This month I want to go over some conflicting signs about our local real estate market to try to help you make sense out of them as well as some new ways for you to find out about what is going on here locally more often than just once a month when I send out this newsletter. First, to understand what's going on in the market here let's look at last month's statistics.

Sales in March

Last March had sales here that were the highest since back in 2006 and I doubted that this March would be able to beat that number.  In fact, most months of last year were higher than the same month in all of the previous 3 years so it was questionable whether we'd be able to keep the same pace.  However, not only did January and February (barely) top the same months in 2011, but March did also.

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Feb 2012.

Inventory Still Falling

And as a result of that, the inventory has dropped to its lowest level yet in the last 5+ years.

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Feb 2012.

Up to this point there wasn't much sign that this was affecting prices, but that has now changed. From January 2007 thru December 2011 there have only been 2 times that the median price for a single family home was higher than in the same month in the previous year and that was in January 2010 and October 2010.  So far this year, we have had 3 consecutive months where the median price for a single family home was higher than in the same month last year and the average increase was about 20%. For condos there have also only been 2 months since January 2007 that showed a median price increase over the same month in the previous year and that was in May of 2008 and April of 2010.  This year we saw a higher median price in both January and February over last year by about 8-10% but a drop in price in March. With the sales still increasing each year (which shows a continuing strong demand) and inventory continuing to fall to very low levels, it was only time before this was reflected in prices.  It seems that the single family home market is stronger at this point than the condo market and that is in part due to the fact that the inventory of single family homes has dropped about 70% in the last 5 years while the inventory of condos has only dropped a little over 50%.

For Buyers

For Sellers

New Places to Keep Up to Date on the Local Market

This month I'll be going more into what is happening with foreclosures coming on the market and what that means for buyers and sellers, last month's sales statistics and the various tools available for you to make it easier to find what you want.

I wrote in last month's newsletter about how the inventory had been dropping and that I felt it was, in part, due to a reduction in foreclosures coming on the market due to the robosigning issue in Oct-Nov 2010 and that I'm starting to see more coming on the market now. I also wrote that I felt this might increase the inventory some but would not overall cause an adverse affect on sales since there was still such a high demand for these properties. Since then I took a look at the number of new foreclosures being listed on a monthly basis to see the trend as well as to compare to the volume prior to Oct-Nov 2010, and here's what I found.

In August 2010 the number of foreclosed properties that were newly listed in Pinellas County were 410. Looking back to last July, the number each month thru November was below 200 a month so it was less than half of what it was. However, since a low in September the monthly number has been steadily increasing again with the biggest increase in February when it went up from 213 to 254. However, even with that increase, the inventory of residential properties for sale in the local MLS still decreased by over 300 from January to yet another low for the last 4-5 years. At the pace that sales are going, even if the number of new foreclosure listings goes up to 500 per month we should either see the inventory stay level or only slightly increase. Here's the graph showing the new foreclosure listings from last July thru February:

 
The statistical information used to prepare this chart was taken from MFRMLS listing information from July 2011 thru February 2012.

One reason this isn't having as much of an effect is due to the strength of sales. There has been a good trend since December 2008 and last year saw an even more noticeable increase in sales to the point where most months were higher than the same month in all of the last 4 years. I didn't know if we would be in that same range this year but January was just slightly higher than last year and February did show a slight increase from last year too.

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Feb 2012.

Tools to Help You

When you're looking to buy a house, condo or townhouse here, there are many tools I have available for you to use in order to make it easier for you and I'd like to go over them with you here so that you can make the most use out of them.

On both Clearwater Homes Clearwater Condos (this site) and the Clearwater Beach Condos for Sale site there is one of the most advanced MLS search tools available today which you can use to do as broad or as narrow a search as you want and see large photos and extensive information on any house, condo or townhouse for sale in the Tampa Bay area.  Once you've registered you'll not only be able to see all the typical information you'd see in a listing but you'll also be able to see any price changes that have occurred on a specific property; the "Walk Score" for a property and whether there is shopping, restaurants, etc. within walking distance; similar properties for sale; recent sales; street view photos in some cases (like what you would see if you were standing in front of the property and looked all around you); and lots of other information that you'll find useful.

You also will have the option to save one or more searches once you get the criteria set the way you want them and get emailed regularly if there are any new listings that meet your criteria.

