Dunedin Homes and Condos

Which Way is the Dunedin Homes and Condos Market Headed?

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

What this means for buyers is that you will start to see more competition and less negotiating room especially considering the fact that last month about 60% of the buyers paid cash.

For Sellers

What this means for sellers (more so for houses than condos except beach area condos) is that this if you were waiting to sell, this might a good time to go ahead and list your house or condo.

New Places to Keep Up to Date on the Local Market

There have been a lot of articles lately in a wide variety of publications that discuss this and that also discuss the fact that there will most likely be a noticeable increase in foreclosures coming on the market in the near future and to keep you more up to date on all this news I'm now providing you with a few different ways to stay current on what is happening. First, I've done a makeover on my Facebook page and am updating it quite regularly with the latest news on the real estate market and will also be putting info there periodically on local events and news.  Feel free to check it out and Like or Share anything on there you want.  I also would love to have you share news you hear about and also helpful information for others such as photos of any remodeling you've done, info about happenings in your local community and people or companies you've found that do go work in any of the areas having to do with taking care of or improving a home or condo.  You can see the new Facebook page by clicking here. Another place you can go to keep updated is the Real Estate & Area News section of my blog that will have these same articles. The third place where I will posting updates is in my Google + account.  You can get to my Google + page by clicking here and to keep up to date you should add me to your Circles.  If you don't have a Google + account and would like to get one (they are by invitation) just click this link and set up your account. Don't forget I also still have my Clearwater Beach condos for sale site at http://clearwaterbeachcondosforsale.com which is more focused on Clearwater Beach and the surrounding beach areas if that is what you're more interested in. There's a lot more to go over but since you can now read about other news on my Facebook page or Google + I don't have to include it here and so am going to end off for now. I hope to see you here soon and if you need help with anything, please let me know.

More Foreclosure Listings?

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

A Lot Has Changed in the Dunedin Real Estate Market in Just 12 Months

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.

Dunedin Real Estate in 2012

What will happen with the Dunedin Real Estate Market in 2012? A lot will depend on the economy and how it does this next year. The more stability that people see, the more the real estate market will improve. And with more people retiring, there are more people moving to Florida. In a recent article about population growth in different areas around the country from April 1, 2010 to July 1, 2011 they said that "Florida added 256,000 people during those 15 months, lagging behind only Texas (529,000) and California (438,000). Its growth rate was 1.36 percent, or ninth highest." I think that the Spring will be very strong like it was last year, but I can't say what will happen once we get into the summer months and then closer to the Presidential election.  We'll find out as the year progresses. Last year was very strong in the local market.  Sales started their decline in 2006 and continued until the end of 2008.  In December 2008 there was the first showing of some strength starting to return to the market and each year since has seen a 10-25% increase in number of sales in Pinellas County for residential properties.  In fact, the total number of sales in 2011 were nearly 55% higher than in 2008. Last month I wrote in my newsletter that I didn't think that December 2012 would be higher than December 2011 since that was such a strong month and I was correct.  But...it was only a few dozen less as you can see in the chart below (click on the chart if you want to see if full-sized):

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

Tips for Buying Better and Selling Faster in the Tampa Bay Real Estate Market

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

Have We Seen the End of the Buyer's Market for Now?

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.

Update on the Market and New, More Advanced MLS Search Tools

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

Some Good News to Outweight the Bad?

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:

(Based on information from:  1) PRO/Suncoast MLS for the period of Jan 2007 to May 2011 and from 2) MFRMLS for the period May 2011 thru the end of July 2011)

So let me quickly get into the good news and also tell you about some bad news that isn't as bad as it sounds so we can get into the gift card info.

The good news is that there is now more information coming out supporting what I've been saying about the recovery in Florida real estate.  At the end of July I got a daily news email from our state Realtor organization with an article describing a report from the Federal Reserve about real estate in the southeastern United States where they said "...Florida was bucking the trend and reporting positive news."

Here's the link to that article (and don't forget to come back and finish this newsletter if you go to read it):

Florida real estate gets high marks in Fed's laest economic review

Now for the bad news that isn't quite as bad as it is being made out to be (for the most part).

This past month there were stories on the news about the state-run insurer, Citizen's, requesting a very large increase in the sinkhole coverage portion of homeowner's insurance.  Figures like 400% and 2000% were brought up in these stories and I'm sure a lot of people were concerned.  The areas that will feel the most significant impact from this are in Pasco County (Holiday, New Port Richey and such areas) as there have been a lot of sinkhole claims up there and the rates were already high and will be going higher.  It couldn't have anything to do with all the billboards of attorneys promoting sinkhole claim services though....

