Tampa Bay Real Estate

Some Real Estate Photography Tips

2012-02-10T10:49:00.000-08:00

It has been my pleasure recently to be doing more and more property searches for home buyers. Naturally, selecting the right property often begins with taking a look at the photos that the listing agent has shot and placed in the Multiple Listing System. Like everybody else in this highly visual age, I am swayed by appearance.

It is astonishing how bad some of these photos are.

Taking great photos today is not nearly as complex as it was in years past when you shot everything on film and had to worry about film speed, aperture settings, flash settings, shutter speeds, focus, depth of field, developing and all the other things that plagued film-based photography.

Today, with the advent of digital photography, taking good pictures is almost as easy as point-and-shoot.

Nevertheless, I'm seeing some really horrible photography in the MLS and on flyers and other kinds of advertising.

So, I thought I'd make a few suggestions that might improve the presentation of properties and help you sell them faster and perhaps for more money.

1. Use A Flash. Almost every modern digital camera today comes with a little flash built right into the camera. If you are inside a building, use it. Flash lets you overcome being backlighted when you are shooting back toward a window or other strong source of light. It also helps to eliminate shadows; eliminating shadows makes the room look larger. If you have a more powerful strobe light, aim it upward and let the light bounce off the ceiling and flood the room evenly -- that's what the pros do!

2. Avoid Silhouettes. Silhouettes happen when you have to shoot into the sun. Your camera's built-in light meter is overpowered by the sunlight and it underexposes what you want to take a picture of -- like the exterior front of the house. This is very common with properties that face north and have the sun behind them all day in the winter months. To overcome this problem, you have to move in real close to the building so that the sun does not enter your camera lense. The meter will then expose the building properly. Of course, you will only get part of the house in the photo, so take a few extra shots and insert them into the MLS so people get a good idea of what the exterior looks like. Or, wait for the sun to set and take an exciting nighttime shot of the property with all the lights on inside the house and around the swimming pool -- very artistic, and it sells!

3. Tidy Up Before Shooting. You aren't going to believe this, but lately I've seen kitchen photos in the MLS in which it is clear the seller hasn't washed the dishes in days. Or made the beds. Or cleaned the bathtub. Ugh! I'm not saying you as the agent or photographer has to do this kind of heavy lifting, but you might want to delay the photo shoot until somebody else does. Remember, you're there to try to make the place look good. And for heaven's sake, close the lid on the toilet.

4. Move The Cars And Boats. You are there to take a photo of the house, not the '93 Buick in the driveway. A car is in front of the house. That means it is in the foreground. Things in the foreground of a photo look larger than things in the background. So, if the car is in front of the house you're actually taking a photo of a great big car and a little tiny house. I'm sure that's not what you had in mind. Simple solution. Move the car and then take the photo. Same holds true with boats on trailers.

5. Don't Skimp. My final suggestion is to not skimp on photography. It amazes me how many agents take one photo and that's it -- especially if they are listing a short sale or foreclosure. You can put many photos in the MLS system, and we live in a visual age. It should not matter if you are listing a million dollar mansion or a more humble home, the seller deserves your best effort. After all, you took the listing -- and it is your professional reputation that is at stake in your marketing effort.

If you really are one of those people who just can't seem to take a good photo, call one of the real estate photography services. They'll send a professional photographer to the house, take the pictures properly, edit them, make a video for MLS and send it back to you ready to be inserted. The cost is very reasonable and you don't have to lift a finger, or press a shutter as the case may be.

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Selling A Furnished Property

2012-01-25T07:33:00.000-08:00

Lately, it seems I've been involved in some sales of fully furnished properties. Sellers seem a little confused about how to proceed with these sales, and don't fully understand the revised rules under which today's mortgage companies operate in regard to loaning money for a furnished property.

Mortgage companies have never liked to loan money on a furnished home. Simply put, they don't like to loan money on used furniture. So for years, real estate agents have been listing furnished properties and including the phrase "furniture adds no value" in their description of the property in the MLS and in the sales contract. I guess that worked for awhile, but now things are different.

We now have new rules from mortgage companies about writing a mortgage on a furnished property. Essentially, if any furniture is included on a sales contract for property, the loan-to-value ratio of the loan will be reduced by the value of the furniture.

This means that the furniture will have to be appraised and the amount of the appraisal will be reduced from the purchase price. This might result in the buyer being forced to come to the closing with additional funds to make up the difference.

Here's a suggestion for those who want to sell a property furnished. First, make a detailed inventory of all the furniture that is going to be left with the property. Then, clearly state that the furniture will be sold in a separate bill of sale outside of the closing. That way the furniture stays at the property but should not be considered part of the real estate transaction. Sellers can charge whatever they want for the furniture, but they should keep in mind that used furniture does not usually have a very high price.

Hope this is of some help!

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Good News For Homeowners With Chinese Drywall

2012-01-11T06:23:00.000-08:00

If your property was built with Chinese drywall, there may be some help coming your way!

The company that manufactured the drywall, Knauf Plasterboard Tianjin, has agreed to pay hundreds of millions of dollars to resolve court claims by thousands of Gulf-coast property owners. The property owners contend that the Chinese drywall has ruined their homes and caused various illnesses.

The deal with Knauf has been given preliminary approval by federal judge Eldon Fallon of the U.S. District Court who said the possible settlement seemed "fair, reasonable and adequate". Under the proposal, Knauf has agreed to create an uncapped fund to pay for repairing approximately 4,500 properties in Florida and other southeastern states where the defective drywall was sold and installed.

Sounds good to me!

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Bay Area Home Prices Predicted To Improve This Year

2012-01-09T06:45:00.000-08:00

Any of you who read this blog regularly know that I do not like to make predictions. Usually, my crystal ball is kind of cloudy on when things are going to happen, so I just steer clear of sounding like a know-it-all.

Other people, however, have crystal balls as clear as gin and can see far into the future with perfect clarity.

Such is the case for an organization called Clear Capital. This California-based group has issued some predictions for the housing market for 2012, and I thought I would pass them along to you in case you didn't read today's Tampa Bay Times.

According to Clear Capital, the Tampa Bay area will see residential real estate prices increase 7.4% this year. That would make this area sixth best in the nation as far as price increases go.

They base this prediction on the fact that Tampa Bay suffered through some of the biggest declines in value in the last few years. So, I guess that in their opinion we have no place to go but up! Of course, the story also indicated that we are seeing a decline in housing inventory which should drive prices up, and a reduction in foreclosures as banks now prefer short sales which sell at a higher price than foreclosed property. With fewer houses on the market, prices should start to recover in this area. It's that old supply-and-demand thing from Econ 101. Remember it?

What other areas are predicted to have prices rise this year? Orlando, +11.7%. Miami, +8.8%. Jacksonville, +4.3%.

Clear Capital says some areas will still be falling. Atlanta, -14.4% (worst in the country). Los Angeles, - 10.3%. Seattle, -7.5%.

All I can say is that I hope these guys are correct about Tampa Bay. They indicated that most of the gains will come during the second half of the year, so look for rising prices after July.

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Some Good Real Estate News To Start The Year

2012-01-06T07:59:00.001-08:00

Let's start 2012 with some good news about real estate!

In case you missed them, the newly re-named Tampa Bay Times has run two stories on back-to-back days that give everybody concerned with real estate a reason to smile.

On January 5th, there was a story about how growth is returning to Florida. The data was obtained from Atlas Van Lines. For the first time in five years, Atlas Van Lines has reported that inbound moves outnumbered outbound moves in Florida. In 2011, there were 5,636 inbound smoves and only 5,269 people moving out of the state. This may be a sign that the Florida economy is moving forward since more people from other states are moving here. That's good news for real estate since those new residents will need places to live.

The second piece of good news is that the vacancy rate for commercial/office buildings dropped 19% during 2011. Typically, when vacancy rates decline it means businesses are hiring more people. More jobs mean people have more money and have a better chance to qualify for home mortgages. This should be good news to home sellers throughout the Tampa Bay area.

These are both great trends. Let's hope they continue.

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So, How's The Real Estate Market?

2011-12-07T06:49:00.001-08:00

One of the most frequently asked questions I get is simply this: "So, how's the real estate market?"

That's a fair question.

I have stopped doing my monthly reports because I feel like the new real estate writer at the St. Pete Times is doing a pretty good job. So, I've kinda slacked off doing those monthly reports.

Instead, what I will give you is some info that I have not seen in the paper -- and it is an answer to the above referenced question.

Comparing October of 2011 with October of 2010, there were 891 properties sold in that month in 2010 and 1,079 sold in 2011. So, volume is up by 21%.

The total value of properties sold in October 2010 was $166, 951,900. In October 2011, it was $176,313,900. An increase in total sales value of 4.3%.

The average selling price for October 2010 was $189,600. For October 2011 it was $163,400. So, average selling price dropped 13.8%.

How many properties are on the market? Well, inventory is way down. In October 2010 there were a total of 12,150 properties on the market in the MLS. For October 2011 there were only 8,256. That's a decline of 32%. There are today roughly one-third fewer properties on the market than last fall. So, buyers have less to choose from, but sellers have less competition.

So, the answer to "how's real estate" is that sales volume is up, property values appear to be still declining, and the selection of properties on the market is quite a bit less than a year ago. Is this good news or bad news? Depends on whether you are a buyer or a seller.

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How To Start The Mortgage Approval Procedure

2011-10-25T08:22:00.000-07:00

Applying for a mortgage can, at first, seem like an overwhelming procedure for many home buyers -- especially first time buyers and those who have not purchased real estate in a long time.

Here's a list of the kind of information you'll need to have on hand when you visit your mortgage banker or broker ...

Have the name, address and social security number of each person applying for the mortgage;

Have the name, address, telephone number and payment history for your current landlord or mortgage company;

Have the source(s) of funds for your down payment and closing costs;

Have your bank name and the approximate balances of your checking and savings accounts including all the account numbers;

Determine the market value of any stocks, bonds, mutual funds or other assets that you own;

Determine the net worth of any business you own.

The bank will also want to know about your income. So, you'll need ...

The gross monthly income of everyone who is going to be on the mortgage (include salary base, commission and bonuses separately);

Employment information to include the company name, address, telephone number and your dates of employment for two years;

List any other income, including child support or alimony, social security, retirement, dividend and interest income.

And, of course, the mortgage people will need to review your debts and liabilities, so ...

Bring your credit card and installment loan info;

Have information about any other properties you own, including rentals, second home and investment properties, including the amount you pay for taxes and insurance;

If you pay any alimony or child support payments, you will need this info as well.

Use this as a handy checklist to make sure you're fully prepared for that upcoming meeting with your mortgage agent. It's the first step in qualifying for that dream home!

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Fed Policy Should Drive Investors To Real Estate

2011-08-15T04:04:00.000-07:00

About a week ago, the Fed announced that it would hold interest rates at or near zero percent through 2013. The feeling in Washington is that to raise interest rates now might hamper the already fragile economic recovery.

This recently declared policy means two important things for investors. First, you won't be able to make money merely by investing cash in various bank instruments ( like CD's, for example). Second, mortgage interest rates will likely remain low for at least the next two years.

Fed monetary policy has kept interest rates low for quite a long time now, and lender banks are not making much money from those kinds of loans. As a consequence they are not paying much for the money you deposit with them. CD's are not paying near what they were in my father's day, neither are passbook savings or other bank-backed programs that have been traditionally supported as "safe havens" for money -- especially among those approaching their retirement years. The other side of this coin is that it encourages low mortgage rates, thus making housing more affordable.

If you think about it a little, this Fed policy encourages investors to look toward real estate as a viable addition to their portfolios. After all, you won't be able to make money with money for at least another two years, and mortgage interest rates look especially attractive for the foreseeable future. On top of all that, real estate prices are low right now and many sellers seem willing to negotiate even better deals -- especially if the property is a short sale or foreclosure.

This kind of policy setting by the Fed should drive investors toward real estate. This might be the time to invest in some good residential real estate or small commercial property with an eye toward making a profit each month from rental income. Look to the long-term and forget about "flipping" the property which is a short-term strategy that works best when the market is overheated with buyers who have easy access to mortgage money.

Of course, you can always put your money into the stock market if you like roller coaster rides. If you do that, keep in mind that they call the last ten years of stock market activity the "lost decade" because practically nobody -- even professional money managers -- made any appreciable money in the stock market. The last two weeks should prove my point on that.

Since the Fed's window for raising rates is at least two years away, I'd say now is the time to consider adding real estate to your portfolio.

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For Sale By Owner Guru Uses Agent To Sell His Property!

2011-08-12T07:33:00.000-07:00

For years, I've been saying that home sellers were shorting their profit potential by selling their property without the aid of a real estate agent. Real estate agents generally get a 9% higher price for property than do the owners.

Despite this, many people insist on trying to sell on their own. In fact, in recent years there has even been a a website developed which acts like a national Multiple Listing Service specifically for owners to promote their property.

This website, called ForSalebyOwner.com, was founded by Colby Sambrotto. Recently, the Wall Street Journal reported that Sambrotto wanted to sell his 2,000 square foot, 2-bedroom apartment in New York City. Being a For Sale By Owner (FSBO) guru, he tried to do this without the help of a real estate agent.

Apparently the apartment lingered on the market for about six months. After that, Sambrotto called in the help of real estate agent Jesse Buckler. Buckler told Sambrotto that his apartment was priced too low and was not attracting the right kind of buyers. He advised that the price be raised by $150,000.

At first, Sambrotto did not accept the advice of Buckler, but finally allowed the price to be increased. In a short time, the apartment attracted multiple offers and ended up closing for $150,000 over the original asking price.

Hey, stop laughing! This is a true story! Check the Wall Street Journal for August 3, 2011.

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Why Investors Should Look At Real Estate

2011-08-03T05:27:00.000-07:00

You've probably seen the morning reports on the stock market's performance for the past eight days. Between the debt crisis and the childish performance from Congress, word of a big drop in consumer spending, bad employment figures, soverign debt problems in Europe and all the rest, stocks had their longest losing streak since the start of the 2008 credit crisis. Investors are worried about federal spending cuts and the apparent stall in the economic recovery.

Because of this, the Dow Jones Industrial Average dropped 265.87 points on Tuesday, August 2nd. The eight day losing streak for Wall Street has been the worst since October, 2008 -- that is when Lehman Brothers collapsed and is considered by many to be the peak of the U.S. credit crisis.

The Standard & Poor's 500 dropped over 32 points on Tuesday. For S&P, this is the worst 7-day streak of losses since October 2008.

The Nasdaq composite dropped over 75 points, a 2.8% drop in overall value in one day.

Quite possibly, whatever gains you feel like you have made in the stock market since the first of this year may very well have been lost in the last week or so. Check your statement for July and see how you did.

I know some people who did pretty well in July with their investments. They invested in real estate during the last year or two. No, they did not flip any property. They rented them to solid tenants who paid their rent on time.

I am not an investment advisor, but those who read this blog know that I have been suggesting for some years that the stock market has become a "roller coaster ride" and that long-term real estate investments will prove to be the best -- and perhaps the only investment -- that will be profitable over the years. Did you know that most of the great fortunes made in America included a healthy portfolio of real estate investments? It's true!

Yes, there was a real estate bubble and some people are in dire financial situations because they became overextended. In many cases, these were people who were "flipping" real estate and trying to make money on the difference between the purchase price and the upswing in real estate values in the 2003-2008 period. Many of these people got burned.

Others, however, who invested for the long term have done very, very well indeed. Rather than trying to make a quick hit by flipping, these investors took the longer view. They found good tenants and rented their properties for a nice profit each month. Like every business, they probably found that real estate rentals have some ups and downs, but in the long run most of these people have made out very well -- certainly better than stock market investors given the same time period.

My understanding from various property managers with whom I am acquainted is that right now is a great time to own investment property because the demand for nice, clean single family homes and apartments is very high. A lot of people are losing their homes to foreclosure and short sales. Despite this, those people still need a place to live and have reasonable incomes to cover the rental costs. Consequently, this is a good time to own rental property.

If you have had it with Wall Street, why not talk to a real estate agent who knows a thing or two about property as an investment? This might be just the approach to help you recover that lost nest egg.

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Does Anybody At Citizens' Have A Lick Of Sense?

2011-07-28T05:33:00.000-07:00

Everybody who reads this blogsite knows that I stay far, far, far away from political commentary. I write about real estate and marketing, and that's about it. I don't even talk politics with my friends ... or religion.

Until now.

The bureaucrats in Tallahassee who operate Citizens' Property Insurance must not be able to generate a clear thought between them. Or, perhaps they just don't give a rat's pahookey about property owners or economic recovery in this state.

I'm sure by now you have heard about the new proposal to increase sinkhole insurance premiums. The news broke on Monday of this week. The average premium increase statewide will be some 429 percent. That proposal was unanimously approved Wednesday by the board that runs Citizens'.

If approved, average sinkhole rates will jump in Tampa from $156 to $3,651 annually. In Pasco County, from $1,270 to $3,598. In Hernando County, from $1,356 to $5,734. Those figures are courtesy of the St. Pete Times; I'm not sure how they calculated them but I assume they are correct.

Don't worry too much about paying these increases. Citizens' is going to make it easy on homeowners. Citizens' CFO, Sharon Binnun, told the board that the agency is working to develop plans so policyholders can pay their sinkhole premiums quarterly or even semiannually. How kind! It will be like getting skinned with a sharper knife.

They're supposed to have some hearings about this increase in Tallahassee during the coming weeks. I assume the public will have a chance to talk. If so, I'm sure policymakers will get an earful. Somehow, I think they better rent a very large hall.

Lest I forget to mention it, these sinkhole increases are on top of the 8.8 percent statewide average premium increase already scheduled for non-sinkhole coverage.

Look, I realize Citizens' lost a lot of money on sinkhole claims last year ... they brought in $32-million in premiums and paid out $245-million in claims. Sure, something has to be done about that kind of financial loss and it can't be allowed to continue. No argument.

But for heaven's sake, does Citizens' have to recover all the loss in one year?

And has anybody at Citizens' given a single thought to the negative impact such premium increases will have on the struggling real estate recovery in this state?

Most financially responsible people buy as much house as they can reasonably afford. That means they are okay financially as long as they do not suffer some kind of financial setback. Raising these sinkhole premiums is just another form of financial setback for many of these homeowners. Just look at the amounts of these increases! Thousands of dollars per year for Pete's sake! Where are people going to find the extra money to pay those higher premiums?

And if they can't pay the premium, what then? I guess foreclosure is the ultimate answer. After all, their mortgage company will likely require the sinkhole insurance be kept in force or the mortgage will be cancelled. So what then? Well, we'll have a whole new bunch of foreclosed properties on the market.

And who in the world is going to buy the homes that have sinkhole insurance premiums costing additional thousands of dollars each year? Nobody. Why would anyone incur such an insurance obligation? So we may have a new bunch of foreclosures sitting vacant and driving down neighborhood appearance and further prolonging the drop in the value of real estate.

I wonder if anybody at Citizens' ever gave that any thought? Probably not. Like a lot of people, I suspect they can't see past their own set of bureaucratic problems.

Don't believe it can happen? Well, a lot of people didn't believe the real estate bubble would ever burst either. That's why they continued to pay supercharged prices for houses through 2006. Today, they are the short sale victims.

Citizens' needs to re-think these sinkhole premium increases. It's unrealistic and puts a terrible burden on middle-class homeowners at a time when these people have plenty to worry about.

In collecting increased premiums, perhaps Citizens' needs to spread out the recovery over a number of years.

Perhaps there needs to be some kind of easily affordable surcharge on all Citizens' policies so every policyholder contributes a little each month toward recovering the loss.

At the risk of hearing outrage from members of the Tea Party, perhaps there needs to be a tiny uptick in the state sales tax that is earmarked for sinkhole shortfalls -- kind of like the "Penny For Pinellas" program that funded so many good things in Pinellas County. Once the shortfall is made up, the tax increase could (and should) be withdrawn.

I don't have the answer, but I sure see the problem.

Now is the time when we need to stop listening to insurance actuaries and government bureaucrats who can't see past the requirements of their own departments and start using a little common sense and humanity in this matter. The great middle class is financially stressed right now. Adding increased sinkhole premiums serves only to compound the problem. Government, remember, is supposed to work for the people, not vice versa.

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Consider This Before Executing A Strategic Withdrawl

2011-07-23T11:11:00.000-07:00

I was listening to a special report on CNN on Saturday morning about the current status of real estate in the United States. Very interesting discussion. The panel of experts really were real estate experts this time.

One of the things they discussed was the concept of a Strategic Withdrawl (SW) from home ownership. Strategic Withdrawl is for people who are way underwater on their property; in other words, they owe a whole lot more on their house than it is worth ... perhaps they owe more on the house than it will ever be worth again.

Such people often feel that continuing to make the monthly mortgage payments on such a property is a waste of time and money, so they have an attorney arrange an SW for them. Arranging an SW is very complicated and needs to be done by an attorney, and even then it is a somewhat questionable way to become free of a property.

The panel pointed out that people who are upside down in a mortgage and arranging an SW are quite often the owners of luxury homes that they paid too much for when purchasing it. Apparently you don't see the owners of modestly priced homes contemplating an SW very often. Quite often, people doing an SW have healthy incomes and plenty of assets. They have good credit ratings and pay all their bills on time -- except for the upside-down mortgage.

Therein lies the root of the SW problem.

I'm not going to make comments on the moral, legal or ethical questions concerning a Strategic Withdrawl. That is not for me to decide. But there is a business question that needs to considered before you implement an SW with your attorney's help.

Since many of the people who do an SW have an otherwise stellar credit record, stopping payment on a mortgage is clearly a conscious decision on their part. Most likely, they could pay the mortgage as easily as they pay their other monthly debts. But they choose not to.

So when it comes time to face the music on this decision from a credit rating standpoint at some point in the future, these people should not be surprised to find out that they are treated very harshly by the credit reporting agencies. Punitively, as a matter of fact.

And why not?

After all, it's not as if they stopped paying their mortgage because of some financial setback that was no fault of their own ... like a lost job, medical bills, or some other money-related disaster. These people simply looked at the value of the property in today's market and decided that the monthly payments no longer matched up with the value of the property. So, they decided to stop paying the mortgage but continued to pay all their other debts. So, why shouldn't the mortgage companies and credit reporting agencies hit them hard? Seems perfectly logical to me.

I'm writing this for anyone out there who is considering the implementation of an SW. Despite what others may say about your future credit standing, don't be surprised if it is a long, long time before you ever get a loan at prevailing interest rates.

My advice? Before you do a Strategic Withdrawl from a piece of real estate, you need to do a lot of in-depth research into the short and long term consequences of such an action.

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June Was Tough On Real Estate In Tampa Bay

2011-07-21T04:49:00.000-07:00

After recently reporting that the median price for single family homes in Tampa Bay had jumped 18% in the first few months of 2011, today the St. Pete Times is saying that the median price fell 9% over June of last year.

According to the paper, sales volume fell 11% compared to a year ago, and the median home price dropped to $126,500 as compared to $138,400 from a year past in the Tampa Bay area.

Here are some other interesting factoids that were reported in the paper:

Buyers are having trouble getting mortgages or meeting the larger down payment requirements now required by lenders. This is making home purchase more difficult.

Many property sales are being cancelled prior to closing because of lower than contracted appraisals. If the property does not appraise properly, the mortgage is cancelled by the lender. About 16% of home sales were cancelled in June due to appraisal problems.

Normally, first time buyers make up about half of the market for home purchases, but that number has dropped to only 31% due to high unemployment and the reluctance of banks to lend.

Declining home values have made people feel less wealthy. This means they spend less when they buy a home, so the median price is falling.

Buyers are cancelling purchase plans at the last minute after reviewing their appraisals. Many times, these appraisals show that the value of the house was less than the contracted price.

Finally, the paper pointed out that across the country and in Florida, short sales and foreclosures represented about 30% of sales last month. Many foreclosures are being held up because of backlogged courts or lenders awaiting federal and state probes into various kinds of foreclosure practices.

All this combined to bring June's figures down. I guess all you can say is: "it is what it is".

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Bay Area Single Family Home Prices Up In First Half Of 2011

2011-07-13T03:06:00.000-07:00

The St. Petersburg Times has reported that the median price of single family homes has risen by 18 percent since the first of the year in the Tampa Bay area. The median price has moved from $107,500 in January to $127,000 in June in Pinellas, Pasco, Hillsborough, Hernando and Citrus Counties according to data from the Multiple Listing Service (MLS).

If we look at prices for only conventional sales (no short sales or foreclosure sales), single family homes sales increased by 8.5 percent during that same time period. The median price for conventional sales in the five-county area rose from $156,000 to $169,400.

This is pretty good news for home sellers, especially those who have wanted to sell but have withheld their home from the market waiting for better times. It appears that the market for single family homes in the Tampa Bay area may have finally bottomed out in the first half of 2011 and may be making a steady recovery. So, this may be the time to list and sell.

For buyers, this increase in median price should be an incentive to buy now before prices begin heating up even more. Right now, there are still good values in the market and buyers should act now to take advantage of them.

Remember, this data is for single family homes only and does not include condominiums, apartment buildings or commercial properties.

Happy House Hunting!

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Volume Up, Prices Down In Tampa Bay

2011-06-22T04:30:00.001-07:00

The St. Petersburg Times reported that sales of existing homes in Tampa Bay rose 6% from April to May, 2011. The median price, however, dropped from $121,400 to $120,200.

Sound familiar?

You know ... prices go down, volume goes up. Kind of has a familiar ring to it, doesn't it?

Nationally, existing home sales in May fell 3.8%. Lawrence Yun, the chief economist for the National Association of Realtors, blames the lending community for this drop in sales across the country. Yun believes homes sales are being held back because lenders are relying on overly restrictive loan underwriting standards. He also attributes reduced closings to rising gasoline prices and severe weather.

There may be something to what Yun says, but frankly, I think the more obvious reason for reduced real estate sales is unemployment. I'm not an economist, but it just seems to me that when you have over 9% of the work force unemployed, and heaven-only-knows how many people are underemployed or unsure if they will have a job tomorrow, well, people just don't buy real estate. You can't blame them!

Maybe sales will pick up next month. Keep your fingers crossed.

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Invest In Real Estate NOW!!!!

2011-06-11T05:39:00.000-07:00

About two weeks ago I received one of those unsolicited telephone calls from somebody who wanted to change my entire investment portfolio and guarantee me a 10% return by investing in the futures market.

"Sorry", I said, "but I'm investing in real estate from now on."

"Sure," says he, "that's about as liquid as concrete." At that point I hung up the phone. I realized that this guy was just another salesman and that any further conversation with him would indeed be about as productive as talking to concrete.

If you are an investor, I would suggest you start (or continue) investing in real estate. The reason? Just do a quick scan of next Monday's Investor's Business Daily(IBD). (I get Monday's IBD on Saturday. It helps me foretell the future.)

Here's what Monday's IBD will tell you about your investments in stocks, bonds, mutual funds, futures etc. etc. etc.

Under IBD's headline "Another Week, Another Loss" you will learn that:

The New York Stock Exchange sank 1.6% last week

The Nasdaq dropped 1.5% last week

The S&P 500 fell 1.4% last week

Oil fell below $100 per barrel

Gold hit a 2-week low

Silver sank 3%

Treasury yields fell back below 3%.