On this site there are some searches already set up for you like one that shows all Foreclosure Listings in the best areas of Pinellas County and the weekly, handpicked Exceptional Deals I find.   There are also pages that provide information on most of the cities in this area and the houses and condos in those areas.

On the Clearwater Beach Condos for Sale site I have a list of all the Clearwater Beach condo and townhouse complexes in the 3 areas of Clearwater Beach and links to pages for a good number of those complexes where I go over what that complex has to offer plus the listings for every current or townhouse in that complex which is currently for sale.  In addition, I have also added a special form that you can fill out if you want me to set up a personalized search for you in the MLS so that you can receive regular listings (if you'd prefer to have me do this for you).

Finally, on this site there is also a Resources section where you can get the Buyers Guides I wrote to go through the different steps of the buying process as well as links to get information on Property Taxes, Flood Zones, which schools serve a specfic address in Pinellas County and a School Ratings site.

There's also the Clearwater Beach Condos YouTube video that gives a simple explanation of the 3 different areas that make up the city of Clearwater Beach.

I hope you find these useful and that with the information above you find one or more tool that you either didn't know about before or hadn't tried before that will help you. Spring is coming so enjoy the improving weather wherever you are and I hope to see you here soon.

Sincerely,
Ron

Lots of news this month and mostly it has to do with what the local Dunedin real estate market is really like now (and this includes the surrounding Tampa Bay areas) .  

This month I also have important information for both buyers and sellers.

The current real estate market is quite different than it was just a year ago.  In 2009 and 2010 we saw gradually increasing sales and gradually decreasing inventory.  This was a stable improvement and recovery that continued throughout the years since 2008.

2011 also saw increased sales and decreasing inventory but the change was more significant than in some of the previous years. The number of houses, condos, townhouses and villas sold in Pinellas County as noted in the MLS has increased over 50% from the lowest year in 2008 and in 2011 the increase over 2010 alone was 15% as you can see it the chart below:

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Dec 2011.

This trend is continuing as confirmed now by the January 2012 sales numbers. I didn't expect last month to beat January 2011 since that had been a very strong January (with January typically being the lowest sales month), but as of the date I'm writing this we did see an increase last month over last January. And since there may still be sales for January not yet noted in the MLS the increase may even be a little more than is showing on the chart below:

 
Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Jan 2012.

Now this factor just by itself isn't the reason that I'm saying we have a very different market from last year. The other factor to look at is inventory, or number of properties available for sale. As I mentioned above this has also be slowly but steadily declining since it reached its peak in January 2008 when there was 31.34 months of inventory. A normal level of inventory is considered to be in the 6 months range and in 2011 we had 10 months where the inventory levels were in the 6-8 months range. January is typically the highest inventory level each year and last month that was only 8.61 months. See the chart below to get a better idea of this:

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Dec 2011.

So what this means is that we now have a much lower inventory of properties while at the same time the demand is steadily and stably increasing. To emphasize this, the total number of Active Listings in the Pinellas MLS at the end of last January (for houses, condos, townhouses and villas) was 11,151 and as of the end of January this year there were 7,364.

How This Affects Buyers

Many buyers are still assuming that our local market is doing poorly and that they can get exactly what they want and name their price.  A lot of this is based on what they hear on the news about the economy and the real estate market in general.  However, that doesn't apply to this particular market at this particular time.

What is happening now is that well-priced properties, especially those which are in at least decent condition and in a decent location, are selling more quickly and in some cases with more than one offer.  Buyers are still making sure they aren't paying above market value but they aren't typically getting huge price reductions on properties that are appealing.

 One problem this creates for buyers who aren't aware of the current market conditions is that they have a much more limited selection to choose from than in the past 3 years.  I run into this with a lot of buyers who keep asking 'what else is there' and I have to let them know that we have already seen everything that fits their criteria in the price range they set.

Just to give you an example, I have a client who has been buying very low priced condos that need to be completely redone and his plan is to remodel them and then rent them out, he's planning to hold them for several years as an investment.  Since last winter there have been very few condos that have come on the market that were like the ones he had previously bought and the few that we did get contracts on were short sales that we couldn't close on because the banks wanted more than they were worth.  Recently a condo came on the market in one of the complexes he already owns a few condos in and is a bank-owned property.  This is the first one in over a year, but when I called the listing agent he told me that they already had 7 offers in and that the bank would be choosing the one they wanted within the next several days (and this was less than 1 week after it had been listed).

