March Sales Indicate The Return Of A Seller's Market For Pinellas County
I hope all the buyers out there were able to buy their dream house during the last three or four years. If you didn't, well my friend, you just might have missed out!
I don't know how it is in other parts of Florida or the nation, but in Pinellas County it appears that the market has made a major adjustment from being a buyer's market to being a seller's market once again. Remember, when real estate was making its big run upward in 2004 to 2006, it was a strong seller's market.
This change to a seller's market is something that economists, real estate agents, and other gurus have been saying was going to happen sooner or later in Pinellas County, and it apparently has. Now, the advantage has shifted back to seller's when it comes to negotiating price and terms in a real estate transaction. How long this will last is anybody's guess -- it may be just a passing window of opportunity for sellers, so if you are thinking about selling this might be the time.
Here's how we know it's now a seller's market ...
First, let's take a look at the Absorption Rate (AR) for March, 2012. For single family homes, the AR now stands at 23.7%. The AR is the inventory turn. It tells us how long it will take to sell all the inventory based on current activity. With an AR of 23.7%, it means that all the currently listed single family homes will be sold in 4.2 months. That's good news for sellers. It means houses are selling fast and that there is a lot of activity in the marketplace.
By comparison, the AR for single family homes in March of 2009 was 7.7%. At 7.7% the inventory would require almost 13 months to turn over. A market is considered in equilibrium when it takes about 6 months to turn the inventory. The faster the inventory turn, the better for sellers. The longer the inventory turn, the better for buyers.
The AR for condos in March was 20.2%. This means that condo inventory will turn in about 5 months. Again, that means we are now looking at a seller's market for condos.
Essentially, if it's a seller's market you should be looking for real estate prices to go up in value except for those that are distress sales like foreclosures or short sales where sellers may be in tough financial situations and need to sell fast and for less than market value.
There are fewer single family homes on the market right now. This means that buyers have fewer choices. During March of 2012 there were only 3,450 single family homes in the Pinellas Multiple Listing Service (MLS). The number of listings has been dropping steadily since January, and I'd be willing to bet you that it will continue to drop unless the mortgage companies suddenly dump a bunch of unsold foreclosures on the market during the coming months. By comparison, in March of 2007 (at the top of the buyer's market) there were 11,226 single family homes listed for sale in Pinellas County. Quite a change, don't you think?
The median price for a single family home in Pinellas County now stands at $132,900 for March. The median price has gone up every month in 2012. In March of 2011, the median price was $113,000, so that's an increase of 17.6% during the last twelve months.
Condos sales volume is looking good too!
The number of condos in the Pinellas MLS has fallen to 3,535 units. In January of 2012, there were 3,915 condos for sale -- so you can see that fewer and fewer condo units are now available. By the way, condo sales jumped from 419 units sold in January to 714 units sold in March -- boy, that's what I call a significant sales increase in a short period of time.
Condo prices, however, have not responded like you would expect with that kind of uptick in volume. The median price of a condo in March 2012 stood at $79,900. By comparison, the median was $90,000 in March of 2011, a decrease of just over 11% in a year. If the sales volume continues to be hot, prices will surely start moving upward due to the law of supply and demand.
So, what we've got now is what appears to be a buyer's market. How long that will last, I can't say. But it certainly is an interesting turn-around, don't you think?
On a personal note, I haven't written one of these "market round-up" stories in a few months, and some readers have asked why not. Frankly, I didn't think I needed to. The St. Pete Times has a new real estate reporter and I thought he was doing a pretty good job of market updates making my report unnecessary. Then, the St. Pete Times changed its name to Tampa Bay Times and his real estate reports took on a much more regional flare that included a lumping together of info from Pinellas, Hillsborough and Pasco counties. I also noted that the vast majority of interviews were being conducted among real estate brokers in Hillsborough County, who may not be up on what is happening in Pinellas County.
I've always tried to keep my blog stories focused on Pinellas County rather than the entire Tampa Bay region. I decided that such a report was once again needed due to an apparent regional writing viewpoint from the Times. Concentrating on Pinellas real estate is a luxury I allow myself -- after all, I don't have to sell newspapers or appeal to advertisers from both sides of Tampa Bay.
So, I've decided to start writing these Pinellas County-specific round-ups again. I hope you find them of value.