I could go on and on with bad news from Wall Street -- and that's just from last week! No wonder they call the last 10 years the "lost decade" for investors. You can't make money with money anymore!

So, what are you supposed to do?

May I suggest you follow the "golden brick road" that many smart investors are now trodding and start buying investment property? This is the best time to be in the real estate market in many years because of all the short sales and bank foreclosures -- and things should continue looking up for the foreseeable future as more and more troubled homeowners face the loss of property due to the uncertainties of the current American economy. This enables you to purchase properties at very reasonable rates.

Remember this, people who lose homes still need a place to live. Consequently, the rental market is good right now and people are willing to pay well for nice rentals. Many of those being forced out of their homes are families, so buying larger single family homes makes a sound investment for you. If you don't want the headaches associated with managing property, turn it over to a reasonably priced professional property manager.

How much money can you make now in rental properties? I don't know, but some people enjoy much better returns on their real estate than they do in "traditional" investments. Look, let's say you've got a $50,000 CD paying you what, about 1.2% per month. That comes out to about $50 per month. Go purchase a single family short sale for $50,000 -- pay cash for it if you want -- and rent it for the going rate in your area. I'll bet dollars to donuts you will rent it for more than the $50 per month the bank is paying you on that CD!

Let's say you had that same $50,000 in Nasdaq stocks. You had a nice little gain going until last Friday. On Friday, Nasdaq fell 1.5%. All the gain that you had made for 2011 was lost. All of it! Six months of invested profits are now gone, gone, gone. Of course, you get to start all over again on Monday when the market opens -- unless it falls again, which is very likely given the situation in Europe and China.

Here's all I'm suggesting: If you're an investor it's time for you to give today's real estate opportunities a serious look. Don't look for the value of the property to go up like it did a few years ago. Those days are over. Instead, look for your investment to pay you rental income on a regular basis. Think of that rental income as your dividend and enjoy those profits.

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Lawrence Yun Says Tampa Bay Housing Recovery Is A Year Behind Nation

2011-06-10T04:51:00.000-07:00

Lawrence Yun is a genuine big shot. No, I mean it. Yun is the real deal. He is the chief economist for the National Association of Realtors (NAR), and when Yun speaks people listen -- or they had better.

Yesterday, Yun spoke to a group of real estate agents at the Greater Tampa Association of Realtors. Somehow, my invitation to this engagement must have gotten lost in the mail. Your's too?

Well, here's what Yun said. Yun told the assemblage that the Tampa Bay area's real estate recovery is running about a year behind such cities as Miami, Phoenix and Las Vegas. He pointed out that right now, we have enjoyed a 14.2% jump in real estate sales volume compared to the same time last year, and that we now have a housing inventory of 6.2 months which is down from the 20 months of housing inventory that we had a couple of years ago. When you have about a 6-month supply of homes in inventory you have a market that is pretty much stable.

Sellers, however, will not be entirely happy with Mr. Yun's additional comments. Despite the increase in volume, Yun pointed out that prices here continue to slide. In fact, he said that prices in Tampa Bay have fallen an additional 7% in the last year. So, that typical $200,000 house that you bought last year is probably worth about $186,000 now.

Yun said that Florida's real estate recovery should begin picking up. He stressed the fact that even though Florida's economy was pretty uninspiring, it was still Florida. He predicted that retiring baby boomers will return in the next few years to drive sales volume and prices upward as people seek warmer winters in the sunshine state.

There is one fly in Yun's prediction, however, and it looms large in the recovery picture.

The federal government is apparently considering "an initiative" which will require borrowers to pay more cash up front when obtaining the best mortgages and interest rates.

Borrowers who don't meet certain income-to-debt ratios might be required to make a full 20% down payment. This initiative, aimed at helping the country avoid another foreclosure crises, could be finalized in about a year.

If this initiative becomes law, some 60% of all potential real estate buyers would be disqualified from obtaining a mortgage with the best and lowest interest rates. This will make monthly mortgage payments higher and will likely slow down the real estate recovery.

Anyway, now you know what Lawrence Yun was doing in town yesterday.

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April & May Real Estate Sales: Lots of Volume

2011-06-08T06:51:00.001-07:00

I didn't bother to write a sales update for April because the newspapers seemed to be spreading a lot of ink letting everybody know that real estate sales volume in Pinellas County and the entire Tampa Bay area was pretty darn good. Why should I repeat what they are writing?

However, the paper does not seem to have gotten out the word that May was a fairly good month as well.

The Absorption Rate (AR) for May for single family homes was 15.3% as compared to April's 15.4%. See what I mean? Pretty close. For condos, the AR for May was 11.9% as compared to April's 13.2%. That's pretty close, too!

Here's the thing you need to keep in mind: these are measurements of VOLUME. If you examine the VALUE of the homes and condos being sold you will see that there are a lot of sales of properties priced under $200,000 and that 64% of the sales are to cash buyers.

So, what does that mean? Simply this. Most of these sales are being made to investors. The tip off? What's getting sold are a lot of lower priced homes -- probably short sales and foreclosures -- and they are being purchased as cash investments. What's not selling so well? Why, all those higher priced properties. The percentage of properties priced above $300,000 falls off significantly with each incremental increase in price. So, if you've got a luxury home on the beach or golf course and you keep reading about how sales have gotten red hot in Pinellas County, it's probably very frustrating for you just to open the pages of the newspaper because your property remains unsold. By the way, there is a solution to your problem: Lower The Price!

Single Family Homes

In May, there were 4,916 single family homes listed in the MLS. Of those, 754 were sold during May. That's pretty good. The median selling price was $117,000. That is a 15.7% drop in price compared to May of 2010. See what I mean ... good volume but prices continue to slide downward.

Condominiums

There were 4,720 condos in the MLS system for May, and 562 condos were sold that month. Condo sellers have to feel good about that. I mean, back in 2009 we had months where fewer than 200 condos sold. So, condo volume is headed upward. Condo prices, however, are still headed downward. The median condo price for May was $79,400 as compared to $118,800 for May of last year. That's a drop of 33.2%.

So what we're seeing in Pinellas County is good activity among cash investors, a reduction in listing inventory, and probably some frustration among sellers of luxury homes. All in all, however, I think things are looking up. Remember, we have to sell off this inventory of distressed property before we can breathe some real life into the real estate markets. So, keep your chin up!

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There's No Place Like Home To Buy A Home

2011-04-27T05:26:00.001-07:00

Real estate agents and brokers, investment advisers, mortgage experts and others have been saying for a long time that now is a great time to buy a home in the Tampa Bay area.

Now, Fortune magazine has ranked Tampa Bay as the fifth best place in America to buy a home. Tampa Bay is placed between Cleveland (fourth) and Las Vegas (sixth). Atlanta topped the list, followed by Orlando and Jacksonville was ranked seventh.

The magazine said the reason to buy now was due to the drop in residential construction since the market peaked in 2006, and the overall decline in housing prices. Fortune also said that it expects retiring baby boomers to choose Florida as a retirement destination, thus fueling a resurgence in the housing market.

So, all you buyers who are on the fence about buying a home in Tampa Bay need to take note: This may be the time!

Tampa Bay Area May Have Hit Bottom!

2011-04-20T05:56:00.000-07:00

The St. Petersburg Times today released an article in which an economist with Wells Fargo, Mark Vitner, stated that it is possible that the real estate market in Tampa Bay may have finally bottomed out.

Vitner said the recent surge in sales can be attributed to low prices and mortgage interest rates, an improving local economy, and to investors searching for bargains.

According to the Times, 4,296 homes were sold during March in Pinellas, Pasco and Hillsborough Counties as compared to 3,258 in February. That's a sales increase of 32% in just one month in the three counties. Moreover, the newspaper reported that sales volume has increased 14% in the three counties this March compared to March 2010.

So, what does this mean for real estate buyers?

Perhaps Vitner's words answer that question best. He said "We're either at or very close to the bottom of the market. It would be crazy to wait for the last nickel to fall." If I interpret that correctly, he's saying that if you are a buyer looking for the best time to buy, this is it.

Readers of this blogsite have read many times that it is my opinion that trying to anticipate the absolute bottom of the real estate market is impossible. There are simply too many variables and nobody has all the data. Suffice it to say that we are at the point where buyers need to act now before the market starts to shift away from their current advantage. The housing market is at or near a six month supply of inventory for sale. Six months supply is considered a market in equilibrium, meaning there is no great advantage for either buyer or seller. Obviously, this means we must be at or near the bottom of the market since neither party to a transaction has an overwhelming advantage at the present time.

My suggestion? If you're a buyer now is the time to act. Prices probably will not go much lower, but inventory will start to shrink. As the inventory shrinks, prices will go up. Act now!

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March Was A Good Month For Pinellas Real Estate Sales

2011-04-16T05:11:00.000-07:00

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!

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Stop Doing Open Houses? No Chance!

2011-04-09T05:55:00.000-07:00

In case you missed it, the St. Petersburg Times ran an article in the April 9th issue in which it says that many real estate agents are no longer using open houses as a means to help market properties for sale. The paper says that the open house is past its time as more and more buyers shop by computer and smart phone.

The paper then goes on to quote some real estate agents who blame the reduced number of open houses on everything from sellers who don't want strangers walking around in their homes to agent safety concerns. Some agents, the paper says, only hold open houses if the seller requests it.

Well, I want you to know that I happen to believe very strongly in open houses. I don't think it is an outdated marketing tactic. I think that for many, many home shoppers, seeing the property "live and in color" is a lot better than looking at some photos on a computer screen. And don't get the idea that attendance at open houses is falling off. Far from it. Recent open houses that I have held -- and those held by my associates -- have been very well attended and usually by people who are in a position to make the purchase if they are so inclined.

For many years, I have been hearing that agents only hold open houses so they can attract more business for themselves from other buyers or from people who stop by but also need to sell their house. Sure, there probably are some agents who use open houses to feather their own nest. But for the most part, real estate agents who hold houses open for inspection do so in the hope of finding a buyer for that particular house. If any other business comes from the open house, fine, but for the most part they want to sell the house they are holding open.

Here's something else that real estate agents know. If you are trying to sell a condo in a retirement community, the open house might be the agent's best marketing tool. The reason? Referral sales. Many sales in retirement condos are made because some current resident influenced a friend or family member to move to that same community so they can be nearby and help each other. They often find the condo that they recommend because it was held open by a savvy real estate agent. Those older folks don't generally spend their days looking at listings on the internet, but they will visit an open house.

For all the years that I've been around real estate, I've heard agents make all kinds of arguments for not doing open houses. In reality, the reason they don't do open houses is because they don't want to give up their Sunday afternoons.

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Help Coming To Avoid Foreclosure

2011-04-05T04:32:00.000-07:00

A $1-billion federal program could help an estimated 40,000 Florida residents from losing their homes to foreclosure.

The Hardest Hit Fund, offered through the Florida Housing Finance Corporation, is due to roll out statewide in a few weeks. There are two forms of help offered through the fund.

The first option provides up to six months of mortgage assistance to unemployed or underemployed homeowners up to a maximum of $12,000. Homeowners must pay 25% of their monthly income or $70 toward their home payment.

The second option will provide up to $6,000 to make a delinquent mortgage current if the homeowner has returned to work or is recovering from underemployment.

To qualify for this program, the homeowner can be no more than 180 days behind on his mortgage payment, must have a monthly housing debt that is more than 31% of gross monthly income, doesn't have a conviction for a mortgage related felony or a bankruptcy that has not been discharged, doesn't have more than one property other than their primary residence, and their fist mortgage must have originated on or before January 1, 2009 and was not seller financed. For more information on this program, go to http://www.flhardesthithelp.org/.

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A Question For The Bankers

2011-03-28T04:46:00.000-07:00

I read something in today's St. Petersburg Times about deficiency judgements that got me thinking.

First, let me explain what a deficiency judgement is. A deficiency is the difference between the selling price of a piece of real estate and it's mortgage amount at the time of the sale.

So, if you had a mortgage for $100,000 and sold the house for $75,000, the deficiency would be $25,000. If the bank wanted to, they could go to court and get a deficiency judgement for the $25,000 shortfall. They could then garner your wages, attach things of value that you own and do all manner of other things to collect the money from you.

Deficiency judgements are becoming more common in Florida and other states as lenders try to recoup as much as possible from short sales and foreclosures. It's perfectly legal and I have no real problem with financial institutions pursuing the money.

Recently, however, I've heard of deficiency judgements turning into investment instruments. I didn't actually think anybody would stoop to such a thing, but apparently I was wrong and the St. Petersburg Times mentioned it in an article in Monday's newspaper about deficiency judgements and foreclosures. I guess trying to make a profit from other people's misfortune is par for the course these days.

The paper reported that there is a growing resale market for deficiency judgements. The debt is being packaged and sold to investors in much the same way that mortgages once were. The paper reports that a collection agency bought some $18-million worth of deficiency claims from one lender for a mere $130,000. The buyers are hoping that they can collect on enough of these debts to turn a profit over time, and the bank seems to be willing to settle quickly for cents-on-the-dollar.

Here's the question that comes to my mind about this kind of procedure: If the bank is willing to accept pennies-on-the-dollar when selling the deficiency to the investor, why not do it much earlier in the process and offer to sell the deficiency to the original debtor for a few cents on the dollar? That way the debtor could clear his financial problems, the bank would have all the money they would have gotten from selling to some third party, and everybody could live happily ever after.

Of course, I'm not a financial genius so my grocery store arithmetic approach to solving complex financial and legal matters probably doesn't hold here. But I wish some banker could take the time to explain why it wouldn't. Seems to me like it's kind of a win-win for all parties -- except maybe the investors.

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What Makes A Good Offer On Distressed Property?

2011-03-20T06:43:00.002-07:00

Let me get real direct with the central theme of this story: What constitutes a good offer on a distressed property?

Well, first of all, what is a distressed property? For the purposes of this blog, a distressed property is either a short sale or a bank foreclosure.

So, how much should you offer on such properties?

Fortunately, the Pinellas Board of Realtors (PRO) has a report every month called "Distressed Property Trends Monthly Market Activity Report". It's full of all kinds of charts and graphs that report on sales of short sales and foreclosures in this area, and that data holds the key to answering the question of how much to offer to make a successful offer on a distressed property.

One of the reports is called the "List Price to Sales Price Ratio". This is nothing more than a graph expressing the percentage of the asking price that properties sold for in that month. For example, if a house was listed at $100,000 and sold for $50,000, the ratio would be 50%.

In February of 2011, the sales price ratio for a short sale in this area was 92%, meaning that on average, short sales were selling for 92% of their asking price. In January, they were selling for 93% of asking price. Overall, the ratio for the past six to eight months or so has been hovering in the 91% to 93% range.

For foreclosure properties, the February ratio was 95%. In January it was 94%. Last October it was 100% and in June of 2010 it stood at 102%. Apparently foreclosures bring a higher percentage of asking price than do short sales, and I think buying them is a more competitive process than buying a short sale.

Just for the sake of comparison, non-distressed properties have been selling at a ratio of 91% to 93% for the past year or so.

So, if you're thinking about buying property in the distressed realm, it might be a good idea to keep these ratios in mind and use them as a guide when preparing your offer. The buyer who offers well below the asking price may occasionally get a property, but for the most part the bankers feel like they have already discounted these properties and want to get pretty close to their asking price. At least that's what the ratios seem to indicate.

Happy House Hunting!

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2011-03-20T06:43:00.001-07:00

Is Stability Returning To Real Estate?

2011-03-11T03:36:00.000-08:00

The sales figures for February in Pinellas County real estate show the continuation of similar numbers from the previous three months. Maybe the market is getting a bit more stable.

Let's take a look at the Absorption Rate (AR) for February. For single family homes, the AR for February was 10.2%. That's an improvement over January's 9.3% and just a bit less than December's 11.9% figure. Still, those numbers are pretty similar taken as a whole.

The same can be said for condominiums. The AR for February was 8.9%. In January it was 6.9% and in December the AR was 9.4%. Really, this shows some pretty similar market activity for the past three months.

Single Family Homes

There were 6,153 single family homes listed in the MLS for February. This is down somewhat from January's 6,414 listed properties. Some 629 single family homes were sold during February as compared to January's 595 sales. So, listings were down but sales were up.

The median price for a single family home in February was $100,000. In February 2010 it was $130,000, a drop in median price of 23.1%. I think that when you have a drop in median price like that, it is a sign that investors are very active and they are probably buying a lot of distress properties to be used as rental units or for other forms of real estate investment activity. I would like to know what the median price was if you took all the distressed properties out of the data and we looked at only arm's length transactions. I'll bet the median would be higher.

Condominiums

The number of condos listed in the MLS in February was 5,073. In January, 5,192 condos were in the MLS system. Of these, some 452 condos were sold in February, a nice increase in sales volume compared to January's 360 condo sales. Just as with single family homes, the number of listed condos is lower and the number of condos sold increased in February.

The median price of a condo in Pinellas County in February of this year was $78,800. This is down 28.4% from February of 2010 when the median price was $110,000.

When you look at all these numbers and compare them over a two or three month period, it seems to me like the real estate market has become kind of stable. I don't know about you, but after all these months of falling prices and reduced volume, it's kind of refreshing to see these figures beginning to show some kind of stability. I suspect we have to get stable before we can see any appreciable improvement.

Happy Selling!

=30=

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

2011-02-23T05:46:00.000-08:00

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

2011-02-16T03:24:00.000-08:00

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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Good Real Estate Volume For December 2010

2011-01-23T03:55:00.000-08:00

The month of December, 2010 saw some improved volume numbers for Pinellas County real estate sales, but median prices continue to fall.

The absorption rate (AR), which is calculated by dividing the total number of units sold for the month by the total number of properties listed in the MLS, went up for both single family homes and condominiums.

The AR for single family homes during December moved up to 11.9% as compared to November's 8.3% figure. This means that there is an inventory backlog of single family homes sufficient for 8.4 months of selling activity.

The AR for condominiums stood at 9.4% for December as compared to 6.3% in November. So, we have an inventory backlog for condos at 10.6 months.

Single Family Home Sales Data

According to MLS data, there were 6,327 single family homes listed for sale in December. This is a decrease from November's inventory of 6,540. Some of this reduction in inventory is probably related to increased sales activity during the month. In December, 754 single family homes were sold in Pinellas -- one of the best figures in recent months. By comparison, only 542 were sold in November, an increase of 212 sales. Let's hope this trend continues!

The median price during December was $125,000 compared to $140,000 in December of 2009, a decrease of 10.7%.

Condominium Sales Data

Condos did well during December as well. There were 5,205 condos in the MLS in December as compared to 5,422 in November. Condo sales looked better as 489 condos were sold during December as compared to only 342 in November. Of course, this increase in sales can surely be attributed to the seasonal nature of condo sales in Pinellas County.

The median price of condos fell substantially compared to the same period last year. The December 2010 median price was $101,000 but in December of 2009 it was a much higher $124,900. That's a drop in median price of 19.1% year over year for condos.

If you were to chart prices on a monthly basis you would see that prices for 2010 were pretty flat for single family homes. The median price in January was $130,000; it moved up and down a little every month during the year but ended at $125,000. I'd say prices for single family homes were pretty flat this year taken as a whole. For condos, prices are still fluctuating. In January the median price for a condo in Pinellas County was $113,000 but in December it had fallen to $101,000. Maybe condo prices will start to stabilize a bit next year.

So, has the real estate market reached bottom? Well, I think not. Overall, the trends are still headed downward from a price viewpoint, but I think it's falling at a slower rate. On the upside, sales volume seems to be headed upward and that's a good thing. Also, we're seeing some improved employment numbers for the county and that's an important measure of future real estate activity.

Let's hope 2011 is better for everyone!

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The 4-P's Of Selling In Today's Market

2011-01-13T03:34:00.000-08:00

There's no doubt about it. Selling today is a lot more complex than it was six to eight years ago. Sellers need to take a little different view of the process and practice what I like to call the 4-P's of successful selling.

1. Positive. Selling a home can be a stressful undertaking often complicated by life changing events. The best way to get through such a situation is to keep a positive mental outlook about the sale and the underlying reasons for the sale. In other words, if there is a silver lining to be found in the situation, find it and keep it uppermost in your mind throughout the selling process.

2. Pro-Active. This is just my view of things, but I believe sellers and their listing agents need to be pro-active in the marketing and sale of the property. You can't just put a sign in the yard, an ad in the newspaper, drop it in the local MLS and expect somebody to come along and buy the property. Sellers and agents need to actively market the property, they need to follow-up with agents and buyers after showings, and they need to negotiate every offer to find a win-win situation if one can be found. You can't do this sitting on the couch watching the afternoon soaps.

3. Patience. Listen to the evening news or read the daily newspaper. You will quickly learn that the country is in a deep and prolonged recession and the recovery is coming very slowly. Many people are unemployed or under-employed. Mortgages, once easily obtained, now appear to be much more difficult to secure. In this kind of economic environment, fewer people can qualify to buy a home. So, given this set of circumstances, sellers need to recognize that selling a property will likely take longer than it has in the past. This means that sellers will need to be more patient with the selling process and their agent's efforts on their behalf.

4. Price. Today's buyers are looking for bargains. Period. If your property does not carry a bargain price, it is unlikely that it will sell. If you really want to sell the property you have to price it at an appealing price for today's bargain-hunting buyers. Moreover, if the property has been on the market for more than 60 days (some would argue even less time) and you have not received an offer, that is the market talking to you. It is saying that they are not interested in your property at that price. So, you need to adjust your price downward until it becomes a bargain. In this effort, time is not on the seller's side. In an economy where real estate prices continue to fall, the longer the property remains on the market the less it will eventually sell for. Just keep that in mind when your agent suggests a price adjustment.

There you have it. Positive attitude. Pro-active undertakings. Patience. Price. As I see it, these are the 4-P's to success in today's market for sellers.

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Home Prices Fall Nationwide

2010-12-29T05:00:00.000-08:00

Seems like 2010 has been a never-ending year of bad news for real estate. Let's hope that the new year brings in some good news for a change.

The boys at Standard & Poor's/Case-Shiller have just reported that home prices fell 1.3 percent in October from September. Every city in the report's 20-city index experienced a drop in prices. Atlanta fell the most; prices there dropped 2.9 percent from a month earlier. Washington, D.C. dropped 0.2 percent after posting six consecutive months of increases. (How come prices inside the Beltway went up but they went down around the rest of the country during those six months? Perhaps we had to bail out our politicians so those who lost in the mid-term elections could still sell their Washington property at a profit.)

Locally, Tampa Bay area prices fell another 0.9 percent from September to October. Sales volume, however, appears to be increasing. Sales of existing homes rose 7 percent from October to November according to the Florida Realtors. Tampa Bay sold 2,060 homes in November compared to 1,923 in October. The median home price was $125,000 for the region.

Don't know about you but I'm ready for two things: first, some good real estate news and second, some warmer temperatures.

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Real Estate In November Looked A Lot Like October

2010-12-19T03:31:00.000-08:00

I wish I had some kind of eye-popping news to share with everybody about real estate sales in Pinellas County for November, but I don't. It was pretty flat. In fact, if you read on, you will see that November looks very similar to October.

Let's start as always with the Absorption Rate (AR) for November. As you know, the AR is calculated by dividing the number of units sold in the month by the total number of units in the MLS. The result is your inventory turn.

For single family homes in November, the AR moved up a little to 8.3% from October's 7.9%. So, the average home will require about 12 months to be sold in Pinellas County.

For condominiums, the November AR moved down to 6.3% for November from October's 6.6%. This means condos will average almost 16 months on the market before selling.

Single Family Stats

During November, there were 6,540 single family homes listed for sale in the MLS system as compared to October's 6,666. So, inventory dropped a little in the last 30 days, but the reason probably had more to do with sellers removing homes from the market than due to an upsurge in sales volume. During November, only 542 single family homes were sold compared to October's 528 sales. So, sales volume was pretty much stagnant month to month.

From a price standpoint, if we compare November 2010 to November of 2009 we find that prices continued to fall. The median price for November of this year was $128,000 as compared to last November's median price of $146,500. That's a drop of 12.6%.

By the way, for those of you who keep track of such things, the median sales price for a single family home in November of 2005 was $259,000. So, if you're a seller, you might want to keep that kind of info in mind when you are setting your sales price and negotiating with a buyer. As they say, prices ain't what they used to be!

Condo Sales

Condos continue to lag the market despite the fact that so many lovely units are priced so low. Demand just seems to be down for this kind of lifestyle, especially in the communities that restrict residence to those over the age of 55. St. Petersburg is no longer the Mecca for retirees because so many seniors are opting for the new communities throughout Florida and for the tried-n-true retirement areas of Miami. Additionally, many of those who want to buy condos must sell their family home first, and in many cases that is proving to be a difficult task given the overall state of the economy. So, the condo market locally is very slow and prices in such communities are suffering due to lack of demand and the inability of many would-be buyers to make a purchase.

How slow is the condo market?

Well, in November there were 5,422 condos in the MLS in Pinellas County -- about the same as October's 5,484 units. Of those, only 342 were sold during November and only 362 in October. So, that's a pretty flat market and it is not setting any sales records.

Condo prices are continuing to fall. The median selling price in Pinellas was $107,500 for November 2010, a drop of 7.3% from November 2009's median price of $116,000.

By the way, the median condo price in November 2005 was a robust $177,000. Quite a large drop in only five years.

So, that's the way things are with only one month left in 2010. Hopefully the figures will be better in the year's final 30 days.

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Investors: Change Strategy And Buy Now

2010-12-10T04:41:00.000-08:00

Despite all the bad news about real estate, I think there is still money to be made for real estate investors in today's market.

In order to make it, you have to shift your strategy from the one you had in 2002 to the one you need in 2011.

Back in the days of real estate's "great run-up", most of the property investors I worked with -- and this included myself -- were primarily concerned with property appreciation. They treated real estate like a stock investment. They wanted the value of the property to go up (like a stock) and treated rent as a little added bonus (like a dividend). As long as you broke even on your expenses from the rent, well, everything was okay because the building was appreciating so rapidly. When you sold the building, you stood to make a handsome profit; or so the prevailing reasoning for many investors at that time.

If you bought the property by the early 2000's and sold it by the end of 2006, you probably made out pretty good based on the stock market approach to investing in real estate.

The thing of it is, we are now living in the days of the "great run-down" and you can no longer treat real estate like a commodity. You have to shift out of that stock-market mentality and adjust your money-making strategy to reflect the way the real estate world is today.

This means your strategy has focus on your rents, not on property appreciation.

For the foreseeable future, the market value of real estate is likely going to continue to fall or, at best, become pretty flat. So, the wise investor will shift his goals to making money every month from the collection of rent payments. You have to make certain that your rent rates cover all the costs of owning and operating the building while providing a profit to you for your risk as the owner and your role as the property manager.

In other words, you have to start acting like a real landlord, not a building owner. And, you have to start operating your investment property like it was a business, not a stock investment or hobby. In addition, you have to begin dealing with tenants in a much more businesslike manner, and this includes collecting rents on time and, if necessary, removing tenants who fail to make timely and full payments.