So the bottom line for buyers right now is that you should know what the current market conditions are and approach your purchase in a way that fits the market.  You can still get properties for good prices but it is not as easy as it has been and you should definitely have someone on your side that knows how to deal with the current conditions. :)

What This Means for Sellers

I only work with a limited number of listings as I am mainly a buyer's agent, but when past clients or people who are on my email list request my help I will assist some with selling their house, condo, townhouse or villa.  

This past year I had 4 listings which gave me a much better insight into how the current market conditions affect those who are trying to sell their property. What I found was that if a seller does not really want to sell their property or has unreasonable expectations on price - their property will not sell.  If a seller does want to sell and has a realistic expectation on price based on the current market - their property will sell, and if marketed correctly it will sell within a relatively short period of time and in the range of the current market value. This does not mean that all properties are selling right away and that it doesn't take work to get a potential sale to close because there is still a lot of work involved.  

Even with the current market conditions, buyers are often more demanding on things they want and when a buyer is getting financing there is no guarantee they will get it - so these have to be followed closely.  But I would have to say that right now is a good time to sell a property if you want to and if you are willing to accept what the current market value for your property is.

One other thing that any potential sellers should know which is quite important - if your property may be in a short sale situation (where the amount it will likely sell for is less than what is owed on loans) then you should probably get it listed within the next 30-60 days.  Currently when you have a short sale and the bank forgives the balance on your loan you do not have to pay taxes on what the bank writes off.  But this is only true through the end of 2012 and it is not certain at all that this will be renewed beyond the end of the year.  What this means is that if you sell your property as a short sale and the bank writes off $50,000 of the loan and it closes after December 31, 2012 - you may end up having to pay tax on that $50,000.  I don't want to get into whether this is right or wrong, I just want to warn you about this because if you wait too long to sell your property and it ends up being a short sale you may end up regretting your hesitation on listing your property.

To close out this section of the newsletter I wanted to let you know that I am wrapping up the last of the listings I had and am now open to taking a few more listings if you would like my help (and they don't have to be short sales either).  If you have some interest in getting help with selling your condo, townhouse, villa or house then you can fill out the Request to List a Property form I put on my new site.

Speaking of the new site, a lot of you visited there last month and got to check out the new MLS tool and I wanted to let you know that I have added pages on several more of the Clearwater Beach condos complexes since then so feel free to go back and look if you want to. Sorry that this got so long this month but I just felt that this information was too important right now for anyone trying to buy or sell any Tampa Bay or Dunedin real estate and hope that you find at least some of it applicable and useful for you.

And if you get a chance, please take a look at the new Clearwater Beach Condos video I've put on YouTube.

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Nov 2011.

If you want to keep up to date on how the year progresses, make sure to read these newsletter each month - if for no other reason than to see the updated chart.

Inventory of residential properties for sale are lower than they have been since 2006 and I think that is partly because there have been a lot less foreclosed properties coming on the market.  From what I can tell, that will change in 2012 but since there is still such a high demand in this market I don't think it will have an adverse effect on sale although I think it will prevent property values from rising much.

But there are definite signs that the next few months will be strong.  One is that statistic on Pending Home Sales which reflect contracts signed for future purchases.  Here's an article from the National Association of Realtors about the November statistics regarding this:  Pending Home Sales Rise Again in November, Highest in a Year-and-a-Half

Clearwater Real Estate - New Clearwater Beach Condos site and Personalized Search

I just put together a new site geared toward beach condo buyers at http://clearwaterbeachcondosforsale.com and one of the features I included was a form that a site visitor can fill in if they want me to set up a personalized search in the MLS for them where they will be emailed any condos that come on the market that match their criteria. It's pretty cool because I took some time and got together a list of all the condo and townhouse complexes in each of the 3 sections of Clearwater Beach and when you use the form it will show the list that applies depending on whether you selected condos or townhouses or both, and for the specific area of Clearwater Beach you choose.  You can check it out at http://clearwaterbeachcondosforsale.com/personalized-search-for-clearwater-beach-condos-and-townhouses-for-sale/. Well that's all I have for this month.  Hope you have a good January and that I get to see you here soon when you get a chance to come down here and enjoy the nice weather and check out some Clearwater Real Estate.

