condo market after all these years of flat sales activity.
Of course, like single family homes, condo prices keep falling. The median in March 2011 was down to $90,000. The median for March 2010 was $110,000, so that's a drop in median value of 18.2% year to year.
Financing
I noticed some new data while researching this story: financing statistics. I don't know if they have always been there and I just missed them, or if this is some new data being supplied by the Pinellas Realtor Organization, but it puts some very interesting light on the subject of real estate sales and who's-buying-what.
For a long time, those of us who have been involved in the sale of investment properties have noticed that a lot of investors buy their properties all-cash, no financing. This increases the yield on the investment to the owner, obviously.
Well, the new financing data indicates that of all the properties purchased this year in Pinellas County, 66% of those sales have been all-cash purchases. What is more, the median price keeps falling, and remember, median means that half the people paid more than the median value and the other half paid less. A lot of investors buying lower-priced properties will drive the median price down -- and that's what we've been seeing for the last year or so. By way of comparison, only about 30% of purchases have been via conventional, FHA or VA mortgage -- an indicator of non-investor purchases.
With 66% paying cash and a falling median, well, that's got investor purchases written all over it. A lot of investors buy lower priced houses for cash, fix them up, then either rent them or sell them again for a profit. Investor purchases of short sales and foreclosures will tend to drive down a median price figure, and we've been seeing a lot of investor activity in those sectors as well. I'd be willing to bet dollars-to-donuts that the majority of these sales are going to investors rather than to primary home buyers. This data just has that kind of look to it to me.
It also follows a trend that I saw when selling real estate back in the 2002-2005 period. In those days, the stock market was as flat as a blacktop road cutting through a south-Florida pine woods. I had many buyers tell me they were buying real estate because you "can't make money with money anymore". Given the topsy-turvy stock market of today, I'll bet a lot of investors are pulling money out of turbulent Wall Street paper and going for brick-and-mortar investments.
Anyway, it was a good month for Pinellas real estate no matter who did the buying -- let's hope it continues!
-30-
posted by Terry Ward at 5:11 AM
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