Now, I know that some of you are going to be reluctant to run your rental property like a real business. That's okay. That's why there are companies out there who will do it for you. They are called Property Managers, and for a percentage of the monthly rent they will do virtually everything to make sure your property is operating the way it should and making money the way you want it to. Essentially, you can arrange things with your property manager so that your only involvement is to take your check to the bank at the end of the month -- heck, you can probably even have that direct deposited to your account so you don't have to drive to the bank!

In the local MLS right now, I see dozens of good looking, well-maintained, properly priced duplexes, triplexes, quads and small apartment buildings all over Tampa Bay. If you are new to investing in real estate, owning one of these smaller properties is a great way to get your feet wet and find out if you like being a landlord. Also, buying a single family home in a nice neighborhood is also a great way to get into the investment end of owning real estate. With so many short sales and foreclosures in today's market, prices for many of these properties make them very attractive from an investor viewpoint. So, you might want to give it a try without risking your entire future.

Just remember this: The strategy now is to make a profit every month from your rent. If the building appreciates in value sometime in the future, that's just icing on the cake.

-30-

Bay Area Real Estate Prices Continue To Fall

2010-12-08T06:29:00.001-08:00

Let's start with a look at the big picture. Nationally, home values dropped 0.6% from September to October, 2010 according to a story in today's St. Petersburg Times. The Times quotes Zillow.com as the company that tracks the figures.

In Tampa Bay, home prices dropped even more than the national average. Here, prices fell 0.9% from September to October according to Zillow. So, if you had a house, condo or apartment building that was worth $500,000 on September 1st, in just 30 days it's value fell to $495,500, a $4,500 loss in a month's time.

Let's let a little more time pass. Between the second and third quarters of this year, property values in the Tampa Bay area dropped 2.4% in 90 days. So, if you had a property worth $500,000 at the beginning of April, at the end of June it would be worth only $488,000, a loss of $12,000 in 90 days.

Let's say you've been trying to sell your property for a year -- from October 2009 to October 2010. During that 12 month period, property values here fell 9.2%. That same $500,000 property would now be worth only $454,000, a $46,000 loss in one year.

The real estate market turned south in the summer of 2006. That's when I started tracking the market in the hope that I might predict the next upturn. During that 4-1/2 year period, experts say that property values in Tampa Bay have declined by 46.3%. So, we take that same $500,000 property from 2006 and bring it up to today's values, and it is now worth $268,500; that's a loss of $231,500 in 54 months.

These kinds of losses are why real estate agents are telling sellers that the longer a property remains on the market, the less it is worth. According to Zillow, we have had 52 consecutive months of declining property values. The monthly declines have grown in each of the past six months, and are now at their highest point since March 2009. That means the market is not getting better, it is getting worse.

So, what can a seller do about this in order to get his property sold?

First, price your property to sell in 30 days. Buyers today are purchasing only bargain priced properties. To be a bargain, the property needs to be priced about 10% under its market value as determined either by a CMA prepared by a professional real estate agent or by an appraisal prepared by a certified appraiser. If your property does not sell in thirty days, re-price it but make sure you get down under market value.

Second, give the property a good clean-up. Even bargain hunters want to make sure that the property they are buying was well maintained and is in good condition. So, add some paint here and clean up the yard there. Get the place looking tip-top. That will help your property sell faster and probably for a little better price.

Third, negotiate every offer. Even if you don't like the price and terms being offered, don't just say "no". Say "maybe". Go back to every prospective buyer with a counter-offer and see if you can hammer something out. Remember, the buyer is looking for a deal and you need to make it look like you're giving him one.

If you've been reading this blog regularly you probably remember my comment that there are only two reasons why a property does not sell. When a property does not sell in a reasonable period of time, it is either overpriced or it is undermarketed. Most professional real estate agents do a pretty good job of marketing property. So if the property is not selling, the only other place to look is the price. The only person who controls the asking price of the property is the owner.

Real estate agents don't set prices, they respond to market conditions and can pretty much tell a seller what a property is worth based on current market prices. Ultimately, however, the owner sets the asking price for the house. While the owner sets the asking price, it is the buyer who determines the selling price. An owner can ask for the moon, but may have to settle for green cheese.

One final comment about prices here in the St. Petersburg area: During the 30 days from September to October of this year, Zillow reports that prices in the City of St. Petersburg fell 2.2%. That is the largest monthly dip found in all the major cities in this area. So, how long are you going to wait to bring your property into line with market conditions? Remember, the longer you wait, the less it will sell for. That's why they call it a declining market!

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Locally, Home Sales Continue To Fall

2010-11-24T03:44:00.000-08:00

Dadgumit! I was hoping the St. Pete Times would ignore these latest statistics on home sales, but they published them anyway. I guess it is news. And they are a newspaper.

It just seems like every time we read news about bad activity in the local real estate market it gives buyers a reason to wait for even lower prices, and gives sellers a reason not to list until the market starts to improve. That's a vicious circle.

I've had this info in my hip pocket for a couple of days, but here's the news and it ain't happy:

In Tampa Bay, home sales dropped 25-percent compared to October 2009.
In Tampa Bay, the median sales price dropped another 2-percent compared to October 2009. It now stands at a lowly $137,900 -- great if you're a buyer!
Throughout Florida, homes sales fell 21-percent compared to October 2009.
Throughout Florida, the median price retreated another 3-percent to only $136,600.

In the thirty days from September to October 2009, home sales across Florida dropped 12-percent. Condo sales for the same thirty days fell 9-percent.

How come?

Three reasons:

Employment, or the lack thereof. People just don't buy real estate when they don't have a steady job, are worried that their job may disappear, or feel uncertain about the continuance of their company.
Tax credits. The first time home buyer tax credit program disappeared several months ago. Those credits acted as a stimulus and a lot of people bought earlier than they might have. Those credits are now gone and with them the impetus to purchase real estate.
Credit. Availability of credit is the life-blood of the real estate industry. Simply stated, it's hard to get a mortgage today unless the stars line-up perfectly for you. There just does not seem to be enough available credit, especially for those who may have a glitch or two in their credit history.

Here's what is really discouraging. A fellow named Sean Snaith, an economist over at the University of Central Florida, told the St. Pete Times that he did not think the real estate situation was going to improve until the employment and credit pictures improve. If he's right, this kind of real estate market could be with us for quite a long time -- even longer than previously anticiapted based on the slow pace of economic recovery and job growth in this country and Florida.

So, if I was a buyer, I'd buy now. Those median prices indicate that prices are very low, and that means there are a lot of great deals in the marketplace today if you can get the mortgage.

If is was a seller, I'd sell now. If prices continue to fall, every day that passes your house is worth less. Sell it now for what you can. The longer you wait, the less you'll probably get.

Ah well ... Happy Thanksgiving everybody!

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What Buyers Need To Do When Working With A Real Estate Agent

2010-11-20T11:28:00.000-08:00

There are few things I like more than sitting in on a round table discussion with a bunch of wise real estate agents discussing a specific, open-ended topic. The only thing I like better is going one-on-one with a wise real estate agent regarding the same topic at some really good restaurant, like Pepin's in St. Petersburg.

Recently, I had an opportunity to sit in on both a round-table meeting and a one-on-one. The topic was what buyers need to do and not do when working with a real estate agent. I received some very interesting buyer guidelines from a group of agents at Coldwell Banker's Northeast office in St. Petersburg, and some very similar comments from Debbie Deeb, a highly experienced buyer's agent from Prudential Tropical.

Essentially, I proposed an open-ended question to these people: What is it that buyers need to do or not do to make their home hunting experience with their agent more efficient, enjoyable and effective?

Here's what came out of those discussions ...

Buyers should never ask the agent to help them find a "bargain". Simply stated, in this market bargains are everywhere. That's because real estate prices have fallen some 46% since reaching their peak in the summer of 2006. For many years, I have felt that great deals are not made by the real estate agent finding the buyer a bargain priced property -- although that sometimes happens. More often, great deals are made when a qualified buyer and his agent take the time to research a property, make a written offer that they feel constitutes the price they are willing to pay, put some money in escrow, and negotiate logically and in good faith with the seller. In other words, the buyer has to make the first move by presenting the offer the way he wants it to be done. You can't put the entire burden on the agent to get lucky and find a great deal hidden away in the MLS files. That puts the agent in the position of having to guess at what a good deal is. What one buyer thinks is a great deal may not be such a hot deal to the next buyer.

Debbie Deeb said that she thinks buyers -- especially buyers from the northern states -- need to be much more realistic about their price expectations in Florida. Apparently the media up north are carrying a lot of stories about how troubled the real estate market is in Florida, and that great properties are now available at a fraction of their former cost. Many buyers come to the Tampa Bay area believing that for less than $100,000 they can move into a totally updated home or condo that needs nothing. Many times these buyers are in for a rude awakening once they see the condition of the property -- especially foreclosures and short sales. "Properties are still valuable assets," said Deeb, "and sellers are not going to give them away for chicken feed." Deeb suggests that buyers look past the media hype and misinformation, look into a property's condition and location, and shop around with their agent to get a realistic idea about what their money will buy.

Pat Lins, one of the old-pros (and I mean that in the best possible way) at Coldwell Banker, said buyers need to trust their agent more and let the agent do his or her job. In fact, several agents said essentially the same thing. Buyers need to determine what they want in a house, what it must have and what they can live without. Buyers need to determine their price range. If they can, buyers need to determine the location where they want to live. Then, Pat Lins said buyers need to communicate this information to their agent and let the agent find suitable housing that meets their needs. If the buyer does not like what the agent is showing, perhaps the buyer needs to revise the house hunting requirements. What the agents find troubling is when the buyer starts handing the agent MLS numbers on houses they found in one of the many search sites on the internet. Many times these buyer-generated MLS numbers are outdated and don't conform to what the buyer is really looking for in a home, so when the agent shows the house the buyer is further disappointed. This is a waste of time and often leads to frustration for both the buyer and the agent.

The round table group at Coldwell Banker said buyers should make their first house hunting assignment the job of obtaining a letter of pre-approval from a mortgage lender. A letter of pre-approval is mandatory for buyers in today's topsy-turfy world of mortgage financing. Sellers want to make sure the offer for the house is being made by a buyer who can qualify for the loan and close the transaction. If the purchase will be made all-cash, the buyer needs to have a proof of funds letter available at the time the offer is made. And here's a little inside secret for all you buyers out there: If you refuse to get that letter of pre-approval or proof of funds letter, no real estate agent will take you as a serious buyer and likely will not work with you.

All the agents I talked with said one of the most foolish things a buyer can do is try to work with several real estate agents at the same time in searching for a home. To the buyer, it may seem that having several agents trying to find a home is smart. Actually, it's not. When agents find out that the buyer is not being loyal to the agent, they often drop the buyer. Then, instead of having several agents working for you, you actually have nobody working for you. Buyers need to select one agent with whom they are comfortable and stick with that agent. If it doesn't work out, the buyer should select a new agent and start the process over.

One of the agents in the round table at Coldwell Banker was Judy Clark, the firm's popular managing broker. Judy pointed out the problems that agents have when buyers start asking hypothetical questions -- and then worrying about the answers. Those kind of questions almost always begin with "What if ...". You know, "What if the roof has a leak?" "What if the air conditioner is broken?" "What if", well, insert the next problem. These kinds of questions make agents nervous because they aren't sure if the buyer will complete the transaction or if they will talk themselves out of buying. There is nothing wrong with buyers asking questions of their agent. But once the question has been answered or the problem solved, don't keep coming back to it and worrying about it. As Pat Lins added, buyers shouldn't dwell on problems so much. There's virtually nothing that can be corrected.

Here's one final point that Debbie Deeb and I discussed over lunch, and I think this is something to which all buyers should give consideration. Purchasing real estate should be treated as a serious business transaction involving large sums of money and to which you will make a commitment that may last a lifetime. Treat it as such. "Hire an agent who is experienced and educated in this market, not some other market," said Deeb. "Hire an agent who knows the current trends, not the way things used to be! After all, this is a big deal and needs to be treated as such."

Deeb said that buyers who hire a friend or relative as their agent may be doing themselves a dis-service from a business transaction standpoint. "That friend or relative may be doing real estate part-time or as some kind of hobby. There is so much money at stake with each transaction that buyers need to protect themselves by being represented by a full-time, qualified agent who is up to date with all their educational requirements and does real estate as a profession."

I think Debbie is spot-on with that remark.

I want to thank all the agents who helped me put this buyer's guide story together. Everybody had great insights and I appreciate their help very much. Debbie Deeb, Pat Lins, Judy Clark, Sandy Ewing, Joe Troy, Dawn Greenidge, Peter Harriss, Alan May, Bambi Cramer and Nancy O'Connell. Everybody's contribution was great. What a smart bunch of agents you guys are! If there's anybody I left out, sorry!

If you're a buyer, I hope this story helps you have a much better relationship with your agent while searching for your new home -- that was my intention in writing it.

-30-

Something Remarkable Happened In October!

2010-11-19T03:18:00.000-08:00

Every month, the Pinellas Multiple Listing Service opens it's report with two charts. One is based on single family homes, the other on condos. They chart the difference between the median list price and the median sale price.

As you can imagine, the median list price is always higher than the median selling price. Always. I can't ever remember when it was the other way around. Ever.

Well, this month for single family homes, the two figures converged on the chart. Mind you, this is only for single family homes, not for condos. This month the median list price moved down a little but the median selling price moved up a good bit so the two figures met.

I don't know if this has any real significance. I don't know if this is the start of a trend. Other than being interesting, I don't know if it's even important. But it sure as heck is interesting. It tells me that during October people seemed to be willing to pay more for single family house as measured as a percentage of the asking price. If you're a seller, you might find that bit of data particularly encouraging.

Let's take a look at the absorption rate (AR) for Pinellas County. For those of you who may be new to looking at AR data, the AR is really the inventory turn. It is calculated by dividing the number of units sold in a month by the total number of listings in the Pinellas Multiple Listing Service.

For single family homes, the AR for October was 7.9%. That's a decrease from September's 9.3% AR and from August's 9.0%. So, we're selling fewer houses as a percentage of total listings. It also means that it will take longer for single family homes to be sold. I think it shows a cooling market.

For condominiums, the AR during October was 6.6%. That is a slight decrease from September's 7.0% but it's a slight uptick from August's 6.5%. Essentially, these statistics are so close that you can almost say the condo market has been pretty close to flat for the last few months.

Single Family Sales Info

During October there were 528 single family home sales according to the MLS in Pinellas County. That's down from September's 567 sales and down from August's 611 sales. So, it appears as though the single family home market is slowing.

Single family listings are about the same as usual. In October there were 6,666 single family homes on the market throughout Pinellas County according to MLS data. In September there were 6,882 and in August 6,770. That's really pretty flat.

The median sale price for single family homes in Pinellas during October was $156,000. That's up quite a bit and may explain why the single family home charts mentioned earlier in this report are about equal. In September the median was $130,000 and in August it was $135,000. A year ago in October of 2009 the median was at $146,300.

Condo Info

Condos just seem to move along at the same speed month after month. In October there were 5,484 condos for sale in Pinellas County. In September there were 5,511 and in August there were 5,446. Statistically, that's pretty darn flat.

Sales seem flat too! In October there were 362 condo sales. In September the sales were at 387 and in August it stood at 360. Not much change month to month. Perhaps that is because demand for condos has not been going upward in Pinellas County for several years.

The median sales price for condos took a bit of a nosedive during October. The median fell to $104,000. That's the lowest median price for condos I can remember in the last few years. During September the median sale price was at $113,500 and in August it was $115,000. If we go back a year to October 2009, the median sale price was $113,000; that's a drop of 8% for condos year over year.

So it looks like a bit of good news but overall things seem about like they have been for quite a long time -- let's call it lackluster. Let's hope things pick up this fall.

Happy Selling Everybody ... and Happy Thanksgiving!

-30-

So, Who's Buying Real Estate Now?

2010-11-15T07:52:00.001-08:00

I talk to a lot of people about selling their real estate. Of course, most if not all these sellers feel like nobody is buying any real estate right now, so why even bother to put the property on the market.

Well, the fact is that there are a lot of buyers in the market right now. To prove that point and define who these people are, the National Association of Realtors (NAR) publishes an annual "Profile of Home Buyers and Sellers". The 2010 version of this research report has just come out and I thought you might like to know who is buying, what they are buying, how they decide what to buy, how they finance their new property, and why trying to sell without a real estate agent is a much more difficult and unsuccessful task than it was five years ago.

The answer to all these questions are in the new NAR report. To get the answers, all you have to do is wade through the entire 124 page research report. I started to read it. I like reading marketing data. But the NAR report is a lot like reading the white pages of the phone book. A real snoozer.

So, to save you all that time and eye-strain, I'll just pass along the info from the executive summary that NAR is smart enough to include on the first few pages of the full report. Now, remember this, the data in this report is for the country as a whole. Statistics for the area where you live may be quite different from what NAR is showing in this report.

Home Buyers

Fifty percent of home buyers were first-time buyers.
The typical first time home buyer was 30 years of age. The typical repeat buyer was 49 years old.
The median household income was $72,200. The median income for first time buyers was $59,900, and the median income for repeat buyers was $87,000.
20 percent of buyers were single females; twelve percent were males.

The Homes

New home purchases were down to 15 percent of all home purchased -- the lowest level in years.
The typical home purchased was 1,780 square feet, built in 1990, and had three bedrooms and two baths.
Seventy-eight percent of home buyers purchased a single family detached home.
Only eleven percent of buyers over 50 purchased senior-related housing or in an active adult community.

Searching For A Home

For more than one-third of home buyers, the first step was in the process was to look on-line for properties.
90 percent of home buyers used the internet to search for a property.
Real estate agents were used by 81 percent of buyers.
The typical home buyer searched for 12 weeks and inspected 12 properties.

Home Buying

Eighty-three percent of buyers used a real estate agent to arrange the purchase.
Only four percent of buyers purchased a home in foreclosure.
Only six percent of buyers purchased a short sale.
Seventy-one percent of all home buyers and ninety-three percent of first-time home buyers used the home buyer tax credit during their purchase.

Home Sellers

The typical seller lived in the house for eight years before selling
Eighty-eight percent of sellers used a real estate agent when selling.
Recent sellers typically sold for ninety-six percent of the listing price, and fifty-seven percent reported that they reduced the asking price at least once.
The typical home was on the market for eight weeks.
To get the house sold, forty-four percent of sellers offered incentives to attract buyers -- the most often mentioned incentives were home warranties, policies and help with closing costs.

For Sale By Owner Results

Only nine percent of sellers were able to sell their home without the assistance of a real estate agent. Half the FSBO sales were made to a buyer with whom the seller was already acquainted.
The primary reason FSBO sellers sold without using a real estate agent was to try to avoid paying the real estate commission.
Twenty-eight percent of FSBO sellers used no marketing techniques to try to sell their house. Fifty-six percent of FSBO sellers offered no incentives to attract buyers.
Twenty-three percent of FSBO sellers reported getting the price right was their most difficult task.

So, is this data important or merely informative?

Frankly, that depends on whether you are actively selling, actively buying, or none of the above.

If you are actively buying or selling, I'd say this kind of information is important to being a successful buyer or seller. If you are neither a buyer nor a seller, then at best this info is only informative. Still in all, it will make for good conversation around the water cooler.

Happy Selling!

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How To Sell Your Property In 90 Days Or Less

2010-11-10T11:34:00.000-08:00

I've written about this matter in past years, but what I'm about to say is just as true today as it was then. Maybe more so!

Real estate agents want to sell each listing in 90 days or less. If you want to sell in 90 days or less in this depressed market, there are three (3) tactical steps to which you must conform:
1. Availability
2. Marketing
3. Price

Availability

Availability means your property is available to be seen whenever a buyer wants to see it. That usually means that you or your real estate agent must be willing to show the property when most buyers are off work and able to look.

So, you must be willing to show the house on weekends. You must be willing to show the house on weekdays after 5:00 PM when people get off work. You must be willing to show the house on holidays. In other words, you have to be willing to show it when a prospective buyer wants to see it. This may be inconvenient sometimes, but you have to do it if you want to sell.

Marketing

Marketing is a big fancy word that sounds complicated. So, let's reduce it to one component: advertising.

If you are going to sell your house in 90 days or less, you have to advertise it heavily. If your real estate agent is not willing to advertise your property, fire him and hire somebody who will. Simple as that.

The reason to advertise? Advertising is the tool that creates interest in your house and drives people to inquire about your property. The more who inquire, the better your chances of selling.

Here's a special hint to all those people who are trying to sell a condo in a 55+ or 62+ retirement community. Don't put all your eggs in the on-line advertising basket. While it may be true that some 85% of buyers search for their home using an internet search of some kind, elderly people are probably not so internet savvy. They probably still rely on such quaint media as newspapers, real estate magazines, mailers and other forms of print media. So use 'em!

Price

Okay, here's the hard thing. Here in Tampa Bay and in many other markets across the country, real estate prices are still falling. Repeat: prices are still falling. The St. Pete Times just published an article about these falling prices today (November 10, 2010). Among other things, the paper said prices here are at about the same level as they were in 2002. So, determine your property's value in 2002 and you have a pretty good idea about its value today.

What does this mean to you as a seller?

Simply this: IN A FALLING MARKET, THE LONGER YOUR PROPERTY IS ON THE MARKET THE LESS IT WILL SELL FOR!

So, to overcome this problem you have give your property a bargain price right from the beginning. Otherwise, it is not going to sell.

Remember this as well. If you overprice your house and get lucky and find a buyer, the chances are that the overpriced house will not pass the appraisal. If the house does not appraise for the contract amount, your deal falls apart. So what good did it do you to put the high price on it?

Overpricing a home in a falling market means you will always be trying to lower the price in an effort to catch-up to steadily falling values. Most sellers can't -- or won't -- reduce prices fast enough to keep up with the falling market prices. So, they are constantly playing catch-up -- and that is a losing proposition.

So, give your property a bargain price right from the git-go, sell the place fast and move on. Sure, you may feel like you got a haircut when selling, but when you buy your next house you'll probably scalp that seller. After all, what goes around comes around.

Conclusion

So, if you have had your house on the market for over 90 days it is probably because you are not making it available enough ... it is under-marketed ... or it is over-priced. Any one of these is enough to keep it from selling. Do your analysis and determine which it is. Then, correct the problem or problems.

Happy Selling!

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Let's Think Positively For A Change

2010-10-27T05:27:00.000-07:00

Well, this has sure been a week full of real estate media crapola. I mean it! I'm sick of reading and hearing about how real estate continues to deteriorate.

I've been hearing on CNBC about banking and mortgage garbage all week, and how normally well qualified buyers can't get a mortgage from the banks.

I've been hearing on Fox and NPR about how the Obama programs to save people from foreclosure are mostly failures and serve only to build up false expectations and set people up for future failure.

All the major networks have been banging away about the new foreclosure crisis and I can see loads of legal entanglements for banks versus homeowners on those issues in coming months ... and maybe years.

This morning, I read in the St. Petersburg Times that the Case-Shiller Home Price Index for August says Tampa Bay home prices dropped another 4.1-percent for the year ended last August. The only market that was worse than ours was Las Vegas, where prices fell 4.5-percent for the same time period.

This week past, somebody even e-mailed me some colorful charts and graphs to let me know how far real estate prices have fallen since reaching their peak in 2006. Like I need a graphic representation for this disaster, you know?

Hey, are you as tired of this kind of media coverage as I am? I mean it. I'm sick to death of reports of real estate doom.

Here's my suggestion: Only look on the bright side of real estate.

Don't say that ONLY a few hundred homes were sold this month. Say that a few hundred people found their new homes here in Tampa Bay ... that's great for them.

Don't say that real estate prices dropped another 4.1-percent. Say real estate prices are now a little more affordable, making this a great time to be looking for a new home.

Don't say that bankers are making it hard for credit-worthy people to get mortgages. Say that the new mortgage requirements will strengthen the credit system in this country and help us avoid future mortgage problems.

Don't worry about all those foreclosed properties on the market. Sooner or later they will all get sold at low prices ... and in a few years it won't matter anyway.

And when you hear the words "real estate" and "Obama" in the opening paragraph of the same story on Fox TV, change the channel immediately because even it it is good news, Fox will make it sound negative. It's what they do!

I say we dump the negatives, stress the positives, and get on with things as best we can.

Happy Selling!

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Foreclosure Scams And What To Beware Of

2010-10-17T05:10:00.000-07:00

I guess every real estate writer has at one time or another written a story about short sale and foreclosure scams.

Well, I gotta put my two-cents worth in on these crooked dealings as well.

Did you know that one out of every 139 homes in America got hit by a foreclosure filing in the third quarter of this year, or so says RealtyTrac. 102,134 homes were actually repossessed in September.

With that many foreclosures, it is no surprise that the scavengers are out there sniffing for blood. Mostly, what these vultures do is try to convince unsuspecting homeowners into paying them in advance for advice which they say will save you from foreclosure, or they tell you that for a fee they will intervene with your lender on your behalf.

Investor's Business Daily has just published an article carrying the six danger signs homeowners should be on the lookout for if they are in danger of foreclosure. Here's a synopsis ...

1. Advance Fees. You are contacted by a person or firm who indicates that he will contact your lender and arrange for your loan to be modified, refinanced or reinstated in some way. Their only condition is that you pay them a fee in advance. Beware! Most likely they will take your money and never contact your mortgage company. Just say "no" to such proposals.

2. Counseling For A Fee. This scam involves the homeowner paying a fee in advance for advice they can get for free from their lender or from some other source, like HUD.

3. Guarantees Of Help. If somebody "guarantees" that they can halt your foreclosure, they are probably crooked. Run, repeat, run away. Any kind of negotiations about halting a foreclosure must be between the mortgage company and the lender, not some third party. There are usually some upfront fees involved in this scam as well.

4. The Leaseback Scheme. This is a beauty of a scam. The crook convinces you to sign the title to your home over to him. He says he can get a lower mortgage rate than you have. Once he has title to your house, he'll lease it back to you for less than your current monthly mortgage. Eventually, he'll let you buy it back from him. You don't believe that, do you? What is more likely to happen is that the scam artist will never sell the house back to the original home owner, and will eventually evict the homeowner. Don't fall for this scam.

5. The Bankruptcy Strategy. For an advance fee, the scam artist tells you he can save you from foreclosure through bankruptcy. Baloney. Bankruptcy only stops foreclosure for a short period of time, but it will put a black mark on your credit record for years.

6. Fake Government ID. Be on the lookout for crooks offering help as part of the federal government. Anybody with a laptop and inkjet printer can make some official-looking business cards and ID's. Before you start taking advice from such a person, call his agency and see if he really is an employee. Or, check with your lender to see if this person is on the up-and-up. Anybody can put the words "Federal" or "TARP" on a business card.

Well, there it is. Six good things to be looking out for if you are facing foreclosure. And a tip-of-the-hat to Paul Katzeff of Investor's Business Daily for writing such good info.

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A Thought On The Foreclosure Crisis

2010-10-14T05:20:00.000-07:00

Apparently "robo-signers" have falsely verified hundreds of thousands of foreclosure documents in recent years. This has happened so often that several of banking's big-boys have now halted foreclosure sales and closing proceedings in order to review banking procedures and make sure everything was on the up-and-up.