Sincerely,
Ron

Before I start looking back on the year in Tampa Bay and Clearwater real estate in the local market, some secrets for how to approach an upcoming purchase you want to make, and a new free service that helps sell houses faster and for more money...

I want to make sure to wish you a very happy holiday season and a better year in 2012 than you had in 2011.  For some people the holidays are a happy time they spend with family and friends and for others it is a lonely time.  This year, whether celebrating with loved ones or by yourself, find ways to do something you enjoy and that makes you happy no matter how small it is and look at all the positive things in your life - even if it is only a few things.  It is better to focus on the good things in your life than to worry over the bad so take this time to acknowledge those good things.

This has definitely been an interesting year when looking at the Tampa Bay and Clearwater real estate market and though many of the really good deals were bought up this year there are still going to be opportunities over the next several months for those buyers who are prepared to take action.

Statistics for Clearwater real estate and Pinellas County in 2011

Sales in 2011 in Pinellas County were up - in fact every month so far this year except for one saw sales for Clearwater real estate and all other areas in the county that were higher than the same month in the last 4 years.  

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru Nov 2011.

At the same time, the inventory (properties available to purchase) decreased from 11087 as of Jan 1st to 7891 on Dec 1st.    That's an almost 30% drop.

Prices have still gone down, more this year with condos than with houses, but the overall pricing looks like it may be stabilizing.

There have been significantly less foreclosures on the market and coming on the market this year which, I think, has a lot to do with the big drop in inventory and I think that sometime in the next year we will start to see more coming on the market but most likely at a gradual pace rather than all of a sudden.

This spring there was a very big demand for condos, especially beach condos, and the months of March and April saw dramatic increases in sales for both due to the fact that prices were lower than they had been in 7-8 years.

Short sales are taking longer to get through now in many cases and, despite regulations that were supposed to speed them up, lenders are dragging their feet more than I have seen in the previous 2-3 years.  This is not true in all cases but seems to be very common in the very low-end short sales properties.

How to be prepared for your 2012 Tampa Bay area or Clearwater real estate purchase - including a few secrets:

1.  Start your search early.

Spring is the strong buying season and those buyers who act in December and January have a much better chance of finding what they want without having as much competition and at the same time a better chance of getting sellers to negotiate.

2.  Work out what you want to buy.

Get as specific as possible so that you don't wander around too much without making any progress.  View it like you would taking a trip - if you know where you're going on your trip then you can tell if you start to get to far off the route you've set but if you don't have a set destination you may just wander around not really getting anywhere.

3.  Know your price range and have your financing lined up.

This applies both in a general and a specific way.  You should know what the maximum price is that you can and/or are willing to pay for your purchase and have worked out how you are going to pay for it.  If you will be getting financing, this means you should have already contacted your bank or at least one lender to make sure you will qualify for the financing you will need.  When you find a property you are interested in, we will need to look at information I have access to that you wouldn't normally be able to get so we can tell what the property really is worth so as to determine what the maximum price would be that you could pay for that specific property.

4. Act quickly and decisively.

I will help you with this since this can sometimes make the difference between getting what you want and losing it to another buyer. This requires having enough information to make a decision without rushing into one that could be a bad one.

5. Find the best leverage.

I have found that you need to utilize the correct leverage in negotiations, whether there is another competing buyer or not. In many cases the seller's agent will either give hints or say directly certain things that let me know what will make an offer one that is more likely to be accepted, or to do better if there is another competing buyer. I pay close attention to what is said to me and how it is said to find out how to best approach the offer and negotiations. I also make sure that the seller's agent knows that working with me will make the job easier for them and their client and have had this make the difference for my buyers being able to get what they want. Without a buyer's agent representing you, you lose the ability to get certain points of leverage as the seller's agent will not be as direct with a buyer as they will with another agent.

So there are some tips that can help you with your future purchase - please make sure you follow them because you should try to get every advantage you can.

Finally, I wanted to let you know about a new service that helps in selling houses faster and for a better price.

New Service to sell your house faster and for more

If you have a house to sell in this area that is $200,000 or more and is vacant, I can now arrange to get a 'house manager' who will furnish and stage the house with good quality furniture (so it is now empty and thus shows better), will take care of the house and your utilities and lawn care (and even pool maintenance if you have a pool) will be taken care of and paid for you. An occupied property that is staged generally sells faster and for a better price than one which is empty and not being kept up. If you are interested in this, just send me an email.