Happy Selling!
-30-
I don't know how it is in other parts of Florida or the nation, but in Pinellas County it appears that the market has made a major adjustment from being a buyer's market to being a seller's market once again. Remember, when real estate was making its big run upward in 2004 to 2006, it was a strong seller's market.
This change to a seller's market is something that economists, real estate agents, and other gurus have been saying was going to happen sooner or later in Pinellas County, and it apparently has. Now, the advantage has shifted back to seller's when it comes to negotiating price and terms in a real estate transaction. How long this will last is anybody's guess -- it may be just a passing window of opportunity for sellers, so if you are thinking about selling this might be the time.
Here's how we know it's now a seller's market ...
First, let's take a look at the Absorption Rate (AR) for March, 2012. For single family homes, the AR now stands at 23.7%. The AR is the inventory turn. It tells us how long it will take to sell all the inventory based on current activity. With an AR of 23.7%, it means that all the currently listed single family homes will be sold in 4.2 months. That's good news for sellers. It means houses are selling fast and that there is a lot of activity in the marketplace.
By comparison, the AR for single family homes in March of 2009 was 7.7%. At 7.7% the inventory would require almost 13 months to turn over. A market is considered in equilibrium when it takes about 6 months to turn the inventory. The faster the inventory turn, the better for sellers. The longer the inventory turn, the better for buyers.
The AR for condos in March was 20.2%. This means that condo inventory will turn in about 5 months. Again, that means we are now looking at a seller's market for condos.
Essentially, if it's a seller's market you should be looking for real estate prices to go up in value except for those that are distress sales like foreclosures or short sales where sellers may be in tough financial situations and need to sell fast and for less than market value.
There are fewer single family homes on the market right now. This means that buyers have fewer choices. During March of 2012 there were only 3,450 single family homes in the Pinellas Multiple Listing Service (MLS). The number of listings has been dropping steadily since January, and I'd be willing to bet you that it will continue to drop unless the mortgage companies suddenly dump a bunch of unsold foreclosures on the market during the coming months. By comparison, in March of 2007 (at the top of the buyer's market) there were 11,226 single family homes listed for sale in Pinellas County. Quite a change, don't you think?
The median price for a single family home in Pinellas County now stands at $132,900 for March. The median price has gone up every month in 2012. In March of 2011, the median price was $113,000, so that's an increase of 17.6% during the last twelve months.
Condos sales volume is looking good too!
The number of condos in the Pinellas MLS has fallen to 3,535 units. In January of 2012, there were 3,915 condos for sale -- so you can see that fewer and fewer condo units are now available. By the way, condo sales jumped from 419 units sold in January to 714 units sold in March -- boy, that's what I call a significant sales increase in a short period of time.
Condo prices, however, have not responded like you would expect with that kind of uptick in volume. The median price of a condo in March 2012 stood at $79,900. By comparison, the median was $90,000 in March of 2011, a decrease of just over 11% in a year. If the sales volume continues to be hot, prices will surely start moving upward due to the law of supply and demand.
So, what we've got now is what appears to be a buyer's market. How long that will last, I can't say. But it certainly is an interesting turn-around, don't you think?
On a personal note, I haven't written one of these "market round-up" stories in a few months, and some readers have asked why not. Frankly, I didn't think I needed to. The St. Pete Times has a new real estate reporter and I thought he was doing a pretty good job of market updates making my report unnecessary. Then, the St. Pete Times changed its name to Tampa Bay Times and his real estate reports took on a much more regional flare that included a lumping together of info from Pinellas, Hillsborough and Pasco counties. I also noted that the vast majority of interviews were being conducted among real estate brokers in Hillsborough County, who may not be up on what is happening in Pinellas County.
I've always tried to keep my blog stories focused on Pinellas County rather than the entire Tampa Bay region. I decided that such a report was once again needed due to an apparent regional writing viewpoint from the Times. Concentrating on Pinellas real estate is a luxury I allow myself -- after all, I don't have to sell newspapers or appeal to advertisers from both sides of Tampa Bay.
So, I've decided to start writing these Pinellas County-specific round-ups again. I hope you find them of value.
Happy Selling!
-30-
posted by Terry Ward at 11:26 AM
1 comments