As you might expect, its the same old banking names that have been heard so many times before in matters involving the real estate mortgage problems faced in this country -- PNC Financial Group, Ally Financial's GMAC Mortgage Unit, Bank of America, and JPMorgan Chase & Co. Let's hope that no other institutions are involved.

Let's also hope that these financial giants are able to resolve these matters without hurting anyone along the way. I hope they can.

But suppose they can't.

Suppose, hypothetically speaking of course, that we find out that bankers did indeed improperly foreclose on the homes of bazillions of people. Suppose those bazillions of people file lawsuits designed to get their homes back. Suppose the courts agree with, say, half-a-bazillion of those original homeowners and rule that the banks foreclosed improperly. Now, further suppose that a quarter-of-a-bazillion of those homes now have new owners. The lawsuit certainly creates a question of who properly holds title to that property, does it not? Will this kind of circumstance not create a major financial problem for the title insurance industry who will have to make some kind of settlements on the title for a quarter-of-a-bazillion insured property titles?

Hey, I'm not trying to borrow trouble here and I hope this scenario does not happen, but give it a few minutes thought yourself. How much money will the title companies have to come up with? Do they have that much money laying around in the old savings account? Is the title insurance industry "too big to fail"? If it is deemed to be too big to fail, are we looking at some new government-funded bailout? Ultimately, will this be more taxpayer money used to bail out the title insurance industry because bankers made thoughtless mistakes? Or, will the title insurance companies file lawsuits against the bankers in order to recoup their losses which were caused by the bankers charged with filing the foreclosures? (Gee, that sounds like a lot of nice work for the lawyers on both sides, doesn't it?)

Hey, I'm just asking a question. I don't necessarily have any answers. Am I borrowing trouble? I sure hope not. I'm hoping all this gets resolved and turns out to be nothing but a tempest in a teapot. But when a lot of money is involved and lawyers get active, well, you never know what will happen.

I think it is an issue worth watching for the next few weeks.

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Local Home Prices Fall

2010-09-29T03:39:00.000-07:00

The S&P Case/Shiller home price index has announced that single family home prices in Tampa Bay fell another 3.2-percent in July as compared to July of 2009. This was the third highest drop among the 20 metro markets tracked by the well-respected index.

Nationwide, home prices were up 3.2-percent for July versus a year earlier, and half the cities surveyed showed strong gains. San Francisco was up 11.2-percent, San Diego up 9.3-percent, and Los Angeles up 7.5-percent.

The biggest losses took place in Las Vegas, down 4.9-percent, and Charlotte, N.C., down 3.5-percent. Tampa Bay suffered the nation's third worst price drop at 3.2-percent.

Condos are not included in the survey.

-30-

August Sales Were Unremarkable

2010-09-20T08:37:00.000-07:00

In case you missed it, I read in the St. Petersburg Times a week or two ago that real estate prices in Pinellas County are now comparable to the prices we had ten years ago. So, if you're like me and bought your home around the year 2000, well, at least you haven't lost any money ... yet.

If we keep seeing numbers like we saw in August, however, you will be losing money on your ten year old property pretty soon.

Prices just keep falling. August is the proof.

We'll start as always with a quick look at the Absorption Rate (AR) or Inventory Turn. This is calculated by dividing the number of units sold in a month by the total number of units in the MLS system.

For single family homes, the AR for August was 9.0%. That's better than July's AR of 8.3%, so at least single family homes are apparently selling a little faster. The AR for condos in August was 6.5% as compared to July's 6.1%.

What this means is that in August, it took a single family home an average of 11.1 months to get sold; it took a condo an average of 15.4 months to be sold. Overall, this means the market is not in equilibrium, which happens when it takes about 6 months or so for property to be sold. So, we're still in a buyer's market with lots of inventory sitting around for a long time.

The number of sales, however, did increase in August. There were 611 single family homes sold in August as compared to July's 555. Condo's also sold at a somewhat more robust pace with 360 condos selling in August compared to July's 335 units sold.

Median prices, however, continue to erode. The median price for a single family home in Pinellas County for August 2010 was $135,000 as compared to August 2009's median of $142,000. So, in the last twelve months, the median price for a single family home in Pinellas County dropped another 4.9%.

For condos, the drop in median prices was even more dramatic in the last year. In August of 2010, the median for condos stood at $115,000 while the median in August 2009 was $138,900. That's a one year drop of 17.2% for condos.

So, that's what happened in Pinellas County during August. It may be a different story in other parts of Florida, but that's the Pinellas County story and I'm sticking to it.

Happy Selling!

-30-

Why Buy A Home In Today's Market?

2010-09-18T03:23:00.000-07:00

I can't tell you how many times in the last three or four years that a buyer has told me that he's willing to buy a home, but I have to find him a "great deal".

Buyer's need to understand something. "Great deals" are not "found". "Great deals" are "created".

If you want a great deal, you have to be willing to make an offer that you feel is the deal you want. Then, negotiate, negotiate, negotiate until you have created an acceptable deal on a house that you want to own in a neighborhood where you want to live.

If you do that, you've earned the right to brag about the great deal you got on your new home.

Writing in the Wall Street Journal this past week, Brett Arends reminds buyers that this is a great time to buy real estate in most markets. Arends points out that good deals are all around because, nationwide, purchasing prices are down about 30% on average. Here in Tampa Bay, housing prices have dropped to their lowest point in 10 years. Combine that with mortgage interest rates that are hovering at about the 4.3% for a 30-year mortgage and home ownership looks extremely attractive.

I shouldn't have to point this out, but considering the above info you've got the makings for a steady stream of "good deals".

So, where are all the buyers?

I think people are being served very badly by the media. Their steady stream of bad real estate news and reasons not to buy has turned a lot of potential buyers off to the idea of home ownership. These real estate gurus whose comments stress the negative side of purchasing and owning property have done more to damage the real estate recovery than I ever thought possible. Maybe we need some TV gurus who look to the positive aspects of home ownership. That's something the National Association of Realtors really ought to think about ... the formation of a pro-real estate speaker's bureau for placement on local and national TV shows and news programs. These NAR speakers should stress the many good reasons to buy real estate now.

Ah, but I'm doing the job of the PR people at NAR. I shouldn't do that. That's not my business. I do hope it is theirs.

Happy Selling!

-30-

Fewer Sellers Reducing Prices

2010-09-04T03:53:00.000-07:00

If you've been waiting for the seller to reduce the price of your dream home before making an offer, be advised that fewer and fewer sellers are volunteering to reduce their asking price. So, your wait may be long and futile.

According to news just released by Zillow, fewer U.S. home sellers cut their prices in August. Of all the homes listed for sale on the Zillow site, prices had been cut at least once on 28.8% of them by the end of August, 2010. This is down from July's 30.1%. In September of '09, some 32.6% of listed properties on Zillow had experienced at least one price reduction. The median price reduction was 7% in August. The median was the same in July. The cities with the largest price reduction, according to Zillow, were Tucson, Arizona and Portland, Oregon.

I have to be honest with you about this. If you are a buyer right now, why on earth would you sit on the sidelines waiting for a seller to unilaterally drop the price?

Buyers today have all the advantages. Real estate prices are at near record lows. Many sellers are just plain desperate to sell and will look at any offer. Mortgage interest rates are at or near record lows if you qualify. Nationally, the selection of properties in all price ranges is at near record highs, so you have plenty of homes from which to make a selection.

Buyers gain nothing by waiting. First of all, you may lose the property when some other buyer comes along and takes the initiative to make an offer while you're waiting for the seller to cut his price. Remember, if you like the house, others will too! Second, interest rates may go up. If they do, you may find yourself with a higher monthly payment even if the seller agrees to your price. Third, property taxes and insurance premiums may increase while you're waiting for a price reduction. Remember, most government taxing authorities are desperately looking for ways to increase government revenues, and insurance companies are for-profit organizations that just love to make homeowners pay higher premiums for the same-or-less coverage. Finally, the seller may never reduce his price and elect to simply take the house off the market.

So, there is a down-side to waiting that may outweigh the possible gains from a price reduction.

My advice is to act now. If you don't want to pay what the seller is asking, make an offer for what you are willing to pay for the house. Then, negotiate, negotiate, negotiate. That's how great deals are forged on homes today.

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A Priceless Story About Real Estate, Divorce, And Getting What You Want In The End

2010-09-03T05:31:00.000-07:00

Last Tuesday, Judy Clark -- the brilliant, level-headed, experienced, fun-loving managing broker for Coldwell Banker Real Estate's Northeast St. Petersburg office -- told this story. Could it be true? Well, maybe ...

"Curtain Rods"

On the first day, he sadly packed his belongings into boxes, crates and suitcases.

On the second day, he sat down for the last time at their beautiful dining room table, by candle-light. He put on some oldies background music, and feasted on a pound of shrimp, a jar of caviar and a six pack of beer.

When he finished, he went into each and every room and deposited a few half-eaten shrimp dipped in caviar into the hollow center of the curtain rods. He then cleaned up the kitchen and left.

On the fourth day, the wife came back with her new boyfriend.

At first, all was bliss. Then, slowly, the house began to smell.

They tried everything: cleaning, mopping, and airing-out the place. Vents were checked for dead rodents and carpets were steam cleaned. Air fresheneres were hung everywhere. Exterminators were brought in to set off gas canisters, during which time the two had to move out for a few days. In the end, they even paid to replace the expensive wool carpeting.

Nothing worked!

People stopped coming over to visit.

Repairmen refused to work in the house.

The maid quit.

Finally, she couldn't take the stench any longer, and decided they had to move, but a month later -- even though they had cut their price in half -- they couldn't find a buyer for such a stinky house.

Word got out, and eventually even the local real estate agents refused to return their calls.

Finally, unable to wait any longer for a purchaser, they had to borrow a huge sum of money from the bank and purchase a new home.

It was then that the ex-husband called the lady and asked how things were going. She told him the saga of the rotting house. He listened politely and said that he missed his old home terribly and would be willing to reduce his divorce settlement in exchange for having the house.

Knowing he could have no idea how bad the smell really was, she agreed on a price that was only one-tenth of what the house had been worth -- but only if he would sign the papers that very day. He agreed, and within two hours her lawyers delivered the completed paperwork.

A week later the woman and her boyfriend stood smiling as they watched the moving company pack everything to take to their new home. And to spite her ex-husband, they even took the curtain rods!

Don't you just love a happy ending?

-30-

July Real Estate Sales Were Bad Everyplace, I Guess

2010-08-25T04:29:00.000-07:00

Recently I reported to you on how bad real estate sales were in Pinellas County during July. It was awful!

Now, I must report to you that apparently it was bad all over.

The St. Petersburg Times reported today (August 25th) that real estate sales throughout the Tampa Bay area fell 29 percent from June to July. They are off 19 percent for the last year.

Nationally, home sales dropped 27 percent from June to July according to the National Association of Realtors. That's the biggest one month sales plunge since they started keeping records of such things back in 1968.

In Florida, home sales were off 25 percent from June to July, and down 14 percent for the last twelve months.

As if sales volume was not bad news enough, median sales prices fell another 9 percent to $130,500 in Tampa Bay and to $138,000 statewide.

Hey, it wasn't just here. In New York, sales dropped 50 percent from June to July and 35 percent in Ohio.

There are two reasons for this plunge. First, expiration of the federal tax credit which gave $8,000 to first time buyers and $6,000 to those making a repeat purchase. In order to qualify for this you had to close by the end of June. So, a lot of people bought early so they could close in time to qualify. Those folks moved up their timetable, leaving fewer people to buy in July. Maybe that's part of the reason for these crummy numbers? If that's the case, these numbers are skewed and should not be taken too seriously -- just like the numbers for April that showed lots of home sales. Those numbers were artificially inflated because of the tax credit.

The second reason for the plunge is the high level of national unemployment. When lots of people aren't working, they aren't buying. The only number here that is skewed is the percentage of people who are unemployed. When you include the number of people who have stopped looking, the unemployment figure jumps from about 9.5 percent to a little over 16 percent. Now, add the number of folks who are underemployed, and you have a figure of nearly 25 percent of the total U.S. workforce. And still, large companies export needed U.S. jobs to low-salaried workers in Asia in order to improve corporte earnings by reducing overhead -- that ought to be illegal.

According to Mark Vitner, a senior economist with Wells Fargo, the combination of high inventories, increases in distressed properties from foreclosures and short sales, and a general decline in demand means prices are likely to fall further in the coming months.

I heard this past week from one of the talking head real estate pundits on CNBC that for the foreseeable future, real estate is no longer considered one of the paths to building personal financial wealth. This guru, whose name I did not get but had a PhD from someplace, said that real estate prices were going to remain depressed for another GENERATION! What's that? Twenty-five years? This same guy suggested that if you are going to live in an area for 10 years or less, that you rent rather than buy your home because the property will not increase in value enough to justify a purchase if you only live there less than 10 years. I almost threw my shoe through my brand new HD TV.

I realize that we've had four years of these falling prices and dwindling sales. We are way, way past due for a positive correction leading to a long-term recovery. The correction in real estate, however, is going to be directly linked to an improvement in the nation's overall economy and an increase in employment. So far, we have seen little of either, although corporate profits are rising which I consider to be a good sign. Once the recovery begins in earnest -- and that means a recovery that includes jobs for those who want to work including people over 50 -- it will feed upon itself and grow faster and faster. When that happens, other things being equal, the housing markets will improve right along with everything else.

When is that going to happen? Well, it's been four years. How much more can we take?

Happy Selling!

-30-

Tough New Rules About Permitting

2010-08-19T13:18:00.000-07:00

Up until a few months ago, the pre-printed contracts used by real estate agents to sell houses were about 5 pages long. Known as the FAR/BAR contract, the new contract is now 11 pages of lawyer-speak that will absolutely put an insomniac to sleep.

One of those new rules, however, might keep you up at night if -- like some people -- you had work performed on your property that was never permitted.

Here's the first part of the new rule. It reads: EXCEPT AS MAY HAVE BEEN DISCLOSED BY SELLER TO BUYER IN A WRITTEN DISCLOSURE, SELLER DOES NOT KNOW OF ANY IMPROVEMENTS MADE TO THE PROPERTY WHICH WERE MADE WITHOUT REQUIRED PERMITS OR MADE PURSUANT TO PERMITS WHICH HAVE NOT BEEN PROPERLY CLOSED.

In other words, if you're the seller you are guaranteeing that all permits were pulled and properly closed out when the work was done. It doesn't matter if the property being sold was a single family home, condo or an investment property.

This is not something you want to mislead buyers about. If something looks fishy, all the buyer or his agent has to do is go down to the building permit office and ask for what is known as a "property card". The property card lists all the work done to the property since it was built for which a permit was pulled. If the buyer sees something that was done at the property and there is no record of the permit having been pulled, well, you may have a problem.

The buyer is within his rights to do this research.

Another new section to the contract states very clearly that the buyer may have an inspection of all the records and documents made to determine if there are any open or expired building permits or any unpermitted improvements to the property. This is now known as the "Permit Inspection", and it's part of the new contract. I would think that most buyers will now make this a standard part of their due diligence when buying property.

If you are the seller, you will be given only five (5) days to have an estimate prepared to remedy the permitting problem(s). Then, no more than five (5) days prior to closing, the seller will have to get the open and expired building permits closed by the appropriate governmental entity, and obtain and close any required building permits for improvements made to the property. There are other provisions involved in this part of the new contract, but ultimately if this permitting matter is not attended to in a timely manner, the contract could be cancelled with a full refund of the buyer's deposit.

Here's my advice on this matter. If you're a seller and you know that non-permitted work was done on property you want to sell, get it corrected before you even talk to a real estate agent about listing your property. If you don't know for sure if the permit was pulled, or if you don't know if a permit needed to be pulled, call your local building codes or permitting office and ask them. Finally, if you're thinking about having some work done on your property, call the permitting department in your city to find out if the work requires a permit -- even if it will be a do-it-yourself project. You will be a lot better off getting this matter squared away before you put the property under contract than afterwards.

-30-

July Real Estate Sales Bring More Bad News

2010-08-17T07:45:00.000-07:00

We have learned two important things during July. First, low mortgage interest rates don't mean much when unemployment is soaring. And second, without the first time buyer program we aren't going to sell as many homes.

How do we know?

Just look at the Absorption Rate (AR) for July as compared to June. In July, the AR for single family homes fell to 8.3% as compared to June's 12.4%. That's a big drop, a very big drop.

For condos, similar bad news. The AR for July fell to 6.1% from June's 7.9%. Pretty sorry.

I blame the economy in general. There's just too much economic bad news and it's discouraging people from buying homes and condos.

For single family homes, the inventory of homes available in the MLS jumped in July to 6,675 homes as compared to June's 6,479. So, more homes are on the market and that means home sellers have more competition to deal with. To top off that bad news, sales dropped like a big rock down a deep well. In June, some 802 single family homes were sold. In July, only 555 homes managed to close. Big drop.

On top of all that, it looks like the median price is stuck in neutral. The median price for July 2010 was the same as the median price for July of 2009 -- $140,000. To be honest, the median price has been staying pretty much within a few thousand dollars from month to month for over a year now. I don't know if that means we've "bottomed-out", but it sure looks like these prices have become fairly stable for the last year or so in Pinellas County. Perhaps that's good news -- at least the market has stabilized for the time being.

Condo statistics for July resemble single family home stats.

The number of listed condos increased in July to 5,482 as compared to June's listings of 5,344. So, there are more condos on the market making for more competition for all condo sellers. The number of condos sold in July fell to 335 units as compared to June's 424 sales.

Unlike the median price for homes, condo prices continue to fall. In July 2010, the median price in Pinellas County was $110,000; in July 2009, it was $128,000. That's a drop in median price of 14.1% in the last year. Not good if you're trying to sell a condo.

So, that's it. July was not such a good month for real estate. We can only hope that things will pick up soon.

-30-

Advice For Condo Sellers:Seller Financing May Be The Way To Go!

2010-08-13T08:17:00.000-07:00

Because of all the easy-to-get mortgages that were available in the last few years, we kind of forgot about a tried and true form of real estate financing -- Seller Financing.

I am predicting a return to seller financing in the coming years, especially for condominiums in Florida.

Under the new Fannie and Freddie rules, a condo in Florida now requires a down payment of 30 percent. This, I am told, is because in Fannie and Freddie's view, condominium values in Florida continue to fall due to overbuilding and lack of demand. So, they want buyers to put more down to help offset the possible losses. I think they also want buyers to have more skin in the game, so to speak.

It does not matter if you agree with this or not. That's how it is.

If you are selling a condo, that 30% down stroke can be a real difficult thing for prospective buyers to come up with. Let's take a condo valued at $150,000. To buy it now requires a down payment of $45,000 in cash at closing. A $100,000 unit will require a $30,000 down payment.

For most people, coming up with the down payment is now a very big hurdle to be overcome when purchasing a condo. I think down payment requirements are now one of the main reasons why condo sales are so slow throughout most of Florida, and I don't see any improvement until Fannie and Freddie change the policy.

So, how do we overcome this challenge?

There are two ways. The first is to have the buyer get an FHA loan where the down payment will only be 3-1/2%. Problem is, in order to qualify for an FHA mortgage, the entire condominium community must be approved by FHA, not just the individual condominium (another new rule). Community approval is a time consuming and often troublesome undertaking for most condo Boards of Directors -- I know; I just went through it with my condo community last spring. It was a pain!

That leaves us another alternative -- Seller Financing. With seller financing, the seller of the property actually provides the financing for the buyer. Think of it as a private mortgage.

With seller financing, the Fannie and Freddie rules don't apply. Instead of requiring a 30% down payment, the seller sets the amount of the down payment. I suggest that you require enough of a down payment to cover your closing costs and real estate commissions so you don't have to bring your checkbook to the closing. Usually, a down payment from the buyer of 12 to 15% will cover the costs. Remember, a 15% down payment is HALF the conventional amount required by Fannie and Freddie. Right away your property starts looking very attractive to most buyers.

Next, I suggest you amortize the payments as if it was a 30 year mortgage. Since the seller is assuming the risk of the mortgage, it is common to set an interest rate that is a bit higher than what a bank would charge for a mortgage. In today's market, an interest rate of about 7% is probably about right, but you might have to negotiate this a little with your buyer so he's comfortable with the monthly payments.

Finally, the agreement for seller financing will likely have a balloon payment at the end of 5 years. This means that the balance due on the property is due to you in full at the end of 60 months. This also gives the new buyer a 5-year period to arrange permanent mortgage financing with a bank or some other financial institution. So, it's a win-win situation for both buyer and seller.

Now, here's the downside. You have in your current mortgage a clause called a "Due On Sale" clause. Some mortgages call it a "Due On Sale Provision". Same thing. This means that when you sell your condo, the outstanding amount of your mortgage is due to your mortgage holder. So, if you are going to offer seller financing, make sure the amount you owe to your mortgage company is something you can easily pay to them when you complete your seller financing sale. Or -- and this is probably the best way to handle it -- pay off your mortgage totally before you complete the seller financing sale with the new buyer.

One final thing, and it's no biggie. As the seller, you will have to do your own credit check on the new buyer. Your real estate agent most likely will not do it for you. Real simple reason. Most agents don't want the responsibility. Real estate firms are not credit reporting agencies, and don't want to be. In this day of internet info, you can run a credit evaluation on somebody pretty quickly. If not, go talk to a loan officer at your bank and see if they can be of assistance. Or a car dealer.

Any experienced real estate agent, title company or attorney can help you arrange seller financing. If you've got a condo to sell in Florida, this might be the answer you've been looking for -- and it's the kind of creative thinking you may need in today's real estate world.

Happy Selling!

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I Wonder If Bankers Get It

2010-08-12T04:51:00.000-07:00

There was a big story in the St. Petersburg Times today stating that in Florida, foreclosures remain high but seem to be on the decline.

It was a long story so I'll summarize it: During July, 1 out of every 171 Florida homes received a foreclosure filing of some kind. That's right, 1 for every 171 homes.

Perhaps the reason foreclosures appear to be on the decline is because there isn't anybody left to serve foreclosure papers on!

I'm going to make a generalization here. I'm going to lump everybody who makes mortgages into the term "banker". That may not be entirely correct or fair, but I'm going to do it anyway for the sake of simplicity.

So, here's the question: Have bankers ever have stopped to think about what these foreclosures are doing to their image as an industry? Remember, I used to be in the public relations business and I still think about matters like that.

Certainly, the person who just received a foreclosure notification is no longer going to go to that bank for financial services -- even after he gets back on his financial feet! He'll find some other bank to meet his needs, and the banker who foreclosed will have lost a customer forever. Bankers need to remember that an unhappy customer will tell everyone about how unhappy he is with you, thus compounding the loss of business.

Some friends who are bankers and I have discussed this matter over Cool-Aid. They look me right in the eye and ask what they are supposed to do? The homeowner is behind. The homeowner can't make his payments. The homeowner is underwater in the mortgage. The property secures the note, so they have to go after it. What are they supposed to do, ignore the matter?

Sure. Sounds like a banker talking, doesn't it? And from a business viewpoint it's hard to argue with the reasoning.

But here's something bankers ought to think about before they drop the f-bomb on some struggling homeowner.

First, they will lose that customer forever. Many of those customers will survive economically, but that bank will never see them again. Over the remainder of his lifetime, that foreclosed-upon person may do hundreds of thousands of dollars -- perhaps millions -- of banking business that will be lost due to an old foreclosure.

Second, on average in Florida, it costs the bank about $50,000 to foreclose on a property. I've heard that the foreclosure figure averages as high as $69,000 in Florida, but I'll use the lower figure here. Suffice it to say that foreclosure is costly.

Third, after foreclosure the bank has to sell the property, probably at a deep discount, and probably for less than the amount of the outstanding mortgage. So, the bank loses money anyway.

Fourth, the longer a foreclosed property sits vacant, the more it deteriorates. As it deteriorates, it pulls down the value of the other homes in the neighborhood. So, as property values decline in the neighborhood, the value of the bank's foreclosed property drops right along with the other property values. Remember, when the tide goes out in the marina, all boats sit lower in the water.

It's easy to see the financial problems that happen in a foreclosure. What I'm wondering is if the bankers are even aware of the public relations problems that are beginning to mount with this wave of foreclosures.

It's not just the foreclosed homeowner who will dislike the bankers, it's John Q. Public who is beginning to ask why these bankers are so heartless and won't do anything much to aid folks -- many of whom are unable to make their payments through no fault of their own. More and more, it appears that banks are giving financially strapped people only three options: foreclosure, short sale, or deed in lieu. And for each option the homeowner loses the house.

Banks make a good point by saying that loan mitigation is proving to be unsuccessful for the majority of debtors. But a lot of that has to do with the extremely high levels of unemployment in Florida and throughout the United States. When your job gets shipped off to India and you can't find another one, well, the homeowner is going to have a hard time making payments -- mitigated or not. C'mon, let's be fair and logical about this. Maybe bankers have to be a bit more open-minded about loan mitigation and give people more than one chance at it.

Anyway, here's the point of all this. Bankers are beginning to look real bad to most folks because it appears they are heartless, uncaring money-grubbers who don't give a blankety-blank darn about helping people solve their mortgage problems -- and the rising number of foreclosures, short sales and deeds-in-lieu support the mounting loss of respect the public feels toward bankers.

Yet, foreclosures seems to be continuing. Question: Do bankers not get it, or don't they care? Are they so fixed on the dollars that they can't see the damage being done to their own reputations?

There used to be a saying in this country, often quoted by bankers. "If you can't trust your banker, who can you trust?"

Somehow, I think that in 1 out of every 171 homes in Florida in July, the bankers might not like the answer to that question.

-30-

Big Changes In Condo Law For 2010

2010-07-14T05:28:00.000-07:00

The Florida Legislature has made some big changes in the law affecting condominium, cooperatives and homeowners' associations. I can't get into all of it in this blog, but I do want to point out a few of the changes just in case you find yourself sitting on the Board of Directors of one of these organizations.

Changes were made to give associations greater rights to amend their documents in regard to the rental restrictions which may be imposed on existing owners. Apparently from this point forward, the only amendments involving rental which cannot be applied to existing owners are those which prohibit owners from renting their units, alter the duration of the rental term, or specify or limit the number of times owners can rent their unit during a specified period.
A revised section of the law now states that if a Board member's term expires and there are fewer candidates for the Board than there are vacancies, the Board member would be "eligible" for re-appointment to the Board. The old law made the Board member's re-appointment "automatic".
A member of the Board who is more than 90 days delinquent regarding any monetary obligation due to the association shall be deemed to have abandoned his Board membership.
If a unit is occupied by a tenant, and the unit owner is delinquent in paying the association fees etc., the association may demand that the tenant pay rent directly to the association until the back payments are brought up to date. This can now be accomplished simply by a written notice to the tenant. If the tenant fails to pay rent to the association, the association can now evict the tenant.
If an owner is more than 90 days delinquent in funds owed to the association, the association can suspend his use rights for common elements and amenities until the fees are brought up to date. Further, if the owner is more than 90 days delinquent, his voting rights can now be suspended until the debt is paid.

There are several pages more of changes to the law for 2010, and I just don't have space in this blog to summarize all of them. If anybody needs to review them -- and if you are on a condo Board I suggest you do read them -- please e-mail me and I'll see to it that you get a summary sheet.