Well that went longer than I had originally thought it would but there was just too much info that I felt you should have to skimp. Again, I hope you have a wonderful holiday and I look forward to seeing you in the next few months when you come to make your Tampa Bay area or Clearwater real estate purchase.

Sincerely,
Ron

I spent a little extra time this month reviewing the local Clearwater homes real estate statistics because there are some trends starting to show up that caught me by surprise and I wanted to look into them further to make sure I was really happening.

I've been reporting on sales mostly and a little on inventory but when I looked at another statistic this month I was a little surprised by what I saw.

This statistic is called Absorption Rate and is also known as Inventory Turnover.  This number is arrived at by dividing the number of units sold in a specific month by the total number of listings in the MLS.  I was a little more specific about this and narrowed it to only houses, condos, townhouses and villas in Pinellas County which included Clearwater homes and condos as well as those in St. Pete, Dunedin, Palm Harbor, etc. (same criteria I use for the sales chart).

This gives you a picture of how quickly the inventory is turning over.  The lower the Absorption Rate the slower the turnover and the higher the Absorption Rate the faster the turnover.

Back in the summer of 2005 when the market was at its peak and the inventory was at its lowest point, the Absorption Rate was over 50%.  This meant that over 50% of the properties for sale that were listed in the MLS had sold in that month.  In a normal market you'd be looking at a number more in the 12-16% range.

I noticed that since the beginning of the year the inventory was dropping and Absorption Rate was increasing so I decided to do an updated chart showing the Absorption Rate for Pinellas County/Clearwater homes and for condos since the beginning of 2006 to see where we stood.

What I saw on the chart was not what I expected.  The Absorption Rate for condos has now moved into the range you would see in a normal market and for homes it is now 33% higher than at any point since January 2006 and is in a range that is more like a seller's market than a buyer's market.  Here are those 2 charts:

I wrote in one of the most recent newsletters about the inventory dropping to 5 year lows and that this seemed to correspond with a drop in foreclosures coming on the market so I looked into some other statistics to see if this was really what was going on. It took a lot of digging but I think I finally have a better grasp on what is really going on.

The Absorption Rate includes properties in the MLS with the status of Active and excludes any with the status of Active with Contract (under contract but uncertain about closing, like with short sales) or Pending (under contract and looks pretty certain to close). When I looked at the change in Active with Contract and Pending listings over the last year, their increase corresponded with the decrease in Active listings. In other words, if we were to look at the total of all 3 (Active, Active with Contract and Pending) there would be little overall change since this time last year.

On thing I've noticed this last year is that short sales are getting much more difficult to close and are taking longer. Our MLS statistics shows this too - time on the market for short sales increased 40% from last August to this August.

To summarize, the number of properties coming on the market is decreasing gradually with a more noticeable decrease in foreclosed properties since last year, short sales are taking much longer and between these 2 things the number of Active properties is noticeably lower and the number of properties under contract are noticeably higher but many of those are short sales that are staying under contract for a long period of time going nowhere. But the initial picture you get from the statistics is that the market has seen a dramatic change suddenly.

Now the trend is positive overall and is continuing to show gradual and stable improvement like I've been discussing each month. You can see this in the sale chart which does show a continuing trend of improved sales:

So what does this mean for buyers? There is less available for sale and more buyers competing for the available properties. This is making it a little tougher to find properties and sometimes can make it a little more difficult in negotiations but property prices are not yet a problem. Sellers still have to sell at or slightly below market value in most cases. Most Realtors and many sellers realize this and if they really want to sell they are pricing their properties appropriately - and Clearwater homes and condos as well as those in the rest of the county that are priced right are selling quickly and at or near the list price.

There does appear to be a situation of banks holding back foreclosure inventory and, as I wrote previously, some of this is due to the 'robo-signing' situation but I believe some of this is due to the banks waiting to see if the federal government will take inventory off their hands to rent it out or come up with some kind of program that will benefit the banks. If this doesn't happen then the banks will start putting their 'shadow inventory' back on the market. This will increase the overall inventory but since there is such a demand I don't think this will cause more than a pause in the recovery. I guess we'll know more in the next 12-18 months.