Since most of the buyers I work with buy in Pinellas County I decided to see what this would really mean to homeowners in Pinellas County and was able to find a chart from Citizen's showing, county by county, what the proposed increase was and what the current average sinkhole premium is and what it would be if the proposed increase was approved.

For Pinellas County the chart lists 3 areas:  Coastal, St. Petersburg and Rest Excluding St. Petersburg.  The proposed percentage increases for these 3 were 2045.6% for Coastal, 163.8% for St. Petersburg and 5.2% for the rest of the county.

As shocking as the Coastal increase might seem, the current average sinkhole premium in that area is listed at $3 and would increase to $72 under this proposed rate hike.  Now that's still an increase and not a welcome one, but it isn't as horrible sounding when you know the actual amounts as compared to just hearing a "2000% increase".

It's always good to get all the information before assuming the worst.

Hope the rest of your summer is great and that I get to see you before the first snow flies!

Sincerely,

Ron

Harder to Get Good Deals?

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

Market Drop - Or Not?

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

There has been a significant change in our local market.

After I go over the statistics for last month I'm going to cover an important topic for anyone looking at buying a home, condo or townhouse in the area in the coming months.

I've learned some important things in the last few months about how our local market is behaving that can definitely affect how any purchases you attempt to make here will go.  I want everything to go smoothly for you and so you don't have to experience some of the things my other clients have gone through.

One other bit of news - our MLS is changing this week and you may notice some slight differences.  If you have saved properties you are interested in you should note down the addresses or MLS #s since, unfortunately, those saved listings will get wiped out when the transition is fully done.  But the good news is that the MLS will now include listings for nearly all of central Florida including Orlando, Ft. Myers, Sarasota, etc.

But before I get into that, let's see how April turned out.

In last month's newsletter I wrote about how surprised I was to see that the local real estate sales here in March were the highest since back to before January 2007 and that I didn't know whether the sales would be able to maintain that higher range.

I'm writing this newsletter post on May 1st and the last business day of April was 2 days ago, on Friday.  Typically sales do not all get entered into the MLS immediately and especially at the end of the month.  I've found that it takes 3-4 business days for the end of the month sales to be entered at that there are usually about 100 or so that are entered in those 3-4 days after the month ends.  Now, with that being said...

The final sales numbers for April show that there were just slightly less sales in April than in March but more than during April of last year.  So other than March of this year, April sales were higher than all other months back through and including January 2007.

Here's the graph so you can see for yourself (2011 is in orange):

I don't know what May will bring I feel pretty confident that the overall positive trend will continue.

I'll get into describing the market change in a moment but I did want to let you know that I came across two interesting articles this month and will have links to them at the end of the newsletter.  One is a list of the 'Top 6 cities where buying beats renting' and the other answers the question 'How can you beat a cash bidder?' so make sure to check those out after reading the rest of the newsletter.

So what's the major change in the market?

Last month I wrote about some of the experiences of my clients since the beginning of the year.  The attempts by one client to buy a high-end condo on Clearwater Beach facing the Gulf and being beat out twice and missing out on 3 other possibilities all in a 2 week period; other clients seeing houses and condos they were interested in going under contract before they could act; an investor who bought 4 condos in December and has been beat out on 6 since the beginning of the year.  This was getting to be so consistent that I had to look into this further to determine what was really going on and my investor client came to the same conclusion about a day before me.

Last year the market was doing well, especially due to the tax credit and then slowed down for 3-4 months after the tax credit ended and, in part, due to the problems that came up foreclosure paperwork.  December showed a big increase and sales have been strong since.  What appears to have been going on last year was that sales were strong due to the tax credit but there was still overall concern about the economy and real estate that caused many buyers and investors to hesitate on buying.  Experienced investors and buyers, however, viewed this as an opportune time to buy and likely a bottoming of the market.

But after getting past the uncertainty of the elections and what was going to happen with taxes it seems that there were more buyers feeling more confident about getting into the market, especially investors and cash buyers.  So, as my investor described it, the end of last year was like "a party" for those who were buying and now the party is over (or at least it's more crowded and the good appetizers are getting snatched up before you can get to them).

This doesn't mean that there aren't still good deals available but it does mean that a buyer's approach to the market has to be different if they want to be successful in securing good deals.

Each of my clients that lost out on these good deals since January was approaching the market as if it were the same market as it was last year and that was the error that both they and I were making.  Knowing this makes it possible to approach these types of deals differently and in a way that can be more effective.

The key points will be 2 that I have brought up in other newsletters but can see are even more important now.

The first is being prepared.  If you have not worked out how you're going to pay for the purchase or finance it and have to take time to get that done you can lose out.  This happened to one client that could have bought a condo for about 60% what the market value is for condos in that complex, but due to a delay in getting the documentation needed he lost out to another buyer who saw what a good deal this was and was able to act quickly.

