Tampa Bay Home Prices Now At A Two Year High

According to the latest Standard & Poor's Case-Shiller home price index report, single family home prices in the Tampa Bay area have jumped to a two-year high.  The report was released on Wednesday.

Home prices increased nearly 6 percent for October, 2012 as compared to the same month last year.  Prices moved up about 4 percent in 20 of the nation's largest markets which are used in the report.

Information released recently by the National Association of Realtors (NAR) showed that nationally, sales of previously occupied homes jumped to their highest level in three years during November.

Increased demand from home buyers and investors, along with fewer homes on the market are helping to increase property sales and improve prices, according to the report.  Also helping spur sales are improving employment rates and low mortgage rates nationwide.

This information would seem to indicate that if you are a home buyer, the time to act is now before prices get higher.  If you are a seller, the data seems to indicate that this may be the time to consider listing your home for sale in this improving market.

An important note: home prices in Tampa Bay are still just over half of what they were in May 2006 at the market's peak, but are still higher than they were ten years ago.

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Can This New Strategy Actually Work?

I don't think I have ever heard of a real estate pricing strategy like this.

Apparently in some areas of the country now, real estate markets have begun to improve to the point where properties are receiving multiple offers in a short period of time.  Some real estate agents in those markets are now underpricing their listings in order to attract multiple offers.  The competing buyers then "bid up" the price until the seller's desired price is reached.

I don't know.  I'd be kind of nervous about that approach.  You better really know your market situation.  Suppose you don't get the bidding war started?  All you would have done is tell buyers how low the seller might be willing to go.

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Citizens Insurance Changes Rules On Home Inspections

Citizens Property Insurance, the State of Florida's insurer of last resort, has changed the rules regarding electrical inspection on residential homes.  This is the "4-point inspection" with which real estate agents and home sellers are so familiar.

From now on, any Florida home that is thirty (30) years old must now undergo a 4-point inspection.  Under the prior rules, Citizens required the inspection only of homes that were 50 or more years of age.  So, if the home was built between 1962 and 1982 it must now be inspected.  Since those years were "boom years" in Florida real estate, it means that many thousands of more homes will be forced to have the inspection if they are to be insured through Citizen's.

The homes must comply with Citizen's new residential electrical standards.  Undoubtedly, many more homes will require updates to qualify for Citizen's Insurance.  Homes built between 1965 and 1972 that were originally wired with aluminum wiring will need to be given special attention because Citizen's will not insure a home with branch aluminum wiring.  Branch Wiring means the wires from the home's breaker panel to the receptacles, switches, lights and the like are aluminum. 

Homeowners with aluminum wiring have two options.  First, the house can be totally rewired with copper wiring -- a very costly undertaking.  The second option is to replace the aluminum wire with copper wire at the connection point.  The second option is much more affordable.  Wiring work of this kind should be done by a licensed electrician.

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November Was Almost A Repeat of October Real Estate Activity In Pinellas County

Boy, if you want to know what happened in Pinellas real estate in November about all you have to do is re-read the story about October.

The Absorption Rate (AR) for single family homes in October was 28.5% while it improved only slightly in November to 29.6%.  Not a significant difference.

For condos, the AR in October was 16.3% and it moved only to 17.7% in November.  That's an improvement, but hardly earth-shattering news.

About all you can say is that both the AR's are moving in the right direction.

Single Family Homes

In November, there were 2,882 single family homes listed in the MLS for Pinellas County.  That's a decrease from October's 2,999 listings.  Fewer listings is a troublesome trend that we have been watching for the past year.  Fewer and fewer homeowners seem to want to put their homes on the market today even though the sales activity for single family homes is quite brisk if the property is fairly priced.  Sellers need to be reminded that we are now in a seller's market and they can do quite well today.

Sales activity for November saw some 852 homes sold versus 856 sold in October.  That's virtually the same level.

The median price for a single family home has increased some 21.4% over the last year.  The median this November was $142,000 while it was only $117,000 in November of 2011.  This is good news for sellers and I don't quite understand the apparent reluctance to put more homes on the market.

Condominiums

Brother, you talk about a flat market!  Take a look at condo activity.

In November there were 3,311 condos for sale in Pinellas County.  In October, there were 3,313.  Statistically, the same inventory level.

There were 587 condos sold in November, and 541 sold in October ... pretty close to the same level of buying activity.

Just as surprisingly, condo prices have proven to be sluggish for the past year.  In November 2011 the median condo price was at $87,000, but in November 2012 it stood at only $91,000.  In an entire year the median price for condos has increased only 4.7%.  I'm hoping that condo activity will improve as we move more into the winter buying season.  I've got my fingers crossed.

Anyway, real estate in Pinellas seems to be holding its own but not much more.  Maybe we will see more activity after the first of the year ... at least, I hope so.

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