So in answer to the question in the title, no - the buyer's market is not over but it has shifted and you need to be aware of how it has changed. Right now, if you want to buy Clearwater homes or condos or any residential property in the Tampa Bay area you can still get good deals but you have to be prepared and need a good Realtor to help you gain any advantage you can get - and you will need to have your financial arrangements all set and should be ready to act quickly when you find a property you really like.

I have a LOT to go over with you this month but it's going to be brief because I've been working day and night lately and am ready to go relax for just a little bit.

You may have already noticed a major change in my Clearwater Homes site.  I redesigned it from the bottom up and used the information from surveys filled out last month to make sure it provided pretty much everything you want.  And yes, I did all the design and layout work myself (but I did get help on the image at the top and suggestions on backgrounds and such - thanks Laura).  After I go over the market update for last month's sales I'll let you know about all the great new advanced MLS search tools you now can use.

August is typically a month that is close to the same as July in sales - and this year was no different.   But the trends I've been discussing the last several months have continued and August was the 8th straight month with sales above the same month in the last 4 years and the 9th straight month with sales above the same month in the previous 3 years.  So the stability in the recovery in this local market is continuing.

Last month I had a survey up on the site to get feedback on what you wanted in my new site and the answers were very helpful.

One of the questions on the survey was "Which of the following would you use if available?" and the answers were:  Map Search, Listings by City or Community, Foreclosures Search, Sold Listings, Price History, Walk Score and Mobile Access.  The top 2 answers were Map Search and Price History.

The good news is that all these are now part of this new site with the exception of Listings by Community and Mobile Access which will be added in the near future.

I think when you see all the tools you now have that you can use when searching for properties and the wealth of information that wasn't available to you before, you'll probably be as excited as I am about all this.

I don't want to keep you any longer because I want you to be able to start to check out what is available to you now and I'd love to hear what you think about all this once you've had a chance to play around with the new tools.  If you want to see what is available here now, I've put together a brief Video that you can watch which will go over these new tools and how to use them.

Hope you like the new site and find the new tools useful and that I'll be seeing you here soon.

Sincerely,
Ron

This month I'm going to try to do something that might not be easy - counter the overwhelming amount of bad news lately that has been being thrown at us every day.

It may only be good news about Florida real estate but heck at least it's some good news.

But first, last month's sales statistics.

July is generally a down month for sales compared to earlier months although in 2009 we saw pretty strong sales due to the tax credit.

This year, as was seen during all of the last 4 years, sales in July were down from June.  However, when comparing this July to the last 4 Julys, we were higher than all those years including 2009 when the tax credit boost helped drive sales up.  This is now the 7th straight month where sales were higher than the same month in all of the last 4 years and the 8th straight month with sales higher than the same month in the last 3 years.  Once again, the recovery trend in our local market is continuing and defying all the negative predictions.  See the graph below:

It's time to take a look and how the current real estate market got into its current condition and where things may be headed from here.

Each month I go over the last month's sales statistics and look at what that tells me about our local market.  This month, in addition to that, I'm going to go over what is happening with our inventory levels and what that has to do with the condition of the current real estate market here.

I'm also going to ask you about whether I should include a new feature on this site and need your feedback.

But I'm going to start with the June sales numbers....

Each month so far this year it appeared, in the beginning of the month that we were starting to seeing a slowing of the positive trend that has been going on the last few years and by the end of the month the sales were way up.  I really thought that June would show a slowing of sales as it is pretty typical that the Spring months are strong and then sales weaken during the summer.  So June was another surprise.

The sales last month were not only slightly up from May and higher than the month of June for the past 4 years, June's sales were actually the 3rd highest month from January 2007 forward.  When you look at the chart below you'll be able to see that the turning point began in December 2008 and other than the 5 months following the end of the tax credit last year, every month starting with December 2008 has at least been above the same month in the previous year with the last 6 months being higher than the same month in the previous 4 years.

As I've been saying, this is a trend that shows a recovery in our local real estate market and demonstrates strength.  This doesn't mean that everything is all better now or that there can't be some problems in the future.  But it does mean that there is an underlying strength in the recovery in our local market   House prices appear to have stabilized and condo prices look like they may have reached the bottom too.

Here's the sale chart for last month:

Now I'm going to take this a step further.  There is another statistic that is used to look at the stability of a real estate market which I mentioned quite a while ago but haven't really covered since.  It has to do with the existing inventory of homes for sale.