Oh, by the way, before you act on any of these legal changes, be sure you check with your attorney or with your association's legal consultant. I'm not an attorney and do not give out legal advise.

-30-

Real Estate Market Holds Its Own For June

2010-07-12T08:18:00.000-07:00

Despite a ho-hum economy and the recent end of tax incentives for buyers, the real estate market in Tampa Bay held its own pretty well for June.

The Absorption Rate, calculated by dividing the number of units sold in June by the number of total listings, was the best in four years for single family homes and condominiums.

The AR for June 2010 advanced to 12.4%. For June of 2009 it was 11.1%; 7.3% for 2009; and 7.5% for 2007. So, we're seeing improvements year over year.

For condos, the AR for June was 7.9%. It was 7.0% for 2009; 4.5% for 2008; and 4.0% for 2007.

Listings increased during June. Some 6,479 homes were listed in the MLS in June while in May there were 6,270 homes in the MLS. This means there is still plenty of inventory in the market and buyers should be able to find that "dream" home from among the available properties.

Sales increased in June as compared to May, but only a little. MLS reported 802 sales in June as compared to 786 in May.

The median price of a single family home in Pinellas County dropped to $144,800 in June as compared to $146,500 in June of 2009; that's a decrease in median price of 1.2% year over year. That's pretty good and shows some stability in the marketplace.

Condominiums were pretty flat for June, but that's to be expected since summer has historically been the slow season for condo sales.

Condo listings decreased from 5,375 units in May to 5,344 in June. That's not a significant reduction in inventory and there are still plenty of condo from which buyers can select.

Condo sales also decreased from May to June. MLS shows 489 condo sales in May, but only 424 in June. Like I said, condo sales slow down in the summer.

The median price for a condo in June of 2009 was $138,500. That figure fell about 17% in June of 2010 to only $115,000. That's a significant loss in just a one year period and probably reflects the fact that condo buyers are hammering out better deals for units than in the past.

All in all, June was a pretty flat month for real estate sales. Just kinda of a ho-hum month.

Happy selling!

-30-

Prices Have Not "Bottomed-Out" In Tampa Bay

2010-07-07T03:23:00.000-07:00

Although statistics indicate that Tampa Bay's real estate price decline has slowed during the past year, new information from Zillow.com shows that prices continue to fall here.

According to information released today and reported in the St. Petersburg Times, average home prices in Tampa Bay fell another 10.2-percent during the past twelve months. Zillow said that nationally, average home prices are down only 3.8-percent for the past year. Additionally, Zillow reports that Tampa Bay home prices fell 0.8-percent from April to May versus a 0.4-percent drop nationally. Home values have crashed some 46-percent from their peak in 2006.

The Zillow report spotlighted Tampa Bay as among the worst performing real estate markets. Included in that spotlight are the cities of Detroit, Las Vegas, Orlando, Miami and Phoenix. Zillow's chief economist, Stan Humphries, wrote in a blog site that he expects a continuing decline in home prices until later this year due primarily to high unemployment and the end of home-buyer tax credits.

So, when will we see improvements in pricing?

Well, if Humphries is correct we might see prices continue to decline into 2011. Why? First of all the government has indicated that Congress has no plans to renew the home-buyer tax credit program that stimulated home sales in the first quarter of this year. Second, the so-called economic recovery has failed to produce meaningful employment increases. So if these are the two things that will increase sales and improve real estate prices, it frankly looks pretty grim.

Let's hope there are other factors that can stimulate a recovery in the real estate market in Tampa Bay and across the country.

In the meantime, if you are selling a property it would be wise to position your price to reflect the current economic reality.

-30-

Flood Insurance Extended

2010-07-02T04:41:00.000-07:00

The United States Congress has finally given yet another 3-month extension to the National Flood Insurance Program. So now, thousands of property sales where closings have been in limbo can be finalized.

This is only a temporary fix. The funding for the program will expire again in three months, and Congress will once again have to put together some kind of legislative package to renew the funding for this much needed program.

Historically, funding this program has always been tied to some other funding program -- like an extension of unemployment benefits or some restructuring of the budget.

Given that this is a much needed program, isn't it time that funding for it be made a permanent item in the United States budget? This quarterly game of cat-n-mouse with flood insurance slows down real estate sales and makes prospective buyers more nervous than they need to be.

The National Association of Realtors is supposed to be one of Washington's most powerful lobby groups. Isn't it time they had a few conversations about permanent financing for flood insurance with the powers that be in DC? Let's get permanent funding for the National Flood Insurance Program.

-30-

Home Sales Fall In May

2010-07-01T07:03:00.001-07:00

This just in. Pending real estate sales in May plunged 30% from April nationwide according to the National Association of Realtors.

So, if the big question was what would real estate do once the tax credit ended, I think we're beginning to get the answer. Pretty ugly.

Gurus say home sales will continue to fall during the second half of this year unless there is big, positive movement in employment. Employment figures for the month are due out Friday -- and early indications are that they will be disappointing.

Nuts!

Happy Selling!

-30-

Does This Seem Like 2001 All Over Again?

2010-06-30T06:05:00.000-07:00

From a financial standpoint, does this feel like 1999-2002 all over again? Does to me.

In case you were not around the real estate and investment industry back then, here's a capsulized version of what was going on back in the day.

We were having a recession and traditional paper and equity investments -- like stocks, bonds, mutual funds, savings accounts, commodities -- just were not paying anybody anything. The stock market was up one day and down the next -- and most days it was down. Many people with money couldn't make any money with their money. It was frustrating as the dickens for most of us and some people lost fortunes in the stock market.

Since people who had some money couldn't make any money on their money with traditional paper investments, many of them began to look outside the box and search for other ways to make money with money.

Somewhere along the line, some enterprising soul may have said "Hey, real estate is undervalued in places like Florida, Arizona, New Mexico, the Carolinas, and a place out in the desert called Las Vegas. Let's go to those places, invest in property, rent it for a monthly profit and then sell it to other investors and make money on our money. We don't even have to put much down because we'll use 'creative financing' that allows us to only pay the interest on the mortgages and defer paying anything toward principal. Who cares? We'll sell these rental places in two or three years when the stock market comes back and reinvest the money on Wall Street anyway. By then, real estate values will have gone up and when we sell the properties we'll all make a handsome profit."

For a while they were right. Then, in 2008, the roof fell in. The rest, as they say, is history.

Okay, so why does this feel a lot like 2001 again?

For one thing, is anybody able to make money with money right now?

We're seeing the Dow Jones Industrial average swing wildly from session to session -- down 268 points yesterday alone. S&P is down. NASDQ is down. Equity investors are taking it on the chin and losing money hand over clenched fist. Fear of European debt, uncertainty about China's economic power, national unemployment and underemployment, retail sales jitters, and mis-trust of government economic policies are combining to create an atmosphere that makes it virtually impossible for investors to make money on money.

That's what makes me feel like it's 2001 all over again.

So, I wouldn't be too darn surprised if droves of investors don't start looking to real estate again as a safe haven.

After all, that's exactly what they did in the first half of the decade.

Buying real estate back then was little more than an investment alternative. Real estate became a commodity to many of these investors. For Pete's sake, you didn't think that all of those people who invested in real estate really wanted to own property, did you?

Most of those investors didn't care a rats patootie about owning real estate, and probably would have been happier without it.

What they cared about was making profits. And last time I checked, they call that capitalism -- and I'm 100% in favor of it. But lets be realistic about buyer/investor motivation back then.

You see, what those investors soon found out was that there is a downside to owning income-producing real estate rather than stocks and bonds. Know what it is?

The downside of owning investment real estate is that you have to take care of the property, or hire somebody to take care of the property. If you don't, the property deteriorates and drops in value. Taking care of property means a lot more involvement with the investment than most of these people wanted. With a stock portfolio all you have to do is jump on the computer and see if you're up or down for the week, and then make a nice clean paperless transaction on E-Trade.com. All those real estate investors back then didn't really care about real estate. Their objective was to make money. Real estate was just the tactic that had the best chance of making the largest profit with the smallest downside risk.

Investors want the same thing today.

The most common advice I'm hearing from financial strategists is for investors to "park their money in cash and sit on the sidelines until things straighten out". Sorry, but parking money in cash means the money is not earning more money. Investors want to make money on every dollar every day. So, many investors are none too happy with their financial advisers and brokers who offer such guidance.

Given this kind of financial world, something tells me not to be too surprised if those investors don't start showing up again in the Southeast and Southwest with their checkbooks loaded with money salvaged from ailing stock portfolios. Now, that sounds like 2001-2003, doesn't it?

They'll be looking for bargains and heaven knows there are plenty of those out there right now, offered by desperate sellers all across the country. The reason? Investors know that of all the investment opportunities that exist, only one has consistently moved upward in the long run: real estate. Investors may not really want to own real estate -- it's not very liquid -- but once again it is becoming fairly stable in price and is easily leveraged due to low mortgage rates for those who qualify for the loans. It's perfect for the long term investor, but probably not suitable for the short term day trader-types who thrive on faster action and love market volatility and risk.

So, here's what I'm thinking. With mortgage rates very low, real estate inventories very high, home prices devalued, and the paper investment market tanking, we just might see another real estate buying frenzy from investors who want a better, safer return than Wall Street has been able to provide.

If you're a buyer who is on the fence about making a real estate versus a stock market investment, remember this: I heard on CNBC recently that $100,000 invested in the stock market ten years ago would today be worth $100,000. In other words, there has been no growth in equities for the past decade. As the Wall Street guys would say, the retail investor who only plays equities long has been profitless in the last decade.

So, how's the growth outlook for your equity-based 401-K look now that you own that little factoid?

Despite the recent problems with real estate, I'm quite sure that a home bought ten years ago would today be worth more than the amount paid. Mine is. Plus you can offset your costs of ownership by the monthly rent profits. And you can get some hefty tax deductions, at least for now. Pretty nice, eh?

If you are a real estate agent, the investor market just might be a good place to start looking for new business once you know how to talk investor-speak and understand what an investor is really looking for. Candidly, I did pretty darn good working with investors in the "good ol' days" and believe we just might be seeing a return to that kind of buyer. Why not give it a try?

Happy Selling!

-30-

Three Important Things Happened Yesterday

2010-06-30T05:04:00.001-07:00

In case you missed it, here are some important things that happened yesterday in real estate ...

It appears that the U.S. Congress is going to extend the tax credit for home buyers. If a home buyer had a signed contract by the end of April, it looks like Congress is going to give the buyers until September 30th to get the transaction closed. That's good news for about 180,000 buyers, 15,000 of whom are buying properties in Florida.

U.S. home prices rose 0.8% in April according to the Standard & Poor's/Case-Shiller report. The report tracks the sales of the same homes in a 20-city study. The only cities that did not see price increases were Miami and New York City. Nationally, prices remain down some 30% below their peak in July of 2006. It's a shame this info is so dated. We all already know what happened to real estate sales nationwide in May. I'm going to be interested to see the results for June as well.

Florida consumer confidence fell 3 points in June according to the University of Florida. The reasons? Worry about the BP oil spill in the Gulf of Mexico and the impact it may have on business throughout the state coupled with fear of devastating environmental problems. Also contributing to the state's blues is double-digit unemployment that does not appear to be improving despite the so-called economic recovery. People without jobs don't buy property.

Anyway, just thought you might need to know these things.

Happy Selling!

-30-

Maybe Builders Need To Do Some Advertising

2010-06-24T05:10:00.001-07:00

I've just been thinking about the last article I wrote regarding the huge drop in new home sales in May (see next article down), and it got me thinking about the tough recession we had in the late 1980's.

At that time, I was CEO of an advertising and marketing firm and had held many different positions in the advertising agency business over the years. At this agency we had a number of developers and builders as clients. When that recession hit, we urged each of our clients (and not just the real estate clients) to continue with their marketing programs just as if there was no recession.

Some did. Some didn't.

When it was all over, here's what we found out:

Clients, including real estate developers/builders, who continued their advertising programs with us, did better during the recession than those who reduced or eliminated their advertising programs. Those who continued to advertise controlled a larger market share during the recession than their competitors who cut their budgets in the recession.
Clients who continued their marketing programs recovered from the recession earlier than those who cut or eliminated their marketing activities.
Clients who maintained their marketing programs gained an even larger market share during the economic recovery than their competitors who cut their budgets.

I think those who kept marketing actually stole business away from those who did not continue marketing, although I don't think we ever got any direct marketing data on that point -- it's just a feeling of mine.

What I am not seeing much of anymore is good old-fashioned advertising from developers and builders in this recession, and I haven't seen much of it since the real estate bubble burst in 2006.

I know financial times are tough for builders now and sales are way off. But you have to maintain some kind of media exposure if you want to come through this in any kind of shape at all.

There are still buyers out there, you just have to work harder to find them. Plus, you need to maintain and build your reputation so that when the economy improves people will still think highly of your company and your products. Advertising can do that for you.

If you don't do it, somebody else will and they'll take your customer base, reputation and livelihood along with them.

I've worked for a lot of builders and developers. But I used to do a lot of work for various divisions of one major U.S. developer who had simultaneous projects underway all over the southeast in the 1970's and 1980's. I was always very favorably impressed by their corporate culture and dedication to superior marketing activities. I'm going to give you the basics of their advertising rules. It was quite simple yet extraordinarily effective, and I urge every developer/builder to follow it.

They said every ad must include three things:

Product
Price
Floor Plan

Product: The product is the community in which you are building. Buyers want to live in a nice community, and your ads must always stress the positives of living within that community. Think of it as stressing the lifestyle advantages of the community in which you are building.

Price: Most buyers are shopping within a budget. You have to show that within that community buyers can own a lovely home and still stay within their budget.

Floor Plan: Every ad had to include a floor plan and exterior elevation drawing of at least one home. You can use photos of homes and product, but you need to have a floor plan. People love to review floor plans. They spend time envisioning themselves living in the house within that floor plan. So, every ad had a floor plan ... period.

If we didn't include these three elements in every ad, the ad got rejected. Period.

Look, advertising stimulates markets. That's really its sole purpose. The one thing builders/developers need now is to have some market stimulation to get prospective buyers excited about buying one of your homes in the community where you are building, and to keep your reputation positive and your name in front of people. Advertising is why the companies we represented did well during the 1980's recession and those who did not follow our recommendations to continue marketing, quite frankly, didn't do as well.

I know business is tough now. I know new construction just had a bad month -- the worst ever if you believe the reports. But now is the time to jump in with both feet and take advantage of a situation which may help you grow big-time during the next year or so while the market recovers.

What situation?

Simple. Your competition may not have read this blog article and might be cutting their advertising and marketing budget in order to save a few bucks.

Now's the time to assault your competitor's customer base by continuing your marketing program. You'll increase your sales by converting his customers. You'll improve and expand your reputation at his expense. You'll start coming out of the recession now while he wallows in it even longer. Most importantly, advertising throughout this recession will allow you to set your sights for even higher expectations in the future while your short-sighted competition is still looking for a way out of this mess.

You can do all that by stimulating the market with a well-orchestrated marketing/advertising plan. How do I know? I'm old. I've been there before. And I've done it for builders and developers all over the place.

Happy Selling.

-30-

More Fuel For The Double-Dippers? Maybe.

2010-06-24T03:39:00.001-07:00

Those of you who believe that real estate is looking at a double-dip recession -- or believe that the first recession is still with us -- got a little more fuel for your fire yesterday.

The United States Commerce Department announced that new home sales sank almost 33% in May. This is the largest one month drop ever recorded. If that pace continues, the government estimates that the country will build only 300,000 new homes in the coming year. That would be the slowest new home sales rate since 1963. New home sales have now fallen 78% since reaching their peak in July 2005.

The reasons for the drop in new home sales? You probably already know them, but high among the reasons cited are ...

end of the federal tax credit program;
high unemployment;
low job security among those currently employed;
tight credit conditions.

The backlog of unsold new homes across the country now stands at 213,000 -- about an 8-1/2 month supply given today's sales pace. A healthy level would be about a 6 month supply of unsold new homes. The median sales price for these homes stands at $200,900, down 9.6% from a year ago and down a full 1% from April to May.

Here's something interesting: Before the housing bust in this country, new home sales made up roughly 15% of the housing sales. Today, new home sales only account for about 7%. Clearly, the nation now sells less than half the number of new homes that we did a few years ago.

So, if you're among those real estate bears who think we're looking at a double-dip real estate recession, this data tends to support your opinion.

If you think this is just a continuation of the old recession, this data might lend support to your bearish view.

But if you're bullish like me and think that this drop is what you should expect after having a couple of fairly strong months in sales resulting from the tax credit stimulus, then you may not be quite so pesimistic. I think at any given time, there is a finite number of qualified home buyers. Many of those buyers bought or built property in the late spring to take advantage of the tax credit program. Now, we have to wait for a new crop of buyers to come into the market, get qualified for their mortgages, and start shopping for new and existing homes.

Look at it this way. Suppose you had a shoe store and for a couple of months you had a sale where every pair of shoes was 25% off the regular price. The sale comes to an end. What happens? I'll bet that sales in the following month fall off substantially. Why? Because everybody who needed new shoes bought them during your sale. Now you have to wait for new buyers to enter the shoe market -- and they will eventually.

Sound too simplistic? Well, maybe. But only if you believe economists and real estate pundits who make a living from overly complicting simple market conditions.

At least, that's what I hope is happening. Give the market a little time before you start predicting more doom and gloom for Pete's sake!

Happy Selling!

-30-

This Talk Of A Double-Dip Recession Might Be A Bunch Of Baloney

2010-06-23T03:18:00.000-07:00

Having had a night to mull on things, this talk of a double-dip real estate recession may be a bunch of baloney, at least for the Tampa Bay area.

It might be a bunch of reporters trying to sensationalize the effects of a little step backwards in the recovery in an effort to build ratings and improve lagging circulation -- like that never happens. I can tell you from my days in media that nothing builds ratings and sells papers like news of a disaster.

Or, it might be some high profile real estate gurus who want a little face time on TV so they can blow things out of proportion, scare the you-know-what out of everybody, and justify their overpriced existence.

Sure, sales may have dropped 2.2% from April to May nationally, but the results around here weren't that bad.

Consider this: In Tampa Bay, 2,921 homes were sold in May. Heck, that's up about 20% from the same time last year, and down only 1% from April's sales figure. The median price for May of this year in Tampa Bay was $135,600. That's an increase of 2% from April.

I'm not an economist but this just does not sound like another real estate recession is headed to Tampa Bay anytime soon.

And remember, the only real estate market trend that counts is the trend for the location of the property. That's because real estate is not portable. You can't pick up all the properties that are for sale in a bad market area and magically transport them to some hot market location where sales are more brisk and prices are higher. It seems to me like Tampa Bay real estate is not setting the world on fire, but by the same token we're doing a lot better than other places right now.

Sure, there are a lot of bad economic signs for the nation as a whole right now, and Tampa Bay has it's share of economic stress, but the local housing trend for May just doesn't look that dismal to me. And after all, it's local sales that matter.

I suggest staying optimistic about things and keep on doing our best in these tough times. Oh, and let's all (including me) stop paying so darn much attention to these real estate gurus who may actually have a different agenda than just reporting the real estate news!

Happy Selling!

-30-

More Evidence Of A Goshdarn Double Dip Recession In Real Estate

2010-06-22T14:04:00.000-07:00

Okay. Here's what you might hear on the news this evening. Or, you might read it in the newspaper on Wednesday.

But remember, you heard it here first. (Finally, I get to scoop the St. Petersburg Times!!!!)

Numbers just released about noontime today indicate that existing home sales took a 2.2% dip in May compared to April. That's a big goshdarn drop in one blanketyblank month. (Remember, this a a G-rated blog.) That number is for the nation as a whole, not just for Pinellas County. Think it is serious? The housing news drove the Dow down about 150 points this afternoon on fears that housing will lead the country into the aforementioned double dip recession. So, I'd say the news was devastatingly bad. And remember, this is on top of that terrible report last week about new home start-ups taking it on the chin in May as well. So, both new construction contracts and existing home sales fell sharply in May. Dadgumit!

If you read my last story about a double-dip recession for real estate, I kinda played it down and was hopeful that it was just the pessimists in the world who were seeing the dark side of things and concluding that the real estate market was once again sinking into a recession.

Well, this drop in sales -- and the size of the drop was much larger than expected -- may indicate that my optimistic hopes for real estate may be wrong. Here's why:

We have a weak economy that is not improving as rapidly as the President would like.
We have huge unemployment.
We have funky things going on in Europe with their euro currency and sovereign debt.
Many European countries are about to have a big austerity program which will restrict their financial ability to buy much real estate here.
Loads of houses are still on the market nationwide and millions of people are upside down in their current mortgages so they can't sell their house and buy a new one.
Mortgagees are holding hundreds of thousands of homes off the market. When they release these homes for sale, the danger is that those homes will drive prices down even farther.
Bankers still continue to make it very difficult for mortgage holders with distressed properties to close a sale -- which is why I read recently that only 1 in 10 short sales successfully close. (Frankly, I don't know if that statistic is accurate, so don't quote it too much.)
And, on top of all this, the United States is going to see higher taxes beginning in 2011 so people will be taking home even less income.

Boy, this does sound kind of gloomy doesn't it?

Happy Selling!

-30-

Is Real Estate Heading For A Double-Dip Recession?

2010-06-20T06:30:00.000-07:00

Boy oh boy, just when I thought real estate was starting to move up a little the real estate gurus on TV and in print media are hedging their bets and saying we should all be prepared for another recession in real estate -- or at least a continuation of the one we haven't gotten out of yet.

Frankly, I wasn't expecting the real estate market to bounce back in a V-shaped recovery like some were predicting two years ago. But I did not think we would have back-to-back recessions in the same industry.

The gurus are looking at a couple of things that they say indicate more trouble ahead for real estate across the country. Here's what on lady reported in a "round-up" story on cable TV this past week ...

First, housing starts fell 10% in May as compared to April. They say that means real estate is headed downward. They also point to a drop in orders for lumber by builders. That means construction companies are not getting contracts for new homes. Blame all this on the end of the tax incentive program, say the gurus.

Second, employment reports in April were disappointing and included a lot of part-time jobs for census-takers instead of regular jobs in private industry. If folks don't have jobs, they aren't going to buy houses. I think that's a fair observation, although not particularly astute.

Third, mortgage rates are flat. The woman on TV said that since mortgage rates are not going up anytime soon, there is no financial incentive for people to hurry out and buy a home now. According to that kind of logic, I guess we should beg the bankers to take more of our money so that the real estate market can be stimulated -- can you believe that kind of logic?

Finally, the euro versus the dollar thing is an important matter. Since the euro is falling against the dollar, Europeans are not coming to the United States to buy real estate since it appears so expensive to them. Okay, maybe that's true. But how big a percentage of gross real estate sales are European sales anyway?

Naturally, I've got some comments on these points.

First, I think housing starts and home sales in general fell in May because so many people took advantage of the tax stimulus in April. At any given time in this country, there are a finite number of people who want to buy or build a new home. Once they've taken advantage of the incentive and contracted for their new home, what can you expect but a reduction in contracts during the coming month? Now that the incentive has been removed and things are back to "normal", there's bound to be a reduction in home buying activity. We simply have to wait awhile to let new buyers enter the market in coming weeks or months. To me, this is just common sense and any first year marketing student understands it. But perhaps real estate gurus and journalists don't get it.

Here's something else about this drop in real estate sales in the past month. I think this oil leak in the Gulf of Mexico has cast a shadow over the entire Gulf region and put people who live in the area in a big blue funk. I think they are worried about the effects of the on-going spill on lifestyle, property values and envoronmental quality. I think those worries have an adverse effect on real estate sales. To me, it's just another reason to thank BP.

Second, unemployment is a bona fide issue for real estate. This country simply must generate more jobs in the private sector. So, while unemployment is an indicator of things, the real problem is the economy in general which needs a shot in the arm so that more Americans have good jobs. In fact, we could go back to the first matter and say that the reason housing starts and contracts fell in May had a lot to do with the overall economy, not the tax incentive. Just look at what happened to the stock market in May! It certainly took the incentive away from buyers of many items, not just real estate.

Third, I think raising mortgage rates as a way to stimulate immediate home sales is just plain dumb. If you want people to buy homes during a period of economic crisis, you have to make homes more affordable, not less. Raising the monthly mortgage costs is a dis-incentive to home sales, not a way to speed up purchasing.

Fourth, this thing about the euro makes sense to me even though I don't really understand why foreign exchange rates move up and down. I think a lot of it these days has to do with the amount of sovereign debt the European countries are holding, and the amount of confidence other countries have in their ability to make their bond payments and pay other debt instruments. But I do understand how it can affect home sales by Europeans in the U.S. and believe it could have a negative impact, so score one for the lady guru on this issue.

So, I think some of these fears of a second recession or a prolonged current recession are legitimate, but some of these guru comments are not legit in my humble opinion. It all just proves to me that many journalists reporting on real estate have never actually SOLD real estate for a living and don't even understand the basics of marketing or economics. I think that to them, real estate reports are just another "beat" that they have to file stories on -- like the "police beat" or the "sports report" or dozens of others.

Hey, if you don't have to understand anything about economics or market conditions or business, maybe I should get a job reporting on real estate!

Happy selling!

-30-

Short Sales May Not Solve All Problems

2010-06-18T08:32:00.000-07:00

If you think a short sale or foreclosure will solve all your real estate financial problems, you better think twice.

Recently, mortgage companies have been more and more active in trying to collect ALL the money owed. They may approve your short sale, but that does not mean you're out of the financial woods.

In Florida, lenders have the right to pursue borrowers for the difference between what their house sold for and what the borrower actually owed on it. This is called a deficiency judgement. Even though your house has been sold through a bank approved foreclosure or short sale, the deficiency claim can still be filed by the lender.

From what I am told, the lenders don't always file a deficiency suit. They kind of wait-n-see who has assets that are worth going after. If you have assets, you might receive a shocking letter in the mail that says the bank wants the balance due.

The other thing I have been told is that if there is a second mortgage on the property, you are more likely to face a deficiency claim. The second lien holder often gets virtually nothing from the short sale or foreclosure sale. In fact, they are generally last in line to get money from your sale. These lenders are much more likely to to pursue the deficiency suit.

Remember this: Just because the property has been sold in a bank approved short sale or sold by the bank through a foreclosure sale, borrowers should never assume the amount of the deficiency has been forgiven. You should always check with your attorney to receive advice on how to avoid a deficiency claim. It might be that bankruptcy can help you or a written waiver from the lender stating that the shortfall has been forgiven. Discuss these options with your attorney.

-30-

April And May Sales Report

2010-06-09T04:32:00.000-07:00

One of Tampa Bay's best real estate agents, Debbie Deeb of Prudential Tropical, called me to ask why I have not written my monthly real estate listings and sales round-up article for Pinellas County for April and May. Gosh, it's nice to be missed!

Truth is, I decided to act like a big-shot business writer and prepare one of those super-insightful, multi-faceted, in-depth "think pieces" that would make me a candidate for a Pulitzer. This article would delve into the mysterious underworld of real estate sales versus government tax rebates so we could see the effect of the loss of rebates on real estate sales. You know, one of those "comparison and contrast" stories everybody likes to read so much.

