Looks Like The Summer Doldrums Are Here

I was hoping for some extra added excitement in the Tampa Bay real estate market during June, but it appears that the dog days of summer are upon us.  The market was flat and non too exciting, although some activity is better than none I guess.

Let's start as usual with a look at June's Absorption Rate (AR).  For single family homes, the AR for June was 29.1% as compared to May's AR of 27.2%.  Considering all the years in which the AR went down month after month, I guess a 2.1% increase should put a smile on everybody's face.  The AR for condos was virtually flat for June as compared to May; June: 18.9%, May: 18.8%.  It's just not the season for a lot of condo sales.

Now, let's look at the numbers ...

Single family home listings fell again in June.  There were 3,217 single family homes listed in the Pinellas MLS in May, but only 3,160 listed in June.  Ask any real estate agent and you'll find out that obtaining new listings is becoming a real headache.

Single family home sales increased in June ... a good sign, indeed!  During May, some 874 homes were sold in Pinellas as compared to 918 in June.  So, volume at least is going up.

The median price however has been pretty flat.  For June 2012, the median price was $135,000 as compared to $132,000 in June of last year.  So, only a 2.2% increase in median price year over year.

About the only thing I can report on condo sales is that they were pretty flat in the last month.  In June, there were 3,223 condos listed and in May there were 3,303 ... so, not much difference.  Condo sales were just plain flat: 610 sales in June, 620 sales in May.  That's down quite a bit from where condo sales were during March and April.

The condo median price moved up a good bit in the last year.  In June of this year it was $101,800 as compared to $95,000 in June of last year.  That's an increase of 7.2%.

Really, when you look at all these numbers, it's obvious that the market is just kind of flat.  It's summer.  It's hot.  It's the slow season.  I'm going to take a nap.

Happy Selling!

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Uh-Oh! I Made A Mistake!

Yesterday, I wrote a little story about how today's low mortgage rates were advantageous for both buyers and sellers of real estate.  In that story, I noted that mortgage rates for a 30-year fixed loan were 3.66%.

Well, this morning I learned that 30-year fixed mortgage rates had actually fallen to 3.56%!  That, according to Freddie Mac, is the lowest rate since 1971.  Okay, I was a week behind on my info ... so shoot me!

I also learned that the average 15-year mortgage rate had dropped to 2.86% which is also a new record low.

When I first went into the real estate business many years ago, I bought a book entitled Barron's Financial Tables For Better Money Management, Mortgage Payments.   This is a book with page after page of amortization tables.  Each page is a different interest rate, and it charts the time of the loan and the amount of money borrowed.  In each column, it gives you the monthly principal and interest payment to amortize the loan.

The pages dealing with rates of 6% to 8% are absolutely wear-worn.  I got a lot of use from this little book in the 1990's and early 2000's.

The problem with the book is that it charts only mortgage rates of 5% or more (up to interest rates of 21-3/4%, if you can imagine that).  I guess nobody ever thought we'd see mortgage rates get as low as they are today.  So, with interest rates now at 3.56%, my little book is useless.  Nevertheless, I think I'll keep it just in case rates move up at some point.

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Lower Mortgage Rates Mean Good News For All

Have you checked mortgage interest rates recently?  They are about as low as I've seen them in several years.

I'm being told of 30 year fixed mortgage rates at 3.66%.  Well, there or thereabouts.

Now, it is true, buyers have to produce good enough credit and income statements to qualify for those low rates and not everybody will.  But for those buyers who do, what a great time to buy.  When rates get this low, it is practically like free money and buyers should not miss this opportunity to jump on the real estate buying bandwagon.

When rates get this low, buyers have a golden opportunity to purchase more home than they might otherwise be able to afford.  Why?  Because the monthly mortgage payment will be much, much lower thus allowing buyers to afford a more expensive home than when rates are higher. 

These lower rates are also good news for sellers.  Consider this: With lower mortgage rates, buyers can afford to make higher offers on your property because they can afford to make higher payments.  This means sellers might get higher offers from more qualified buyers, thus increasing their net revenues at closing.  It might also mean a reduction in those silly "low ball" offers that just waist your time. Sounds pretty good, doesn't it!

So, today's low mortgage rates have obvious advantages for buyers and also for sellers.  One word of caution: mortgage rates are subject to change due to market conditions and financial lending policies.  So, act now while rates are low.  You never know what the future might hold.

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Great Story In Today's Paper

Since not everybody has a subscription to the Tampa Bay Times newspaper, I am going to summarize a really informative story that appeared in today's paper.

The headline is "Buyers' Market?  Not So Fast".  The story describes how the real estate market has heated up in recent months but how many home shoppers still seem to think that it is a strong buyer's market and they want to find "bargains".

The article stresses that there just aren't a whole lot of "steals" in the market anymore.  The article then goes on to give buyers (and sellers too for that matter) five key tips on how to operate in today's real estate world. In summary, here are the five tips:

1. Drop That Lowball Mentality.  Buyers can't get away with those ultra-low offers in today's real estate market.  Most sellers will negotiate, but they are not desperate like they were a few years ago.  Today, getting a house for 90% of a fair asking price is about as "lowball" as buyers are likely to get.
2. Forget Sleeping On Your Decision.  If you see what you want, make an offer fast.  No mulling it over all night.  No having mom and dad come see the house next weekend.  With so few homes on the market today, buyers need to act fast.
3. Make A Personal Impression On The Seller.  With some homes getting two or more offers in a short time frame, the buyer's offer needs to stand apart from the others.  It's not just money, sometimes it's terms, or closing date, or escrow amount.  Sometimes, it's who-does-the-seller-like-best.
4. Get Pre-Approved For A Mortgage.  Let's face it, mortgages are hard to get today due to much tighter lending requirements.  Buyers need to be pre-approved and submit proof of that approval with their offer.
5. Submit A Clean Offer.  Buyers should not load-up their offer with all kinds of contingencies.  Offers need to be clean and simple.  The cleaner the contract, the more likely it will be accepted. 

This is good advice for all home buyers in today's real estate market. 

Happy Selling!

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