In the boom market that peaked in 2005, there were so few listings and so many buyers that sales and price statistics went nearly straight up for a while.  A measurement of the condition of the real estate market can be done by taking the total number of properites for sale in a specific area at a given time and dividing that by the number of sales in that area during the same time period.

For example, if there were 10,000 properties for sale in a specific county at the beginning of July and during the month of June there had been 1000 property sales in that same county you would divide 10,000 by 1000 and get a figure of 10 - which is the # of months of inventory in that market.

During the peak of the market here the # of months of inventory was around 2, at the worst point it was about 32.  A normal market is somewhere in the 5-7 months range.

Over the last few year I've been watching the inventory levels slowly descending on a steady basis and so I thought it might be a good time to look at the trend and I found something quite interesting when I put together a chart.  The inventory levels are starting to flirt with the 'normal' range again.  See for yourself:

There are also some repeating trends on this chart you should notice.  The highest month each year is January (which is typically the lowest sales month); the graph trends downward from January thru about April each year then trends upward the rest of the year (except for 2009) and there is typically a steep drop in December.  These tend to follow the buying trends - January the weakest month; improved sales throughout Spring; slower sales during the summer; strong sales in December.

If this year follows the typical trends we should see the the light blue line start trending upward and probably hovering around 10 during most of the rest of the year.

Now what does this mean and why did I call this newsletter "Are the House and Condo Deals Disappearing"?

With the inventory reaching more normal levels and the sales remaining strong we have a situation where demand has been increasing and supply has been decreasing.  I wrote about this in a few of my previous newsletters where I described situations where buyers were losing out on deals because of competition from other buyers.  In addition I've noticed that the low price range properties that were available at the end of last year aren't around anymore or are only rarely seen.

A lot of buyers and investors recognized what was going on in this local market and acted quickly to get in on the action and that resulted in increased sales and a reduction of inventory, especially the really well-priced properties.  Another factor that increased the demand was a brutal winter season.  I regularly hear from buyers in the northern states that they have decided they have had enough cold weather and are now ready to buy their winter home or retirement home in Florida, especially since the prices are so much better.

So what does this mean to you?  It means that you need to know that sellers won't always be as easy to negotiate down in price, there will be less of the truly exceptional deals available and you will need to be fully prepared and act quickly when you find one, and that you shouldn't procrastinate if you're ready to buy but think maybe you should watch what happens just a little longer.

How this market will proceed in the future will depend on what happens with both the national and state economies and employment rates but even so I think that even if it doesn't continue to grow it will remain fairly stable.

Now there's one last thing I wanted to cover and I'd like your help on this.  I've been working on putting together a report that will show all the foreclosures listed in the northern half of Pinellas County and the beach communities and have a way to publish this on my site with a daily update.  I've got this report set up where it will show what is available broken down by type of property and by city and community, and I have been able to program it where you can search by price range, square footage, number of bedrooms or bathrooms, etc. and even will show you how long it has been on the market.  But then I wondered if anyone would really use this tool or have any interest in it.

So I'd like your feedback on this to see if there actually is a demand for this information.  Please either leave a comment below to let me know if you have any interest (or not) or send me an email to let me know.  If I see that there is enough interest I will finish my work on this project and then let you know when it is ready.

Make sure you do something you enjoy this summer and I hope to see you here soon.

Sincerely,
Ron

The next couple of months will be important in determining the strength and stability in the Clearwater homes and Pinellas County real estate market.

We've seen strong sales the last 3 months but I'm starting to see a slight slowdown and it's not clear yet if it is just the typical change that occurs when we start to enter summer..  It is not unusual to see some slowdown this time of year - Mar through May are usually the strongest buying months.

I wasn't sure if May was going to be as strong as March and April were this year, being the 2 highest months of sales going all the way back to January 2007, but even though there was a noticeable drop from the range in March and April it was still higher than last May (and every May back through 2007) and ended up being the 3rd highest month of residential property sales in Pinellas County in over 4 years.  This is significant because this year there was no tax credit to boost sale and the 3 Spring months this year still were above the same months last year when the tax credit boost to the market was at its peak.

Look for yourself (orange is 2011 and you can click on the graph to see it full-size):

I know I've said this for the last few months and been wrong, but we might possibly see a slowing this next month.  I've noticed some slowing in the market recently but can't tell yet whether this is the typical change as we head into summer or an overall slowing.  I saw something similar in early February and one or two of the other months this year and it turned out that the overall sales for the month were still up.  So we'll have to wait until June is over to see what happens.