Well, to put it in journalistic terms, I got scooped!

Apparently I was not the only writer out there who thought it would be an interesting and insightful story. In fact, the guys down at the St. Petersburg Times used the idea and put it on the front page of Section B today. Just look for the huge headline reading "Housing Revival Fleeting". The subheadline gives you an instant summary: "The first-time buyers credit expires and so do positive bay area sales and price trends."

To put it in a nutshell, the newspaper has reported that Tampa Bay home sales fell 5.4-percent in May compared with April, and home prices dropped another 3.1-percent. The Times got this info from an outfit called Home Encounter based in Tampa.

So, perhaps the housing meltdown is still with us. Perhaps the recent spurt in real estate activity was directly linked to the tax credits. I think the only way to know for sure is to take a look at listings and sales for April and May and see just what has happened. And remember, this data is from MLS for Pinellas County -- not for "Tampa Bay".

First, let's look at the Absorption Rate (AR). AR as you know is the actual inventory turn and is calculated by dividing the number of units sold in a month by the total number of listings in the MLS system for the county.

For single family homes, the AR for April stood at 13.0-percent. The AR for May dropped to 12.5-percent. So, a larger percentage of listed single family homes were sold in April than in May.

For condos, the AR for April was 10.6-percent. The AR for May fell to 9.1-percent. So, a larger percentage of listed condos were sold in April than in May.

The AR for those two months tends to support the information in the Times article that without tax credits, sales are starting to lag.

By the way, there were 6,057 single family homes in the MLS in April and 6,270 listed in May. In April, 786 single family homes were sold, and in May 786 single family homes were sold. So, we had the same number of sales in both months but April had fewer single family listings, thus the slightly higher AR. So you could question the validity of the conclusion that tax credits had a real influence on sales from April to May, couldn't you?

Condo's had 5,351 units listed in April and 5,375 in May; that's virtually identical. There were 568 condos sold in April and 489 sold in May. While the number of listed condos is pretty much the same for both months, the number of sales is quite a bit different, and that explains the big difference in the AR for April to May for condos and tends to support the theory that the loss of tax credits did have a negative impact on condo sales.

The reason we need to know what is going on related to the impact on sales of the loss of tax credits is to know if the real estate market was ARTIFICIALLY stimulated or not, and if the stimulation given by the tax credit is sustainable.

If sales start tanking once again without the tax credits, well, we know the answer to those questions. It then remains to see if we can do anything about it. If we can't, we may be headed for a double dip recession in real estate ... something that a lot of other gurus and commentators think is very possible and quite likely. Just tune in to CNBC and listen to the real estate reports several times daily and it doesn't sound real good for real estate nationally.

Locally, the Times writer quoted Stan Humphries, chief economist for Zillow, as saying that prices in Florida are still inching lower and will continue to drop until 2011 whereas the market nationally will bottom out in September of this year. So, recovery in Florida will lag the rest of the nation.

Humphries may be correct. But he could just as easily be wrong and it could be longer than 2011 before we bottom-out. He's probably looking at real estate data ... you know, things like inventory, short sale reports, foreclosures, housing demand and the like and trying to project how long it will take to sell off all the listings and ghost inventory around the country.

To me, that's a real estate guy trying to project the end to a real estate problem without taking into account all the other economic conditions that impact the real estate industry. Most notably, he may not be accurately projecting job loss and how long it will take people to find gainful, non-government employment at salaries that are large enough and stable enough to qualify for a mortgage.

Maybe he's not talking about the terrible problems associated with sovereign debt in Europe and the horrible pounding the Euro is taking versus other currencies in the forex markets which will likely have a negative impact on European real estate sales in the U.S.A. Those problems will ultimately impact us in Pinellas County real estate.

And frankly, I'm wondering if Humpries really appreciates the negative impact of all the foreclosed properties that are in Florida. By some estimates, banks are currently shielding over 1-million foreclosures in Florida alone. I wonder if Humphries has factored that into his 2011 forecast?

So, what do I think? I think we sold a bunch of houses as a result of the tax credit program and I think that's a good thing. Now it's gone. We'll know the full impact of the departure of the tax credit program in another month or two. I have a feeling that what we will discover is that we've sold fewer homes to people who want to live in them, and more homes to investors who want to do a little speculating in real estate -- especially so if the stock market continues to be volatile. Gosh, this is starting to have a familiar ring about it. Kind of like 2003 and 2004.

And I think one other thing. I think real estate agents, brokers, and prognosticators need to broaden their view on real estate recovery. To a great extent, the problems being confronted by local real estate involve two words -- Global Economy. Many of the problems faced by real estate today have as much to do with world economic conditions as they do with local sales volumes and pricing.

Don't believe it? Do this. Go home one afternoon this week and turn on CNBC -- they're all about business news. Keep track of how many times you hear the terms "Sovereign Debt", "Euro Crisis", and editorial discussions about foreign exchange rates and the effect they have on imports, exports and purchases by Europeans.

Along with that, keep track on how many times you hear the term "non-government employment".

Then, apply what you hear to the concept of having foreign investors buying property here. Foreign investment has been a very important part of Pinellas real estate for many years. What you will hear now is frankly quite discouraging. It all has to do with the falling Euro. I even sat in on televised discussion a week or so ago when the question was if Europe and the European monetary system can survive for more than another year or two. Right now, it appears that nobody has much confidence in Europe in the long term. It's a shame.

As far as U.S. employment goes, keep in mind that the so-called economic recovery in the United States is not creating many non-government jobs within the country. Without jobs and the stable incomes that accompany them, real estate agents won't have many buyers who can qualify to buy a home. Where are all the jobs? Well, let's just say they are America's favorite export.

The problem is, the real estate industry can't make large contributions to solving either of these problems because global economic recovery, job creation and foreign exchange rates are not our areas of expertise. But all these problems impact local real estate sales.

I think it would be best if we all broadened our outlooks when discussing the problems and possible solutions to the real estate problems, but as real estate agents and individual homeowners we also need to recognize our limitations. We need to think globally and act locally. Gosh, that sounds kinda like a bumper sticker, doesn't it?

Happy Selling!

-30-

March Real Estate Sales Looked Pretty Good!

2010-04-20T11:48:00.000-07:00

I'm a little late getting this month's report out to everyone, so for some of you this may be "old news". If so, I'm sorry ... I had some other things to get done in the last week or two.

March looks to have been a pretty good month in the world of real estate in Pinellas County. Not great, but pretty good and certainly improving.

Let's start with the Absorption Rate (AR) which, as you know by now, is calculated by dividing the number of units sold during the month by the total number of listings in the Multiple Listing Service.

For single family homes, the AR for March jumped to 11.5% versus February's AR of 7.9%. For condo's, the AR for March was 9.5% versus February's 6.6%.

Some people have asked me recently what the AR is and what it means to them as sellers. Well, the AR is actually the inventory turn. It tells you how long it takes, on average, to sell a property. For example, this months single family AR is 11.5% and February's was 7.9%. Since the AR is expressed as a percentage, all you have to do is divide it into 100 and that gives you the number of months of inventory on the market. For March, the AR was 11.5% so that means there was 8.7 months of inventory on the market. The larger the AR, the faster homes are selling (at least, theoretically).

Single family listings remained about the same in March as they were in February. In March, there were 6,316 single family homes on the market in Pinellas County versus February's 6,346. A difference of only 30 properties.

The big jump, and the reason we have such a big increase in the AR, is because during March 727 single family homes were sold. In February, only 502 were sold. That's a nice increase and it is what we want to see. Of course, some of this is certainly due to the home buyer's incentive program which will end on the last day of April. So, I think buyers were trying to take advantage of this money-saving government program. We'll see how sales fare once the program ends.

The median price for March dropped a little compared to March of 2009. The March 2010 median was $138,500 as compared to $140,000 for the same period last year. That's a drop in median price of only 1.1% and I continue to see more price stability entering the local single family home market.

For condominiums, there were 5,526 units listed for sale in the MLS system for March as compared to 5,505 for February. Again, a difference of only 21 units. But once again, the important number is that condo sales in March were 523 units sold as compared to February's 365 units sold. As with single family homes, I think condo volume is related to the coming end of government incentives.

The median price for condos is still taking it on the chin. In March 2010, the median was $110,000 compared to March 2009's median price of $125,000. That's a drop of 12% for the two time periods. Condo prices might be starting to show more stability, however, as the median for both February and March 2010 was $110,000. We'll just have to wait and see where condo prices move during the coming months.

My sources tell me that even though mortgage interest rates now are hovering at near historically low figures, we might start to see some upward pressure on them in the coming months. Perhaps buyers would be well advised to lock in rates now as best they can, and get that "dream home" under contract soon.

See you soon!

-30-

Even Though The Country Is In Trouble, Congress Adjourns Without Extending Flood Insurance Program

2010-03-31T04:34:00.000-07:00

If you're on a first name basis with any member of the United States Congress, please ask them this very simple question: How in the world could you be taking your spring recess without having extended the national flood insurance program?

Do you political types have any idea how important that program is to any kind of real estate recovery?

Do you even care?

Here is the simple fact: Without flood insurance, many real estate transactions can not close.

True, congress is scheduled to take up the renewal of flood insurance when it comes back into session on April 12th. But in the meantime, properties requiring flood insurance can not close because no new flood policies can be written. Sure, it's only a two week delay (we hope), but a lot can happen in a real estate transaction in two weeks -- and many of those things are not good.

This is the third time in the last few months that the flood insurance program has temporarily expired. The reason? Political wrangling. This time it is because the renewal of the flood insurance program is connected to some new legislation that extends programs for the unemployed.

I'll make you a bet. I'll bet that support for the legislation is divided along party lines. Seems like everything in Washington comes down to party lines, doesn't it? In Washington, even if something is a good idea, if one party supports it the other party will oppose it without offering anything better in its place. Who suffers? The American people.

Well, here's my two cents worth. Congress should make the national flood insurance program a permanently funded program that is always part of the national budget. Don't give legislators a chance to muck around with it or play politics with it anymore. Without flood insurance it is very hard to sell property in places that have beaches, rivers, lakes, ponds, creeks, rain, or even drainage ditches. And after all, we are trying to make real estate recover. So, make flood insurance a permanent program and make its funding permanent.

That's as far as I'm willing to go in writing about a politically sensitive matter. I don't want to get anybody upset with me.

Happy Selling!

-30-

Tampa Bay Area Home Prices Still Falling

2010-03-31T03:56:00.000-07:00

In the last year, I don't know how many home owners have told me that they have decided to wait for the market to recover before placing their homes on the market. In their mind, its just a matter of time.

Well, time is not on their side.

By waiting, their Tampa Bay property is most likely going to be worth even less than it is now.

Want proof?

The latest S&P/Case-Shiller home price index reports that Tampa Bay homes fell another 7.4 percent for the twelve months ended January 2010. Only Las Vegas saw a deeper decline in home values -- a whopping 17.4 percent loss. Tampa Bay currently ranks as the second biggest loser behind Las Vegas.

Many economists and real estate gurus are predicting further price softening as the government's home buyer tax credit program of $8,00 or $6,500 comes to an end after April 30th. In addition, interest rates on home mortgages will probably move upward since the Federal Reserve will stop supporting mortgage markets. Moreover, in the Tampa Bay area, nearly half the homes sold are short sales or foreclosures which are sold at less than market value and further drive down real estate prices. Finally, the area suffers some of the worst unemployment in the nation, with an unemployment rate of about 12.5 percent of the available workforce -- and unemployed people don't buy homes.

None of these things bodes well for real estate markets to rebound anytime soon. So, the longer you wait, the less valuable your property becomes.

See why I say that time is not on the side of the seller?

Yes, there was a slight rebound in housing prices last fall. But recent bad economic news has virtually destroyed any gains that might have been seen then. As an overview, Tampa Bay prices have dropped 42 percent since reaching their peak in July, 2006. Prices today hover at about the same level as they were in May of 2003 -- seven years ago!

So, what's the moral of this story? Well, you can probably draw a lot of conclusions but here's the one I like: If you need to sell your property, put it on the market now. If you are waiting for prices to return to some high level, well, you might be waiting for a very long time.

So, sell it now. Take your financial lumps. Get on with your life. Waiting for prices to come charging upward may prove to be a very bad strategy.

Happy selling!

-30-

Realtor Magazine Just Ticked Me Off

2010-03-19T11:07:00.000-07:00

I've been in the real estate business for a long time. During all those years as a professional real estate agent, it was drilled into my brain that there is no such thing as a national real estate market.

Why?

Because real estate markets depend on local economic conditions. If the local economy is growing, jobs are being created, mortgage money is plentiful, and home inventory is adequate. Sure, in a market like that local real estate sales are probably doing great.

But, we all learned, in another city or state, jobs could be being exported offshore, wages could be depressed, plants and factories could be closing, mortgage money could be difficult to obtain, and the market may be flooded with available homes for sale. In that case, the real estate market could be in bad shape.

And, we all learned, the thing about houses is that they are not portable. You can't pick up your house and move it to some area where the market is hot and then sell it. If we could do that, half the homes in Florida, California, Las Vegas and numerous other areas would be getting shipped someplace to be sold off.

So, what moves across my e-mail this afternoon? Why an article from the National Association of Realtors.

What did they report?

Nothing much. Only that there appears to now be a national real estate market and it is improving!

Yes, according to Realtor Magazine, "Housing Experts Say Real Estate is Recovering". The magazine states that some of the nation's leading economists believe the housing market has turned and better days are about to arrive.

They claim that jobs are on the increase. They believe credit is improving. And they believe that affordable homes will overcome impediments such as rising interest rates and the elimination of the Federal stimulus program.

Who are these rah-rah gurus? Why, none other than Dean Maki, Chief Economist for Barclays Capital. And Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College. Even Bruce Kasman, Chief Economist at JP Morgan Chase was quoted in the article as saying, "The underlying trend is turning positive."

Somebody ought to take these three guys to a meeting of local real estate agents in Tampa Bay and let us inform them that there is no such thing as a national real estate market for them to spout off about. The only market that matters is the one in which the property you own is located. And since you can't move the house to a better part of the country, you better take into consideration all the bad stuff that might be happening where you live.

If you happen to be in Tampa Bay, you have unemployment hovering around 13 percent. You have prices continuing to fall by about 11 percent annually according to Mr. Case's latest price index report on this area. You have mortgage interest rates that are projected to jump by at least a point over the next few months that a chief economist from JP Morgan Chase ought to know about. You have builders who have just finished 2009 with the worst year on record and have projected an even poorer year for 2010. And locally we have something in the neighborhood of half our sales being either short sales or foreclosures. In addition to all that, we have about a 14 month supply of single family home inventory in the MLS right now, and heaven only knows how much ghost inventory is floating around in Hillsborough, Pinellas and Pasco Counties.

So, from where I sit, if this is a real estate recovery it looks pretty lame to me. But then, I'm just a local real estate agent. What do I know?

Here's the point of all this: The "underlying numbers" that economists are always talking about only matter when they are the numbers you have to deal with in your local market. There is no national real estate scene. And you guys ought to know it.

-30-

A Tip-of-the-Hat To James Thorner

2010-03-19T05:28:00.000-07:00

Did you read James Thorner's column, (Un)Real Estate, in the St. Petersburg Times for Friday, March 19th?

If you have an interest in Tampa Bay real estate but didn't read Thorner's words, go buy a copy of the paper. Or borrow a copy of the paper. Or have somebody send you a copy of his story. Or go to the website.

No matter how you do it, get that column and read it. Study it, in fact.

Finally, somebody is "telling it like it is".

Thorner has correctly pointed out that the so-called real estate recovery is on shaky ground around Tampa Bay. He comes to this conclusion based on some darn convincing evidence from three sources: 1. Florida real estate agents have reported an 11 percent price decline in Tampa Bay from December to January; 2. The S&P Case-Shiller Home Price Index reported a drop in prices of 11 percent from December '08 to December '09 around here; and 3. Discouraging reports from the Greater Tampa Association of Realtors about recent sales.

He could easily have added median price declines from the Pinellas Realtor Organization as a fourth source of discouraging news for home sellers.

Like you, I already knew that prices were continuing to fall in this neck of the woods. Ask any real estate agent and he or she will quickly point out that despite an increase in the number of properties sold recently, the prices for those properties have continued to decline since peaking in 2006. Sure, a few isolated neighborhoods have staged modest price increases lately and the rate of decline has been reduced in recent months, but for the most part the area is still looking eyeball-to-eyeball with declining property values.

What I like about Thorner's story is that he correctly tells us why this price decline is likely to continue, to wit:

Foreclosures and mortgage defaults: Thorner points out that another bunch of Alt-A Loans will likely start defaulting in greater numbers this year. Alt-A's are mortgages for moderately risky borrowers and rank somewhere between subprime and prime. Thousands of these types of adjustable rate mortgages are scheduled to reset this year and it is expected that many of these mortgages will eventually go into bank foreclosure. REO properties (homes owned by the bank) generally sell for very large discounts and tend to drive down the prices of other properties.

End of government subsidies: The home buyer tax credit programs will end in April and June. These programs help to support prices. When they end, it is likely that prices will be lower without the government's supportive program.

Rising Mortgage Rates: The reason mortgage rates are so low now is because the Federal Reserve has been propping them up. Those props are being withdrawn pretty soon, so it is likely that mortgage interest rates will rise. I hear on the grapevine that mortgage rates will likely jump a full point, from 5 to about 6 percent or even a bit higher for a thirty year fixed loan. Thorner reported the same thing in his column. We'll have to wait and see how high they go. But higher mortgage rates mean higher monthly payments, and that means buyers will have to purchase their homes for less money or purchase less expensive properties. No matter what, it's not a good situation for a real estate recovery.

Record Low Housing Starts: 2009 was a record low year in housing starts for Tampa Bay builders. They have predicted that 2010 will probably be worse. You would think that fewer new homes means less competition for those needing to sell existing homes. You would think that such a circumstance would help to improve the prices for existing homes. Ahhhh ... but you ignore the employment problems.

Mind-Boggling Unemployment: Thorner reports that Tampa Bay unemployment reached 13.1 percent in January. In Pasco County, it's darn near 15 percent. With fewer jobs, there will be fewer homes sold. Simple as that.

So, it seems that the deck might continue to be stacked against a meaningful real estate recovery for the foreseeable future. For sellers, it doesn't really look too promising unless you can sell for a low price. For long term buyers, I think you should act now before the mortgage rates take a jump and while you still might be able to get in on the government subsidies if you act fast. For "flippers", well, I think I'd find another line of gainful employment.

Thanks to James Thorner for a very informative article that pretty well summarizes the whole darn situation.

Happy selling!

-30-

February Was Flat

2010-03-12T10:19:00.000-08:00

Some years ago, those of us in the real estate business in Florida and especially in the Tampa Bay area, used to really look forward to the winter months of January, February and March. Why? Because that was "the season". "Winter Visitors" often became "Winter Buyers" and real estate sales always took a hefty jump when the "snowbirds" arrived. It was great!

Well, times have changed. This winter's buying season is far short of what it used to be "back in the day" and the unseasonable El Nino weather has not helped one little bit.

Let's take a look at how we fared in February by first checking out the Absorption Rate (AR). The AR, as you know, is calculated by dividing the number of units sold in a month by the total number of listings in the MLS system.

For February, the AR for single family homes was 7.9 percent as compared to January's 6.8 percent. That's an improvement, but nothing to really brag about.

Condos seemed to do a little better. The AR for condos in February was 6.6 percent; up from January's 5.7 percent figure. Actually, that's a pretty good increase as you will see once we look at the raw number of sales.

Single Family Home Sales

During February, the MLS system had a total of 6,346 single family homes listed for sale. In January there were 6,399 -- virtually the same number. Sales of single family homes did jump up a little in February as compared to January. In February there were 502 single family homes sold in Pinellas County while in January the sales figure was 438. That's a nice little jump and explains the upward movement in the AR for February.

By the way, just so you will remember it, in February of 2007 there were 11,003 single family homes in the MLS. Ahhh, the good ol' days!

The median price for homes in February 2010 was $130,000. In February 2009 it was $139,900. That's a drop of 7.1 percent in twelve months.

Keep this in mind as well: in October 2005, the median price for a single family home in Pinellas County was $276,000. And yes, if you bought then you probably are underwater now.

Condominium Sales

In February, there were 5,505 condos listed for sale in the MLS. In January, there were 5,503 listed. A net gain of 2 listings.

Condo sales, on the other hand, show some real improvement. There were 365 condos sold in February as compared to January's 312. So, that explains the jump in AR for condos.

The median price for condos continued to fall as compared to last year. In February 2010, the median price was $110,000; in February 2009 it was $117,500. That's a drop in median price of 6.4 percent for the year just ended.

Now, let's all get ready for some big improvements in condo sales for March. They just sold about 50 or 60 units downtown at The Signature through an auction. That's going to make March's figures look really great, but don't be fooled by it. It will probably raise the AR and the median price for condos by quite a bit.

Just in case anyone out there is keeping track of such things -- and let's hope you have more to do in life than keep track of this kind of stuff -- there are now 11,851 properties for sale in the Pinellas MLS. In February of 2007 there were 18,242 properties for sale.

Now you might say that's really great, we're cutting down the inventory and that should help bring prices back. Malarkey.

Sure, real estate agents have sold quite a bit of property in the last three years, but an awful lot of this decrease in inventory is the result of sellers who have simply given up and taken their property off the market or found renters for them.

Also, keep in mind that mortgage bankers have been holding off the release of a lot of foreclosed properties in order to keep from flooding the market and driving prices even lower. This so-called "ghost inventory" will have to be disposed of before we can start to talk about a true real estate recovery.

Still in all, the recovery starts with the very next sale. So good luck and happy selling!

-30-

What Makes A House Overpriced?

2010-03-08T08:06:00.000-08:00

In the past few months, I've had a number of conversations with sellers who simply do not seem to understand why their property is overpriced and what that REALLY means.

Let's say that we're trying to sell a house in a nice neighborhood where people have been remodeling and fixing up their homes for the past few years.

Our subject property, however, was last remodeled in 1975 and it looks like it.

Everything in the house works fine -- the baths are all A-OK, all the kitchen appliances are in top-notch condition for their age, and those window air conditioners cool things down just fine in the summer. I even like those little tiny 1-inch hexagonal white tiles on the bathroom floor.

As far as the seller is concerned, his house is just superb.

Problem is, buyers don't think the house is so superb.

Buyers want the latest and greatest as far as bathrooms, kitchens, central heating and AC goes, along with lots of other fancy doo-dads that add to the livability of the home. When those things are not there, buyers want to add them once they buy the place.

So, sellers need to remember that if a buyer is going to remodel the house after he buys it, he can't pay you top dollar for it. If he does, by the time he gets finished paying for all those doo-dads the house will be way overpriced for the neighborhood. In other words, if the house would be worth, say, $300,000 all fixed up, and it will cost $75,000 to pay for the remodeling, the buyer can only afford to pay you $225,000 for the house. And that is your top dollar.

I just love that word: doo-dads. I used it in an advertisement I wrote about 30 years ago and haven't used it since. Neat word, don't you think?

Anyway, a property that is suffering from, well, let's call it benign neglect, is not going to sell for top dollar even though the seller wants it to. Not gonna happen. Sellers need to look at their property with a realistic idea as to its true value today and not compare it with other houses that have added all the doo-dads. Those houses are not comparable. To be honest, real estate agents make the same mistake sometimes when doing CMA's -- and agents should know better.

Realistic pricing will get houses sold even in today's market.

Happy Selling!

-30-

Renting Versus Buying

2010-03-04T05:24:00.000-08:00

Should you continue to rent or would you be better off buying?

Sometimes, that's a hard decision to make. It's not always a matter of money. You need to consider a lot of things including how long you intend to stay in a given area, your career prospects, family expansion plans and the like. These and countless other matters will have an impact on your rent versus buy plans.

But let's assume for the moment that you can boil it all down to a financial decision. Based on what you are paying now for rent, how much house can you afford to buy ... and will that amount get you the kind of house you want in a neighborhood where you want to live?

John Fenech of Sunbelt Lending e-mailed me some info on that very subject this week. He converted rent payments to mortgage loan amounts so you can see just how much house can be purchased for the same amount of rent money. Here's what John sent me ...

Payment --------------------------Loan Amount

$1,105/mo ------------------------$150,000
$1,399/mo ------------------------$200,000
$1,745/mo ------------------------$250,000
$2,211/mo ------------------------$300,000
$2,480/mo ------------------------$350,000

Now, all of the options are based on full documentation loans, 30-year fixed with no pre-payment penalty. The principal and interest payments are based on an interest rate of 5.00 percent and subject to change until you apply. Taxes and insurance, which is included in the payment amounts, are realistic estimates but could be higher or lower depending on your particular situation. The point is, this is probably pretty accurate.

With so many houses, condos, and town homes on the market today, you can probably find the kind of property you're looking for in a neighborhood where you would like to live. And, if you're already making rent payments on time, well, why not buy?

Give it some thought.

-30-

How Do Home Buyers Shop?

2010-03-01T13:47:00.000-08:00

Ever wonder how home buyers find out about houses that are for sale?

Well, according to the National Association of Realtors, here's what buyers use as their resource for a home search ...

Internet: 87%
Real estate agent: 85%
Yard sign: 62%
Open house: 48%
Newspaper ad: 47%
Home book or magazine: 30%

Now you know why real estate listing agents make such a big deal out of internet sites.

Happy Home Selling!

-30-

January Sales Report Is In. Let's Blame Everything On El Nino.

2010-02-10T12:11:00.000-08:00

I think the cold, blustery, rainy weather kept January from being a better month for real estate sales. That's my story and I'm sticking to it.

The single family home absorption rate (AR) took a big hit in January as sales plummeted. The AR for January 2010 dropped to 6.8 percent compared to December's 9.9 percent figure. That is a pretty significant decrease in inventory turn for a 30-day period. It has to be El Nino.

Same thing for condos ... it's all El Nino's fault. Condo AR dropped from 8.0 percent in December to a miserable 5.7 percent in January. Blame it on the rain.

Still, if we were to compare this January to past Januaries, we're starting the year off much better than before. Here's an example. The single family AR for January 2007 was 4.2 percent; for January 2008 it was 3.8 percent; for January 2009 it was 4.9 percent. At 6.8 percent, we're actually starting the year off pretty good and that could be a sign of good things to come.

Same for condos. From 2007 through 2009, the condo AR was 2.8 percent, 2.9 percent, and 2.8 percent. Heck, last month's 5.7 percent is a huge improvement, wouldn't you say?

Let's take a look at hard numbers ...

Single Family Homes

The number of single family homes listed in the MLS increased in January as compared to December. In December, there were 5,928 single family listings in the MLS. In January, that number had climbed to 6,399. Quite a jump.

Single family homes sales dropped in January compared to December. In December there were 586 homes sold. In January, only 438. Quite a slowdown and that explains the drop in AR.

Median home prices, oddly enough, increased when you compare January 2009 to January 2010. The January 2009 median was at $124,500 while this past month it stood at $130,100. Maybe that increase in price is why fewer houses sold. Hard to say.

Condominiums

Wow, big jump in condo listings in the last month. In December there were 5,180 listed condos in the MLS for Pinellas County. In January, that number swelled to 5,503. Lots of new condo listings.

Condo sales, as the AR indicates, took a plunge. In December, 413 condos were sold and I thought condo sales had turned for the better. I was wrong. In January only 312 condos were sold -- and this is supposed to be the best part of the season for condo sales.

Unlike single family homes, the median price for condos also dropped comparing January 2009 to January 2010. In January 2009, the median price was $125,000. In January of this year it was only $113,000.

So, all in all, I'd say January was not a bad month, just not a very good month. But we are starting off the year in better shape than we have in any of the past three years, and I think that's a very good omen for future real estate sales in 2010. If everybody plans their work and works their plan, we just might get someplace good in the next few months. And let's keep in mind that an El Nino won't last forever.

Happy Selling Everybody!

-30-

Tampa Bay's Housing Outlook For 2010 Is Not So Good

2010-02-05T11:10:00.000-08:00

Talk around the water cooler is that housing sales are increasing.

Talk around the coffee pot is that the housing market has turned and that things are looking up.

Talk in all the martini bars is that now's the time to buy, the market has bottomed out and you better jump in before all the good deals are gone.

Hmmmm. Maybe that's all just talk.

Let's look at a more learned opinion backed by research.

Mark Zandi is the chief economist for Moody's Economy.com and one of the top prognosticators in the real estate field. He's one of the gurus who I pay special attention to because I think he tells it like it is.

Zandi is not nearly so optimistic as the boys around the water cooler. In a CNN Money.com story from December, Zandi feels that home prices nationally are going to drop another 5 to 10 percent in 2010. Some places, like Miami, will see prices retreat another 30 percent in the coming year. Then prices might -- and the emphasis is on the word "might" -- start turning a little sometime in 2011. But no promises.

Zandi bases this prediction on one of the most troubling aspects of the current real estate crisis -- foreclosures.

Right now there are millions of loans that are in foreclosure or headed that way, and many of these loans can not and will not be modified. RealtyTrac data shows that nearly 2-million U.S. homes are in foreclosure or are bank-owned now, and millions more are headed that way. Zandi himself estimates that some 2.4-million more homes will find their way into foreclosure in 2010.

Here's why prices are going to fall. Banks are going to start unloading those homes onto an already over-saturated market during 2010. This will result in a tidal wave of low-priced homes that will drag prices down even lower.

I heard that just recently in Las Vegas a large bank said it will start putting 500 foreclosed homes per month onto the local market. They have 6,000 foreclosed homes to sell in that city alone. And they are just one bank. What do you think that will do to property values there? And if one bank starts doing this, others will surely follow suit since they will not want to be caught holding foreclosed properties with prices falling. So, one problem will probably feed the other in Las Vegas. My fear is that this time, what happens in Las Vegas will NOT stay in Las Vegas. Banks dumping foreclosed properties could become a national trend serving to drive prices lower nationwide.

Here's the next problem. These foreclosed properties are going to be offered for sale to a market that is not buying property. The country is no longer real-estate-greedy.

Why aren't we buying real estate anymore -- like during 2003 or 2004?

Unemployment.

Last October the unemployment rate was at 10.2 percent nationally. It's higher now. In Tampa Bay it's around 12 percent. That kind of soft job market means potential buyers don't have enough steady income to buy new homes, and they lack the confidence that their jobs will remain steady enough to pay for the mortgage on their existing homes. So, they simply don't buy. Period.

Those factors, coupled with the fact that the government's first time home buyer program is going to expire in March, mean we are faced with a very fragile housing market.

Economy.com's housing price outlook for 2010 keeps those factors in mind, plus such things as local income figures, population trends, mortgage interest rates, and foreclosures. The results are broken down for 100 metropolitan areas.

The result? The four weakest areas of the country for housing prices are going to be Florida, California, Nevada, and Arizona. That shouldn't surprise anybody. These areas have the highest rates of foreclosure now and those rates are likely going to increase.

The worst market in the prediction? Miami. Prices there are predicted to fall another 33 percent in 2010.

So, where does good ol' Tampa Bay figure into this picture according to Economy.com?

Well, of the 100 markets surveyed, we rank a disappointing 94th. Prices here are expected to sink another 22.77 percent in 2010.

So, if you've been waiting for the market to improve before trying to sell your property, well, looks like you're going to have to keep it for yet another year.

Oh, and how long will it take for you to start to pull even on the house you bought at the top of the market in 2006? A very long time, my friend. The prediction is that the market will turn sometime in 2011, but will only go up in Tampa Bay by a dismally small 1.26 percent. So, if you lost half your value in the last four years, and the market is going up by 1.26 percent annually, you should be able to get your investment back in ... well ... you do the math.

Best bet? Sell it now at today's prices. Take your lumps. Get on with your life.

-30-

Fannie Mae Offers Closing Cost Help On Foreclosures

2010-02-04T11:08:00.000-08:00

The out of pocket expenses incurred when purchasing foreclosed property just got a little less thanks to a new offering from Fannie Mae, the largest provider of residential home funding in the United States.

Fannie Mae announced on Friday, January 29th, that it would pay closing costs for buyers of foreclosed properties if the property was in Fannie Mae's inventory of foreclosed homes.
The inventory list can be found on a special website set up last year by Fannie Mae -- www.HomePath.com. Buyers of foreclosed homes can obtain up to 3.5 percent in closing cost assistance or an equal amount for the purchase of new appliances.

Fannie Mae has nearly 50,000 foreclosed properties in its current inventory and wants to clear them out, thus the closing cost incentive. The offer is available to any owner-occupant who closes on the property before May 1, 2010.

In addition, select Fannie Mae properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers qualified buyers the ability to purchase with as little as 3 percent down.

Good luck and happy house hunting!

-30-

December Sales: Volume Up

2010-01-10T07:31:00.000-08:00

December was kind of an interesting month from a statistics viewpoint for real estate in Pinellas County. The volume of sales was up, prices were down and -- of all things -- condo sales improved quite a bit.

Let's take a look ...

We'll start as always with a quick glimpse at the Absorption Rate (AR) for single family homes and condos. For those of you who may be new to this report, the AR is actually the inventory turn. It is determined by dividing the number of units sold in the month by the total number of listed properties in the Multiple Listing Service for each category.

Single Family Homes

For single family homes, the AR for December climbed to 9.8% from November's 9.6%. That's not a huge increase but these days we'll take any kind of improvement in sales. The number of listings for December was less than in November. In December, 5,928 homes were listed for sale in the MLS while in November there were 6,096. In December, some 586 single family homes were sold, and in November the number was exactly the same, 586 single family sales. So the AR improvement was the result of having fewer homes listed rather than a jump in the number of homes sold.

The median price for a single family home in Pinellas during December was down to $140,000 as compared to $145,000 for December of 2008. I'll have some comments on real estate pricing later in this article.

Condominiums

Condos actually made some improvements, and that's surprising since they've kind of been the forgotten stepchild of real estate for the past year or two.

During December, the MLS carried 5,180 condos listed for sale. That's down from November's 5,382. But here's why the AR jumped so much for condos. During December, there were 413 condos sold in Pinellas County as compared to November's 305. That's actually quite a nice improvement in volume and should give condo sellers a glimmer of hope. Maybe things will pick up as we move through the winter season.

The median price for condos, however, was not so great. The median fell from December 2008's $140,000 to December 2009's $124,900, a decrease of 10.8%. Not so hot.

Here's something interesting. Since we have finished the year statistically, I took a look at pricing to determine what price ranges are selling best. For condos the best price range was in the area of $200,000 to $249,999. Some 9.2% of all condos sold this past year were in that price range -- better than any other pricing category according to MLS data.

For single family homes, the best price range was from $120,000 to $139,999. During the past year, 10.4% of sales were made in that price range. The second best price range for houses was from $100,000 to $119,999 at 9.6%.

Now, I may not be the smartest guy in town about these things, but this bit of information kinda leads me to believe that those houses that are being bought at relatively modest prices are being bought by a lot of first time home buyers and investors. I'll bet a lot of those moderately priced homes were paid for using cash rather than a mortgage, which I think means investors are making these purchases. I have no data to back this statement up, but I have some experience in the world of real estate that leads me to believe I'm right about this.

The condos being bought in the quarter of a million dollar range lead me to believe that those are being bought as homes rather than investment property -- and not necessarily by retirees. Pinellas County is not the Mecca for retirees that it once was, and I'll bet you that a lot of those condos are being purchased by middle-aged empty nestors who are still working but want the more easy-going lifestyle available in a condo. Again, no data to back any of this up.

I noticed one more thing about pricing when I reviewed the entire year. Median prices were actually pretty flat. Sure, they were down as compared to 2008, but overall for the year the median seemed to hover around $140,000 give or take $5,000 or so on any given month. The same is pretty much true for condos -- pretty flat for the year as a whole.

Now, what does this mean? Well, it could mean that prices are beginning to reach their bottom. Of course, a new influx of short sales and foreclosures during 2010 could drive prices even lower so we have to watch what the bankers will be doing on that score. But if distress properties can remain off the market, we just might be beginning to see the end of these falling prices and perhaps, just perhaps, be seeing some stability returning to the local real estate market. Only time will tell.

Anyway, it's been an interesting year.

Happy Selling!

-30-

Great Photos Needed If You Use Internet Marketing

2009-12-21T05:44:00.000-08:00

The best estimate is that over 80-percent of home buyers today use the Internet to look for a home. That's data from the National Association of Realtors. Since we now live in such a visual age, postings on the Internet must be visually appealing. This means any house posted on a website must, I repeat, must have great photography.

According to RIS-Media, a real estate trade publication, homes with 20 or more photos received almost ten times the number of leads and more than fifteen times the number of showings as homes with only one online photo.

But, how do you create great images?

Well, in one of my past lives I did more than my fair share of photography at various advertising and public relations agencies where I worked. I photographed a couple of model homes along the way, so I thought I'd share a few tips.

First, don't skimp on equipment. Buying a cheap little camera means you are likely going to lack the options necessary to make your photos look good. You just won't be able to do what you have to do. By the same token, don't go overboard and run up a huge bill for equipment. Stay within your budget, but get all that you need to do the job right. I happen to like Nikon equipment, but Canon, Pentax, Sony, and all the other top brands make great equipment too.

Second, get a flash. A real flash unit (not the little one that comes in a point-and-shoot camera) makes colors pop and fills in the shadow areas of a room so it looks bigger. I use a flash on every interior shot and a lot of exterior ones as well.

Third, shoot the front of the house only when the sun is shining on it. If you must take the shot when the sun is not shining on the front of the house, overexpose and/or use the flash. On good cameras, there is an "overexposure compensation" button or dial. Turn it to "+" to lighten the exposure or "-" to darken it a bit. That should help.

Fourth, shadow your lens. Make sure a shadow of some kind falls on your lens. This helps you avoid sun spots or "flare". Use an umbrella or ball cap to block the sun. I almost always take a Tampa Bay Rays cap with me when I shoot. First, I'm a fan. Second, I block the sun with it.

Fifth, buy a tripod. This is perhaps the most useful piece of equipment after your camera and flash unit. The tripod lets you keep the camera straight under all conditions. Keeping the camera straight keeps the rooms from looking crooked. Also, you'll need a tripod to take those picturesque evening and night shots that look so spectacular, especially back by the swimming pool and spa.

Sixth, use a wide angle lens. I like to use a wide angle zoom lens but a fixed focal length lens will work just as well. I suggest lenses of about 24mm to 28mm, but I have used them as wide as 12mm. A wide angle lens is your best bet for including as much of the room as possible.

Seventh, don't list the house until the photos are shot. Photos have to be included with the MLS insertion, or shortly thereafter. I sometimes hold off listing the property until I have the perfect set of photos. If that means waiting for the sky to turn blue or the rain to stop, so be it. It will only be a couple of days and I want the sky to be cobalt blue not gun-metal gray. It's worth the wait.

Eighth, shoot the best parts of each property. Most buyers want to see the exterior front, kitchen, main living area, family room, and master bedroom at a minimum. I don't shoot bathrooms unless there is something really outstanding about that room. Don't forget to shoot the entry foyer, screened lanai, and garage too. Remember, you're creating a visual tour of the property.

Ninth, practice. Nobody is good a taking photos of houses (or anything else) unless they practice with the camera and the necessary techniques to make good photos. So, take photos of your house or condo until you are good at it. Start off by reading the instruction manual that comes with your camera and learn the basics. Then, get more advanced. Eventually you'll find out what works for you and what doesn't. Have fun with it.

If you just don't feel comfortable taking the photos yourself, hire a professional photographer to shoot the property for you. It's really not that expensive, and good photos are absolutely essential to make the right kind of statement on the Internet. And besides, if the photos don't turn out right you can always blame the photographer.

Happy selling!

-30-

Big Changes Being Proposed For FHA Buyers

2009-12-16T04:42:00.000-08:00

If you're an FHA buyer, you might want to give your mortgage representative a quick phone call. Some big changes are in the wind at the Federal Housing Administration (FHA), and you need to keep up-to-date on what these proposals are and how they might impact your ability to purchase a home using an FHA-backed mortgage.

In a nutshell, the FHA wants to make it tougher, a lot tougher, on borrowers. Here's what FHA is considering ...

An increase in the upfront cash paid by borrowers;
Raising the minimum credit scores for borrowers who receive FHA-backed mortgages;
Limiting the amount of money sellers can kick-in for closing costs and "free" upgrades.

The goal here is twofold. First, by increasing the amount of up-front money paid by borrowers, the FHA hopes to improve the agency's current financial picture which has been pretty badly beaten up because of rising defaults. Second, by requiring buyers to invest more money in the initial home purchase, the agency believes that buyers will be much less likely to default on loans or just walk away from properties. The feeling in Washington is that the more skin a buyer has in the game, the less likely he is to just walk away.

This stuff is all in the "proposal" stage now. Nothing is set in stone. At the present time, down payments for FHA mortgages can be as low as 3.5% of the purchase price. Most in Congress and in regulatory capacities think that is too low. One lawmaker has already introduced legislation that would move the minimum down payment to 5%. The "seller concessions" are now maximized at 6%. Current thinking is that those concessions may fall to 3% to be more in-line with conventional lending practices.

In addition, it is quite likely that the the monthly insurance premiums charged to borrowers will be increased as well. The FHA's staff is reviewing this matter and the amount of the increase.

These measures, and others, are all designed to help FHA curb its exposure to risk and improve its weakening cash reserves. My guess is that these FHA changes will come to pass within the next few months. So, if you're going to buy a house with an FHA mortgage, my suggestion is that you get it done soon ... real soon.

-30-

November Sales ... Ugh!

2009-12-11T06:39:00.000-08:00

I actually thought the real estate market in Pinellas County was starting to look brighter in September and October. But in November, somebody dimmed the lights.

Let's take a quick look.

We begin, as usual, with the Absorption Rate (AR). In November, the AR for single family homes fell to 9.6% from October's 11.3%. That's a pretty sizeable drop for one month and it is absolutely moving in the wrong direction. For condos about all you can say is that the slide continued. The condo AR for November fell to 5.7% from October's not-so-darn-good-anyway rate of 6.8%. I'll have more info on condos later in this report, and frankly, it ain't too cheery.

Single Family Homes

During November, the MLS reported 6,096 single family homes listed for sale. That's a decrease from October's 6,373. To be honest, we didn't sell a bunch of homes to create this decline in listings. I think a lot of sellers simply have thrown in the towel and taken their property off the market hoping that things will get better someday soon and they can re-enter the marketplace. They would still like to sell the property, but have lost patience with keeping the place model-home clean, appointments at the dinner hour, open houses on Sunday and all the rest of it. We call these "ghost sellers" and they will be back at some point. When you add in these ghost listings, there are a lot more homes on the market than what is reported in the current MLS.

November saw only 586 sales. We did a lot better in October when 718 single family homes were sold. There may be a lot of reasons for this decline and about all we can do is hope that the market comes back this fall and winter.

I don't know what to say about the median prices. If you look at November 2009 versus November 2008, the median price has dropped another 8.4%, from $159,900 to today's $146,500 for single family homes.

But if you look at median prices since January 2009 to the end of November, prices have risen! In January, the median was $124,500 versus today's $146,500 -- a tidy little increase for 11 months.

What I think we should keep in mind is the definition of a "median price". The median -- and I have explained this before -- is the figure at which half the buyers paid less and half the buyers paid more. It's the halfway point. To my way of thinking, if the median goes up it means that buyers appear to be willing to buy more expensive homes, or at least pay a bit more for a house they want. I don't think it really says too much about the VALUE of a piece of real estate, and I don't think it means real estate prices are rising. It simply means that buyers are buying more expensive houses than they were in past months. So, maybe we've just attracted some more affluent buyers, I don't know. Time will tell.

Condominiums

This is getting bad. Really, really bad.

In November, the MLS reported 5,382 condos on the market in Pinellas County. In October there were 5,619 condo units listed for sale. That's a lot of unsold inventory.

Sales took it on the chin in November. Only 305 condos were sold, and this is supposed to be the start of "the season". In October there were 381 condo sales. So, we sold fewer units.

Here's the thing about condos that will make your head spin -- or at least it made mine zip around. In November the median price for condos in Pinellas County was only $116,000. In November of 2008 it was up at $125,500. That's an annual drop of 7.6% year over year. Now remember, the same definition of median pricing holds here about condos. To my way of thinking it means that buyers are buying even less expensive condos now than they were a year ago!

I went back and found out the median price for condos in January 2009, thinking to make a nice comparison and show that median prices were rising a little like they did for single family homes throughout the year. Nope. Didn't happen. In January 2009, the median price for a condo was $125,000 and now it's dropped to $116,000. So this means buyers are probably willing to pay even less for condos now than they were willing to pay for them earlier this year. To me, this kind of signifies that today's buyers don't see as much value in condos and the condominium lifestyle as they have in the past. Anybody think I might be right with that kind of idea?

To my way of thinking, the condo market as a whole continues to slide. Overbuilding of units and a change in the demographics of Pinellas County probably have a lot to do with it.

So, that's where we stand as of the end of November. Kind of a ho-hum month, but condos got the worst of it ... again.

Happy Selling!

-30-

Today's Homebuyer Characteristics

2009-12-09T11:04:00.000-08:00

So, what do we know about today's home buyer?

Well, quite a bit actually.

And it's all contained in a nifty little 211-page report compiled by the National Association of Realtors. If you want to read the entire report, just go to www.floridarealtors.org/Research/Indeex.cfm.

If, however, you have a life and are satisfied with the report's highlights, here's the important stuff as it relates to Florida buyers during 2009 ...

41% of recent home buyers were first-timers in Florida, as compared to 47% nationwide.
The typical first time buyer in Florida was 31 years of age; the typical repeat buyer was 54. Nationwide, buyers were 30 and 48 respectively.
The 2008 median household income of buyers in Florida was $71,100; nationwide, $73,100.
Single females made up 18% of recent home buyers in Florida.
The typical home purchased was 1,850 square feet and built in 2000.
The median price of a single family home purchase was $176,500.
More than one-third of home buyers started their home search looking at online listings.
75% of buyers used the internet at some point during their home search.
The typical home buyer searched for 12 weeks in Florida.
The typical home buyer financed 93% of the home's purchase price.
Recently sellers typically sold their home for 93% of the listing price, and 65% of sellers reported that they reduced the asking price at least once.
For Sale By Owner sellers made up only 10% of Florida sales.
40% of FSBO sellers knew the buyer prior to the home sale.
15% of FSBO sellers reported that completing the sale within their planned time frame was the hardest part of the selling process.

It's amazing how you can condense a 211 page report to just a few factoids isn't it!

-30-

New Short Sale Rules Should Help Everyone

2009-12-03T10:47:00.000-08:00

On Monday, the U.S. Treasury set new, more streamlined rules for short sales. Real estate agents, home sellers and buyers should all benefit from these new guidelines.

The Home Affordable Foreclosure Alternatives Program (HAFA), which is part of the Home Affordable Modification Program (HAMP), gives important financial incentives while simplifying short sale procedures. The HAFA rules set limits on the time frame for lenders to respond to buyer offers on distress properties, free many borrowers from debt and cap the claims of subordinate lenders. The new guidelines also ensure that real estate agents get paid the agreed upon commission for the work they do regarding short sale transactions.

Here are some of the important highlights of the new guidelines ...

Lenders must now respond to short sale requests within 10 business days of receipt of the offer package.
Sellers are now released from all liability for repayment of the mortgage debt.
Sellers are now entitled to a relocation incentive of $1,500. This amount will be deducted from the gross proceeds of the sale.
Lenders will receive $1,000 to cover various administrative and procedural costs for short sales and for deed-in-lieu transactions.
Properties must be listed with a licensed real estate broker doing business on a regular basis within the community where the property is located.
Lenders can no longer require that the agreed upon real estate commission be reduced as a condition of approving the short sale.

There are other guidelines associated with this matter, but these seemed to be the "biggies" to me.

I think this will make short sales faster and easier for everyone involved. Moreover, with a new batch of adjustable-rate mortgages ready to reset in 2010, an unemployment rate holding in excess of 10-percent, and a generally dark cloud still hanging over the nation's economy, many real estate gurus see a huge new batch of distress properties coming onto the market next year. So, anything that makes selling and closing these troubled properties faster has to be considered as great news for the real estate industry -- and heaven knows we can use a little of that.

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Maybe Humor Would Help

2009-11-28T05:34:00.000-08:00

Got a house you want to sell but not having much luck?

Isn't everybody!

Well, I've been reading some of the classified newspaper advertising for houses that real estate agents and home owners write for their property. To be honest, they all sound pretty much the same. You know, "For Sale: 3 Bedroom/2 Bath Ranch-style home in great neighborhood close to schools, shopping and bus line. Convenient to downtown and beaches. $299,900. Call today."

Yeah, that separates you from everybody else. Gives you some real identity. Makes people want to jump in the car and bring their checkbook out to put down some deposit money.

Well, my old buddy Tom Holter who now lives up north in snow country, sent me an e-mail with some classified ads that ran in the Minneapolis newspaper. These had some really funny selling descriptions. I'll give you a few examples ...

"FREE YORKSHIRE TERRIER. 8-years old. Hateful little bastard bites!"

"COWS: NEVER BRED. Also 1 gay bull for sale."

"NORDIC TRACK. $300. Hardly used. Call Chubby"

"WEDDING DRESS FOR SALE. Worn once by mistake. Call Stephanie."

Tom says all these ads really ran in the newspaper, and I don't doubt it for a moment.

I remember an ad that ran in the St. Pete Times some months ago. As I recall it said: "SMITH & WESSON .38 PISTOL. Never used. Got divorced so there's nothing left to protect. Call Killer." I'll bet that gun sold in a few hours.

So, I was thinking that maybe real estate agents and homeowners need to liven up their ads. Make them more fun. More entertaining. Put a smile on the faces of prospective buyers.

What have you got to loose? If the phone's not ringing now, what can a little humor hurt? It might get you a few calls. If not, go back to the same old way you've always written your ads.

What do you write? I haven't a clue.

It probably depends on the house and what it's features are like. Or, maybe you can find something to say about the seller's motivation in selling. Or, why the price is set where it is. You know, "Moving to upstate New York so we can watch the sun set every winter afternoon at 3:30 PM. In the dark as to why we're leaving Florida." Or, "Must Sell Fast: Next door neighbor's a creep." Or, "Leaving Area. Kids finally grew up and moved away ... but not far enough." Even, "Joining nudist colony. Need house with smaller closets."

Don't worry, you'll think of something that will separate you from the ordinary run-of-the-mill advertising.

Hey, it's just an idea!

Happy Selling!

-30-

Improve Your Short Sale Success Ratio

2009-11-27T05:27:00.000-08:00

In Pinellas County last month, the MLS reported that there were 12,035 properties listed for sale. Of those, 2,624 were classified as "Distressed Properties" -- that is, they are in pre-foreclosure, a short sale, bank owned, or are a foreclosed property.

Of those distressed properties, 346 managed to get sold in October.

Perhaps you were not among the lucky buyers who managed to have your offer accepted on a distressed property. Too bad. Those distressed properties generally are bargain priced right from the start.

What I'm hearing from many real estate agents is that inexperienced buyers seem to think they can get distressed properties at prices substantially lower than the asking price. So, they write up an offer for considerably less than the asking price thinking "seller desperation" will help them buy the property for an even lower price.

Many times those offers are simply not accepted because the "third party" (usually a mortgage company or bank) simply refuses to sell the property for that much of a loss or because somebody else made a higher offer that was more appealing to the bankers.

So, if buyers want to upgrade their chances of having an offer accepted on distressed property, pay careful attention to the following factoids:

In October, 2009, pre-foreclosure and short sale properties in Pinellas County sold for an average of 94% of their asking price.
In October, 2009, bank owned properties that were in foreclosure sold for an average of 98% of their asking price.

This info comes from the Pinellas Realtor Organization who keeps track of these kind of statistics.

So, now we know where the offer has to be if you want to be successful in buying short sales and other kinds of distressed properties. Those percentages put a little different slant on the ol' offering strategy, right?

Buyers and their agents need to realize that the discount is already in the asking price of a distressed property. Your best bet is probably to cozy-up to that asking price and make an offer that's within the success percentages described above. Most likely that $125,000 offer a buyer was planning to make on that $200,000 short sale isn't going to make the cut when the mortgage bankers sit around and decide whose offer they are going to accept -- at least, that's what the percentages seem to indicate.

Oh, here's another little tip I've heard recently about buying distress property: Make it an all-cash offer. Cash gives the mortgage bankers a warm, fuzzy feeling even if the offer is a little less than the guy who has to find a mortgage to complete the sale. The buyer with good credit can put a mortgage on it sometime after the sale is closed.

Hey, it's just a little strategy lesson.

-30-

"Home Sales Bounce Back", Or Do They?

2009-11-24T03:28:00.000-08:00

The main headline in the St. Petersburg Times for November 24, 2009 was "Home Sales Bounce Back", and the paper reported that the volume of home sales in Pinellas County jumped 37 percent for the twelve months ended October 31, 2009. The article was professionally written by good ol' James Thorner who did his usual excellent job.

News of a big sales increase is enough to make real estate agents and home sellers positively giddy. C'mon everybody, uncork that vintage bottle of wine you've been saving for some good news, book that passage on a cruise ship to South America, and finally set an appointment for that lipo weight reduction procedure you've been putting off because, yes, the newspaper has reported that good times have returned to real estate.

Ummmmm ... not so fast.

After you get over all those warm fuzzy feelings, you might want to look into the reasons for this increase, try to determine why the numbers jumped up so favorably, and question if this is something that will continue.

So, let's explore some of what this all means, and then you can make the call based on whether you're an eternal optimist or a dreary pessimist.

Fact: Home sales had their best October in four years. That's good.

Fact: Buyers "scooped up", as the newspaper wrote, distress properties using the $8,000 first-time home buyer tax credit. That's good, but there's a hint of dark clouds on the horizon. I mean, suppose your house is not a distress sale? Did it get "scooped up"?

Fact: Realtor sales totaled 2,758 units in October, the highest 1-month total since 3,735 units were sold in October of 2005. That's good.

Fact: Foreclosure and pre-foreclosure houses made up almost half of all sales in October. That's good, but it's telling us something about the market, who's really buying and what they are looking for.