Now that I've given you this month's market update I want to cover some information for anyone who is planning to buy and will be getting financing for your purchase.  This is important information because with all the market changes the process of getting fnancing has gotten tougher and you will need to be prepared for what can come up to be successful in buying the house, condo or townhouse you utlimately decide upon.

At the end of this newsletter I'm going to put a link to an article that was reprinted from the Washington Post which went over 5 points of preparation if you plan to finance your purchase.  The last point is not something you can do much about if it is a problem but the first 4 are definitely under your control.  The 5 points covered in this article are:

" 1.  Start by requesting your free credit report.

  2.  Organize all your financial documents.

  3.  Keep your finances simple for at least 2 months.

  4.  Document your downpayment.

  5.  Show a stable work history for the past two years."

There is more detail on each point in the article and I would say that you should especially pay attention to what it says in points 2 through 4.

On this same subject, I want to cover an aspect of financing that I have found lately to be one of the more frustrating parts which you should be prepared for.  If you are aware of this it won't necessarily make it any less frustrating but you'll at least be expecting it.  What I'm referring to is the appraisal.

I have 2 deals that were both scheduled to close this next Friday (both are condos, both are estate sales, both need complete remodeling) and both have run into snags with the appraisal.

The first one had the appraiser come to the condo 2 weeks ago and it took until just a few days ago to find out what the appraised value was.  I won't go into details but part of the delay was poor communication by the appraiser and appraisal company about an issue that the mortgage broker could have resolved quickly but was allowed to delay things by days.

When we finally got the appraisal it came in $4,000 below the purchase price and when the seller's agent looked over the appraisal he noticed some discrepancies that would cause the appraisal to come out for less than it should.  Minor things (sarcasm here) like comparing a condo with a wide view of the Intracoastal waterway to a condo with a view of a pond and comparing the interior measurements of one condo to the exterior measurements of another - and not making any adjustments for these differences.  We now have the appraisal company and appraiser reviewing the appraisal in light of these points but because of the fact that it took them so long to get the appraisal report to us (and then get us an appraisal report that was flawed), we have now had to delay the closing a week.

The second situation is one where there were significant problems that came up on the inspection (including one that will be a major expense that the seller knew about and didn't disclose) and the buyer wants to work with the seller on the price due to this situation.  Since the condo could possibly appraise below the contract price we decided to wait for the appraisal to see how that came in as that could affect how we dealt with the price issue.  The appraisal was due on Tuesday but didn't come in.  On Wednesday the loan officer called the appraisal company and they said they would have it that day - but it still didn't come in.  On Thursday the loan officer called the appraisal company and they contacted the appraiser and we were told it would be in that day - but still no appraisal on Thursday.  On Friday we were told once again that the appraisal would be in but still no appraisal.

So now we are a few days from the deadline having to do with inspections issues and have to address that but without the appraisal it will be more difficult to know how to address properly.  And this purchase was also supposed to close this coming Friday and we are going to have to get a week extension.

This problem is a result of a law that our Congress passed 2 years ago as one of the many solutions to the housing crash where independent appraisal companies had to be formed to act as a middleman between lenders and appraisers.  Unfortunately there is little to no oversight or regulation of these companies and they get paid whether they take 3 days or 2 weeks to get the appraisal report to the lender and whether or not someone like a Realtor or buyer has to check their work to make sure it is right and get them to correct sometimes blatantly obvious mistakes.

I don't see any immediate solution to this situation and don't assume that this type of problem happens 100% of the time, but you should be aware that this can happen and be prepared for this possibly happening to you so that you won't get caught off guard if it does.

The other thing you should know is that this problem is not something you should feel hopeless about, if you have a good Realtor representing you and a good loan officer or mortgage broker working with you these problems will get handled in most cases and you will ultimately have a successful closing.  I'll let you know next month how these 2 deals ultimately turn out.

Well, that's enough for now.  I hope that this information will be useful to you and that it can help you in any purchase you make in the near future.  And keep this in mind when choosing your Realtor and the person who will help you with your financing because you really do need the best on your side at this time.

Hope to see you soon.

Ron

Article:  In tougher new mortgage reality, preparation is key