Fact: The median home price dropped 10% over the year, from $152,300 to $137,500. Overall, prices have dropped 42% from the summer of 2006. That's good if you're a buyer, bad if you're a seller, terrible if you're a mortgage holder on a house bought in '06. Falling prices is clearly why people are buying houses now. No big marketing secret.

Fact: In Tampa Bay, there were a lot of cash buyers. That's sort-of good if you're a seller with lots of equity, but it once again tells us a lot about the market and who's really buying. "Cash buyers" quite often mean "investor buyers" and "investor buyers" generally mean "bargain hunters". Get the picture?

So, let's quickly summarize these facts which were brought up in the newspaper article: Low prices, the $8,000 tax credit, low mortgage interest rates and cash buyers combined with desperate sellers and bargain-hunters to cause a jump in home sales. That's about it, right?

Do those reasons sound like a sustainable market recovery to you? Or do they sound like a very short-term situation?

Before you answer, here are some other facts you need to consider that were brought out in the newspaper story or that we all know:

Fact: The tax credit will expire in mid-year 2010 and, according to most Washington D.C. reports, will not be extended again by Congress. So, kiss that little buying incentive good-bye.

Fact: No matter how you look at the figures, the nation and the Tampa Bay area suffers from very high unemployment -- and many of those people will remain unemployed or underemployed for the foreseeable future since many of their jobs were lost to overseas companies and are not coming back here. Re-employing the country and Tampa Bay may take years. Unemployed people don't buy houses. Underemployed people often move away in search of more gainful employment, thus putting more houses on the market.

Fact: Mortgage interest rates are very likely going to rise beginning in 2010, making it more difficult for buyers to afford homes. Adjustable rate mortgages are likely going to re-set upwards after the first of the year. Hmm, doesn't that sound like one of the things that got us into this mess in the first place?

Fact: Foreclosures will continue into 2010. This means the market will continue to be flooded with distress properties that tend to drive non-distress properties toward lower prices and hamper any kind of home appreciation and price recovery.

To make a long story short, this rise in home sales might be an artificial increase since it is supported by non-market driven factors, government-backed subsidies and fluctuating market and financial conditions.

When those things go away or change, what will happen? Well, nobody knows for sure. There are a lot of factors that have to be analyzed during the next six months or so.

I'll tell you this based on all the facts above: If I were a home seller or real estate agent, I'd delay buying that new 32-foot sailboat until I was able to determine which way the wind was blowing in 2010.

And so it goes ...

-30-

October Sales Report: Kinda Flat

2009-11-20T04:49:00.000-08:00

The sales figures from the Pinellas Realtor Organization for October came in a few days ago. There's nothing in them to get very excited about, so I didn't rush to the computer and write up the month's results. I had a few minutes this morning so I decided to jot them down for everybody.

October, to be frank, was kinda flat.

If you look at the Absorption Rate (AR) for Pinellas County, single family homes for October were down from September by 2/10's of a percentage point. The AR for October stood at 11.3%, but it was only at 11.5% in September, so that's a pretty meaningless difference.

By comparison, the condo AR took it on the chin. The condo AR for September stood at 7.8%, but it took a full percentage point drop in October to 6.8%. That's a pretty significant drop in a thirty day period and I think it shows some real and continuing weakness in the condominium market.

Single Family Homes

The number of single family homes listed in the MLS for October was 6,373. Showing how flat the market is, the number of listings for September was 6,382. It seems to me like this inventory is staying at about the same number month-in and month-out. The industry sells a few houses and a few more come onto the market, but we're not really putting a big dent in that inventory figure as a result of sales activity. We're probably just replacing the normal inventory turn with some new properties.

Fewer single family homes sold in October than in September, but not by much. In October, 718 houses were sold; in September, sales were 735. That's not a significant difference in raw numbers and it's probably why the inventory is remaining about the same.

Even the median price for single family homes stayed about the same year-over-year. The median price for October, 2009 was $146,300; the median for October, 2008 was $150,000. That's a drop in the median of only 2.5% and it means that buyers are making purchases in about the same price ranges and in about the same percentages within those price ranges. (Remember, median price is not the average price -- those are two different measurements.)

Condo Sales

I guess condos are going nowhere. Well, maybe the condo market is getting a bit weaker if anything.

Consider this data: For October, there were 5,619 condos listed for sale in the MLS in Pinellas County. In September, there were 5,620. A net loss of 1 unit. Yeah, that's putting a dent in the inventory!

Condo sales for October were 381 units sold. In September, there were 436 units sold. September was not a great month for condo sales, but October seems to be significantly worse, and that's why the AR dropped a full percentage point.

Condo prices are going the same way as condo sales: downward. In October of 2008 the median price for a condo in Pinellas County was $137,000. In October of 2009, the median dropped all the way down to $113,000. That's a year-over-year drop in median price of 17.5% for the condo market in Pinellas County.

So, what does all this mean?

Well, it could very well mean that the drop in prices for single family homes is slowing and you can probably say that it is now pretty flat from a value standpoint. I don't like to use the term "bottomed-out" because how long the single family market will remain flat is anyone's guess. There are a lot of market factors that could influence single family home values -- employment (which influences demand), foreclosures and short sales, mortgage rates and the availability of mortgage funds, the general economy and lots of other factors. We could see another downward spiral of pricing in 2010, and some guru's have even made predictions like that recently. For right now, however, I think single family home prices seem to be holding steady.

For Pinellas condos, I think the outlook is pretty grim. Values continue to fall and most real estate agents I know report a general lack of demand for condos except for some newer luxury communities in locations along the Gulf beaches and the downtown section of St. Petersburg. Moderately priced condos that were once so popular among retirees seem to be suffering due to a combination of factors including competition from other cities for retirement, high maintenance fees, age of the communities (many built in the 1960's), restrictive by-laws and other factors that tend to steer potential buyers out of condos and back into single family homes or other kinds of living arrangements.

We also have to recognize that St. Petersburg and Pinellas County is no longer the retirement center it once was, having lost much of that market to south Florida (Miami/Dade County) and new communities like Trinity and other places in the north-central part of Florida. And frankly, a lot of baby-boomers are choosing not to retire to Florida in favor of Arizona, New Mexico, or southern California. Other boomers are being forced to retire up north simply because they can't afford to retire to a new locale. Loss of pension plans and restrictions on other kinds of retirement income may not permit relocation to a sunbelt area for those "golden years". So, condo demand is suffering in Pinellas.

So, here's the short story. It's still a strong buyer's market and these buyers are value-oriented. If the property (condo or single family home) is not value-priced, it probably won't sell. Seller's need to analyze their motives in selling. If they really want to sell the property, the price needs to be at low market levels. Sellers who are waiting for the market to "turn" or for someone to offer "their number" may really be waiting for that proverbial snow storm in hell.

Good luck and happy selling!

-30-

Zillow Report: Home Values Continue To Drop Locally

2009-11-11T03:59:00.000-08:00

I've been talking to quite a few home sellers and "would-be" home sellers and "used-to-be" home sellers lately who are convinced that home prices in the Tampa Bay area are going up.

They believe that homes are actually increasing in value or are about to turn and make a big upward run like they did in 2004 - 2006. Yes, according to these people, good times are just around the corner.

I don't know where these folks are getting their information. All the figures I see show that home prices are flat if not retreating. Median prices are falling, just check the MLS research. Locally, we have unemployment of 10 to 11 percent depending on which month's figures you want to believe, and unemployed people don't buy real estate. We have low consumer confidence according to the reports coming out of the University of Florida. It's really hard to get a mortgage these days, even for people with good credit scores! We have way too much inventory to sell in the MLS system. And we have all these distress properties -- short sales, foreclosures, bank owned properties -- that drive prices down because they are being sold at fire sale prices. We even have the St. Pete Times running stories about how home prices are falling and if you want to sell your property you have to price it like it's yesterday's newspaper.

But for some reason I've been running into people who think prices are headed upward. Perhaps they are confusing real estate prices with the Dow Jones Industrial Average which is doing a lot better (for now at least).

Anyway, here's the latest bit of info on home prices in Tampa Bay: According to Zillow, home prices in the Tampa Bay area fell another 2.2 percent between June 30 and September 30 of this year.

So, if you are trying to sell a house that was legitimately priced at $300,000 in September, today it's most likely worth $293,400 according to the Zillow pricing averages. In effect, Zillow says you sustained a loss of $6,600 during the last 90 days. With each passing month that your house remains unsold, you are going to lose money in today's market. If you are a seller with an overpriced listing, time is not on your side. With each passing month the market moves farther and farther away from you and your overpriced listing becomes less and less attractive to buyers.

Now, Zillow is quick to point out that some areas did better than others. Cheval, Lutz, Odessa and Keystone in semi rural northern Hillsborough County; Indian Rocks and Feather Sound in Pinellas County; and Port Richey in Pasco County were among a few areas that saw prices go up a little.

The places with the biggest losses were Brooksville, Spring Hill, Dade City and Ruskin. Well, those areas saw huge price jumps during the boom period of 2004-2006 as I recall, so I guess turnabout is fair play.

To make a long story short, Zillow said that only 11 of Tampa Bay's 110 neighborhoods in their survey saw property value increases. The rest, I surmise, either saw property values drop or stay flat for the three months of the survey.

Here's the point of all this. If you are a seller who seriously wants to dispose of a property, you absolutely have to get out of your dream world and start pricing property the way the market is today. If you live in one of the 11 areas where Zillow says prices went up a little, well, lucky for you. But for the rest of us, keep in mind that your house probably lost value in the last three months.

If you haven't already done so, it's now time to adjust your price downward. If you've already made a price adjustment, maybe it's time to do it again. That's just the way the markets are running right now and there is no end in sight -- despite what some people are saying. Of course, these people also believe that Frank, Dino and Sammy are performing live in Las Vegas this weekend.

Happy Selling!

-30-

Federal Housing Tax Credit: New Rules, New Opportunities

2009-11-10T10:43:00.000-08:00

President Obama has signed the extended Federal Housing Tax Credit into law. That's good news for buyers and sellers of residential real estate. Now, first time buyers get an extension on the $8,000 tax credit, and repeat buyers can get a $6,500 credit as well.

In order to take full advantage of the program, you have to follow the rules. John Fenech of Sunbelt Lending has prepared a checklist that buyers can follow to see if they qualify for the new credits. With John's permission, I'm passing these rules along to you.

$8,000 First Time Home Buyer Tax Credit

This credit is for first time home buyers only. The IRS has defined first time buyers as someone who has not owned a principal residence during the three year period prior to the purchase of a home.
The tax credit DOES NOT have to be repaid!
The tax credit is equal to 10% of the home's purchase price up to a maximum of $8,000.
The tax credit applies only to homes priced at $800,000 or less.
The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify for the credit.
For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Now, here's the big news for many current homeowners ...

$6,500 Move-Up/Repeat Home Buyer Tax Credit

To claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
The tax credit DOES NOT have to be repaid.
The tax credit is equal to 10% of the home's purchase price up to a maximum of $6,500.
The tax credit applies only to homes priced at $800,000 or less.
The tax credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

There it is. Please keep the dates in mind. From what I hear, Congress does not intend to extend this program again, so if you want to take advantage of this opportunity you need to act now. It really is a great time to buy!

-30-

Are Short Sales All They're Hyped Up To Be?

2009-11-05T08:56:00.000-08:00

For the last year or two, the big news in real estate has been "short sales". Real estate agents are told by various gurus that they need to learn the ins-n-outs of short sales if they are going to make any money in today's market. Agents are exposed to advertisements, e-mails, seminars, booklets and news articles all about the best way to make money on short sales.

I've been wondering who really benefits from all this short sale hype. I'm wondering if it is the real estate agent or the people who provide the short sale seminars, write the booklets, send out the e-mails, and generally hype short sales. After all, there are charges for all these seminars, booklets, classes and the like. Seems to me like short sale education is strictly a for-profit enterprise.

So, I've done a little research to see who really benefits from all this short sale hype. Not a lot of research, mind you, but a little.

Here's what I found out.

In October in southern Pinellas County, there were a total of 190 condo and single family sales that were distress sales, and 446 that were non-distress sales.

So far in November, and this is the 5th as I write this story, there have been 4 distress sales and 24 non-distress sales.

So, it appears that we are looking at about 1 sale in 5 (about 20%) that is a distress sale. It also indicates that we are looking at about 80% of the sales that are non-distress. My math could be a bit off here, but I think you get the picture.

Now, I think a professional real estate agent should know how to handle a short sale. But with about 80% of the business being non-short sale in nature, why would an agent want to specialize in distressed property sale? Seems to me like your chances are much better at selling a non-distressed property, doesn't it to you?

So, where should you put your time, effort and money? Seems pretty obvious to me.

-30-

The Big Risk Of Overpricing

2009-11-02T04:52:00.000-08:00

Real estate agents and buyers see this everday: Sellers who have their property overpriced and won't reduce the it. They want their "number" and are willing to wait to get it.

The risk such sellers are taking is that they will find a buyer willing to pay their inflated price.

Risk? What risk? You found a buyer for the property, right? What's the risk?

Here's the risk: The risk is that the buyer will need a mortgage. Along with that mortgage comes an appraisal of the property by a certified appraiser who represents the mortgage company. Remember, Mr. Seller, the appraiser represents the financial interests of the bank.

Banks won't lend money for more than a property is worth -- especially with today's banking rules. So, those appraisers have become very conservative in placing a value on property that will have a mortgage.

The mortgage company may not share the buyer's excitement about paying too much for your property. Who determines that the price is too much? Why, that friendly appraiser who just walked around your house taking digital pictures, that's who.

If the appraiser goes back to the mortgage company and files his report showing your house is not worth the price, well, the mortgage company simply does not issue the mortgage to the buyer. No mortgage, no closing. No closing, no sale. Simple as that.

So, even if you find a buyer for an overpriced property, most likely the sale won't go through. And you, Mr. Seller, get to start all over again looking for another buyer willing to pay your inflated price. I'd call that risky business, wouldn't you?

There are a lot of risks in overpricing a property. The appraisal is just one of them. Want to avoid this kind of problem? Simply price your property at true market value from the very beginning.

The fact is that every house will sell at market value. And not a dime more.

-30-

Are We Forgetting The Value Of Curb Appeal?

2009-11-01T03:53:00.000-08:00

This is just an observation, but what's happened to the concept of curb appeal when selling property these days?

I realize that times are tough, sellers are sometimes in less than ideal financial positions, and many properties are facing some kind of distress sale (foreclosure or short sale). So, taking care of the exterior of a property may not be high on a seller's agenda -- especially if the property is bank owned or if the seller is out of town and has to pay someone to look after the exterior of the property.

But let's go back to basic selling principles for a moment. A piece of real estate has to make a good first impression on a potential buyer. If it doesn't, the buyer may lose interest before they even walk through the front door.

Sellers today need to take extra effort to be sure their curb appeal is absolutely top notch-- especially if the house is vacant, bank owned or in foreclosure. This includes lawn mowing and edging, hedge and tree trimming, mulch in the flower beds, and watering as needed. If the front door needs replacing, replace it! If the mailbox is broken, get a new one. If you need new lighting fixtures on the front porch and along the walkways, install them. If you need to paint something, paint it. Your property will likely sell faster and for a higher price if it looks to be in good condition. Curb appeal is what gives buyers that "looked after" impression about your property.

No matter what the circumstances of the sale, a house only gets one chance to make a good first impression. Sellers need to make sure that impression is positive.

-30-

The Goldilocks Syndrome

2009-10-31T07:30:00.000-07:00

According to an article which appeared in the October 31st issue of the St. Petersburg Times, sellers who set an asking price that is too high suffer from the "Goldilocks Syndrome" -- that is, they want more gold than the market is willing to deliver for their property.

The article points out that there are a number of factors which sellers need to keep in mind when setting the price ...

The Economy. Sellers have to keep in mind what the market will bear. Those prices from 2005 and 2006 have gone the way of the dinosaur, so don't ask what you won't get.
Comparable Sales. Buyers, appraisers and real estate agents look at price per square foot. That value is determined by the selling price of similar homes in your area. That selling price is the market telling sellers what it is willing to pay for a house in a particular neighborhood. Smart sellers listen attentively and act accordingly.
Amenities. Upgrades can increase your value, but not on a dollar-in-dollar-out basis.
Location. Yes, location matters. It's not just your neighborhood, it's where you are in your neighborhood. Busy streets -- even in a great community -- are less desirable.
Seasonal Influences. Pay attention to the school schedule if you're selling a family home. Families tend to buy in the summer so they can be moved when school starts. Second home buyers tend to buy in the winter when the snow is flying in the north. Time your sale accordingly.
Appraisal. Mortgage lenders won't approve a sale for more than the appraiser feels the house is worth. So, even if you get your "dream price", you may not be able to close the sale unless you have a cash buyer.

If you follow these six steps you should be able to avoid the Goldilocks Syndrome, price your house correctly for the marketplace, and sell it at the highest price in the shortest time.

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Home Prices Soar, Er, Go Up A Little

2009-10-29T06:16:00.000-07:00

I don't know if you happened to catch the news that home prices rose in August for the third consecutive month according to the well-respected Standard & Poor's/Case-Shiller report. After three years of decline, prices this summer advanced at an annualized rate of nearly 7 percent nationally.

News was not quite so bright in the Tampa Bay area. Here, the price index increased a much more modest 0.4 percent. Experts blame rising unemployment, faltering consumer confidence locally, and the overall lack of speed of the economic recovery as reasons for the slow growth in the Tampa Bay region. I think you can also point to our traditional bugaboos of property taxes, homeowners insurance premiums and lower incomes as also contributing to the slow growth in real estate prices.

Robert Shiller, one of the creators of the report and a noted economist, said that he expects prices to rise for the next few months but can't forecast beyond that. Shiller said that this does not seem to be a time for home prices to be booming, so the future holds a lot of uncertainty. Despite some signs of economic recovery, economists feel that home prices could dip again due to unemployment and an expected rise in foreclosures combined with the end of the tax credit for first time home buyers. Overall, however, prices rose in 15 of the 20 major metro areas surveyed by the Case/Shiller.

I guess the question is whether this is the beginning of the end of all this, or just some kind of anomaly in the data. Only time will tell.

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How Buyers Determine Their Offer Amount

2009-10-23T07:35:00.001-07:00

Ever wonder how buyers come up with the amount of money they are willing to pay for a particular property? Sometimes it's a pretty good offer compared to the asking price, but often it's an offer that is so low that the seller is insulted and won't even prepare a counter-offer.

How do buyer's come up with some of these figures, you ask?

Well, there are two things to keep in mind. First is the asking price. Sometimes the seller is simply asking too much money, and the listing agent who lets the seller ask that high amount has done nothing more than create an unrealistic expectation of what the seller can expect for his property. So, when a lower than expected offer comes along, the seller is instantly insulted and won't consider the offer further.

Where did this low figure originate?

Often the low offer is the result of the buyer's personal computer skills.

Buyer's today are highly computer literate and many choose to do their own real estate research and shopping rather than rely on a real estate agent. They'll hire an agent to help them after they have researched the neighborhood, inspected the proposed house on-line, and visited with a mortgage company to make sure they qualify. Then, the buyer will hire an agent merely to help draw up and submit the offer, conduct the negotiations (if any), and complete the closing tasks.

So, where does the offering price come from?

Well, buyer's agents are telling me that this is how many buyer's develop their opening offer.

The buyer goes to the Yahoo! home page. There, he selects "View Yahoo! Sites". He next selects "Real Estate" and then chooses the option for "Home Values". After that, it is simply a matter of typing in the property's address and location and pushing the "Search" button.

In the blink of a cyber-eye the buyer is given several estimates of market value for the property. These come from Zillow, EAppraisal, and often from CyberHomes, dot com on all of these sites of course. In addition, the buyer also gets the local tax assessment for the property and many times can find out what the current seller paid for the property, what his outstanding mortgage is, and when he purchased the property.

Armed with this kind of data, the buyer probably feels he has a better idea about the true market value of a property than does the seller. This pricing data becomes the top dollar for the buyer's offer on the property.

Now, if the seller is still thinking that he wants way more money, well, that's when the insult takes place and the discussion may come to an end.

In most markets around the United States today, and especially so in the Tampa Bay area, we are in a buyer's market. Within this buyer's market, prices are being set by buyers, not sellers. Sellers need to price their property within the guidelines that buyer's will find acceptable. All sellers and agent's have to do to be within the guideline is follow the computer-based pricing steps outlined above. If you don't like the numbers, fine, do an in-depth CMA and try to justify a higher price for the property. That is always a seller's option, and there may be many legitimate reasons for a property to be priced higher than what comes up on the buyer's computer. But when an offer comes in that is way lower than the seller expected, don't be too upset. It probably came from an on-line pricing source and it is likely going to be the best price you are going to see from that buyer.

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Tampa Bay Real Estate Prices Still Too Pricey According To Economists

2009-10-22T04:19:00.000-07:00

My friend and fellow real estate agent Dave Heideman has been a keen observer of Tampa Bay employment levels for quite some time now and has made many suggestions that have found their way into the stories in this blog site. Dave has sent me numerous e-mails in which he points out that real estate prices in Tampa Bay remain too high because of the area's high level of unemployment, low level of average income, low rental rates and questionable mortgage and banking practices.

Dave is quick to point out that people who don't have jobs, or are in fear of losing the job they have, don't (or can't) take out a mortgage and buy real estate. It's just not the prudent thing to do. Dave is also quick to point out that people whose incomes are low simply can not afford to buy real estate at the inflated prices being asked by many sellers who mistakenly purchased their now-for-sale property at the top of the market in 2005 or 2006.

This all makes sense if you think about it, and some deep-thinking economists have recently reinforced Dave's point of view.

Mark Vitner, an economist with Wells Fargo bank, was quoted in the St. Petersburg Times as saying that a "jobless recovery" may start in 2010, but that jobless recovery will keep home sales tame because employers won't rush out and start hiring lots of new employees next year. So, same old story -- no new job, no new house.

Vitner predicted an additional overall 4.5% decline in home prices next year around Tampa Bay, but stressed that neighborhood price declines could be significantly more due to the local nature of property values within specific neighborhoods. In some neighborhoods, prices might decline 20%, in others 60% -- it depends on the neighborhood.

Another economist, Mark Zandi of Moody's Economy.com, points out that Tampa Bay home prices are overvalued and probably won't bottom until mid-2010. He says that continued high unemployment, competition from low priced distressed properties and foreclosures, and rising mortgage rates will further depress prices as we head into next year. Zandi said flat-out that Tampa Bay area homes, when measured against local income and rental rates, are priced too high. Period. No ifs, ands, or buts about it.

Sellers of real estate and their agents need to keep these factors in mind. In order to sell any product including real estate, you have to offer it to people with the income and credit necessary to complete the purchase. Given the current recession, job losses, and generally low incomes found in Tampa Bay, sellers need to price property at a point where the "average Joe" can afford to make the purchase. Pricing houses like this is California or New York City is just a waste of time because most people here don't have that kind of income.

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September In Pinellas: Pretty Good Month!

2009-10-13T08:07:00.000-07:00

September appears to have been a pretty good month for real estate sales in Pinellas County according to the latest info from the Pinellas Realtor Organization.

Let's start with a quick look at the Absorption Rate (AR) which is determined by dividing the number of units sold in the month by the total number of units listed.

For single family homes, the AR moved up to 11.2% from August's 10.3% -- a pretty good jump in inventory turn. Condo's may have fared even better! The AR for condos for September moved up to 7.4% from August's 5.7% figure. That's the direction we want to see.

Single Family Homes

During September there were a total of 6,358 single family homes listed for sale in the Pinellas MLS system. That's a decrease from August's 6,446. If you are a seller, this is good news. It means there is less competition from other sellers, and it also means that buyers have fewer homes from which to select so your house may have a little better chance of being sold.

Sales for September also took a nice jump upward. Total sales totaled 715 units in Pinellas, as compared to last month's sales total of 665 single family homes sold.

Prices, however, continue to fall. The median price for September dropped to $138,500 as compared to $165,000 from September of 2008. That's a 16.1% decline in median price during the twelve months ended September 30, 2009. Sellers need to keep this on-going price decline in mind when pricing homes for the market and negotiating with potential buyers.

Condominium Sales

There has been some recent activity in new condos in downtown St. Petersburg, so the condo numbers may look better than they really are.

During September, there were 5,691 condos listed in the MLS system as compared to 5,796 last month. But, there were 419 condos sold in September as compared to only 333 in August. I think that jump in sales may reflect recent activity in some of the new downtown condos. We'll have to keep an eye on condo sales during the coming few months to get a reading on that market.

The condo median price fell like a rock in the past year. Between September 2008 and September 2009 the median dropped from $150,000 to $129,000.

I ran across this little bit of info and thought I'd pass it along: So far in 2009 in Pinellas County, 45% of real estate sales have been to cash buyers, 33% to a conventional mortgage, 19% to FHA/VA buyers and 1% to seller financing. That cash-buyer figure is interesting, isn't it?

Good luck to all!

August Sales Figures: The Dog Days Have Arrived

2009-09-12T04:47:00.000-07:00

If you're a regular reader of this blog, you know that real estate sales figures have been looking pretty encouraging since last winter. Well, we have hit a bump-in-the-road in August. I guess it had to happen sooner or later.

Let's start by our usual look at the August Absorption Rate (AR) which is determined by dividing the number of units sold during the month by the total number of listings in the MLS system for Pinellas County.

For single family homes, the AR for August stood at 10.3 percent. The July AR was at 11.1. For condos, the AR for August was at 5.9 percent compared to July's 6.9 percent. What does this mean? Well, if you're selling a single family home the average time on market will be 9.7 months. If you're selling a condo the average time on market will be about 16.5 months. If you think back to time-on-market figures during 2005 and 2006 you will recall inventory turns that were much, much longer; so, this really is an improvement.

Single Family Homes

During August, there were 6,446 single family homes listed for sale in the Pinellas MLS system. In July, there were 6,525 homes listed. In preparing this report, I noticed that the number of homes listed for sale in Pinellas MLS has been dropping quite steadily for about two years. If you're a seller, this is a good thing since the smaller the inventory the less competition to worry about. If you're a buyer, the smaller the inventory the fewer choices you have in selecting a new home.

The number of single family homes sold in Pinellas during August was 665. This is quite a drop from July's 722 homes sold. The median price of these sold homes dropped 19.3 percent compared to sold prices from August 2008. The median price for August 2009 was $142,000 compared to August '08's $175,900 median.

Condominium Sales

Condos continue to struggle. The number of condos listed for sale in the Pinellas MLS in August was 5,796. In July, there were 5,954 listed units. Similar to single family home listings, I noted a steady two year drop in condo inventory month after month.

There were 333 condos sold in August as compared to 412 sold in July. The median condo price fell from $150,000 in August of 2008 to $138,900 in August of 2009. That's a drop of 7.9 percent and frankly, that's kind of an improvement.

I think what we are seeing is a seasonal kind of thing. It's been hot. Winter visitors/buyers are still up north. The economy is questionable. People are worried about jobs, health insurance, property insurance, taxes, taxes and more taxes. So, things have slowed down a little.

Hey, I think it's just a summer kind of thing. Pray for snow.

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