That leads into the second key point - acting quickly once you find a good deal that you are interested in buying.  This is especially true with foreclosures because there can often be a delay of a few days before getting a response from the bank to your offer and if other offers come in the bank will then tell everyone to submit their "highest and best" offer and you will now have to hope you aren't beat out by someone willing to pay more than you wanted to get it for.

That pretty well sums up how you need to adjust your approach to making a purchase in this current market.  Included in the first point, in addition to be prepared in the financial aspect, is getting any information you need to know before making any decisions.  Questions you have about taxes, association fees, how the buying process works in Florida or anything else you would need to know to be able to make a decision should be addressed right away - these are things that you can get sorted out easily and can cause unnecessary delays at a crucial time.

You should always make sure to make a decision based on what is right for you and with all the information you need but to be successful in this current market you should be well prepared so that you can act quickly when needed.

I hope this helps you to better understand our current market condition and look forward to seeing you in the near future.  Don't forget about the links below to the articles I mentioned.

 

Sincerely,

Ron

Top 6 cities where buying beats renting

How can you beat a cash bidder?

Getting Those Great Foreclosure and Short Sales Deals

This month I'm going to dive into a topic that seems to be of interest to a lot of people lately:  Finding and buying, or investing in, foreclosed properties and short sales.  I'll also tell you about an upcoming tool for those of you who are qualified buyers for these kinds of properties.  (This is a pretty long newsletter this month but I think you'll find there is a wealth of valuable information here.)

First I'm going to give you my monthly review of the previous month's sales statistics for our county.

In last month's newsletter I wrote that I was predicting at least one, if not all three, of the months from March to May would see a drop in sales as compared to last year. In 2010 the homebuyer tax credit had a deadline of April 30 for contracts and June 30 for closings.  This resulted in a spike in closings during Feb-May and gave us the 4 highest months for sales since before Jan 2007.

Immediately after the end of the tax credit (June was the last month for closings) the sales dropped noticeably and there were stories throughout the news about this drop and how it might mean the housing market had crashed.  True, July through November saw sales below the same month in the previous year which was something we hadn't seen since November 2008, but with the artificially inflated numbers due to the tax credit you had to look at this in context.

Then in December of last year we saw another spike in sales.  this was not just the first month since the end of the tax credit where we saw sales higher than the same month in the previous year, December's sales actually came in as the second highest month since January 2007 and this was without the tax credit.  The question was whether or not this would be a one-time thing or would be a trend that would continue.

January sales were higher than every January back through 2007 and the same held true for February.  But March had a higher hurdle to clear since the sales numbers in April 2010 were the highest since before January 2007.  So how did last month fare?

The final numbers are now in and the sales last month not only topped every other March sales figure going back through 2007, but it ended up being the highest sales month since prior to 2007. 

Here's the chart so you can see for yourself (chart below was prior to final figures from last minute MLS sales entries - updated chart can be found at Final Sale Chart for April 2011):

 

It is definitely easier to see and understand what is going on by being able to look at a chart of statistics.  This is important because you have to look at what is going on in a specific local market - there may be a national trend but that doesn't mean every area is the same.

Now there is something that this chart doesn't show which is important to know.  In January one of my clients emailed me asking about the drop in prices in the area and I checked into this because throughout 2010 I had been seeing the average price staying nearly even with 2009.  When I checked into this in January I saw that there was a drop in December and when I checked again in February and March there was a drop again in both January and February (as compared to the same month in the previous year).  Since the trend through 2010 had been that the prices stayed nearly the same as in 2009 this seemed odd so I dug into this further.

What I found was that the percentage of foreclosure and short sales closings had jumped in December and that in January and February the number of short sales closings dropped to their previous levels but that the foreclosure sales closings had stayed up in the higher range.  Some of this has to do with the problems that began last October with bank paperwork on foreclosures that stopped a lot of foreclosure sales closings in November and December, and the percentage of foreclosure closings has been gradually drifting back down since the peak in January.  But they are still at a higher percentage that they were at before December, even last month.

You might think these are just very cheap, run-down condos and houses being bought by investors, and the majority are, but 10% of these foreclosures were properties that sold for over $200,000 and one was a house on Indian Rocks Beach that sold for nearly $2,000,000.

I can tell you from personal experience that there are a lot of investors right now looking for and quickly buying up bargain properties but even that doesn't tell the whole story.

I have a client who has been interested in a beach front condo in a particular complex on Clearwater Beach and has been watching the market for several years.  A little over a month ago we noticed that there were some of the direct beachfront condos in this complex that were on the market as short sales and foreclosures which were priced $200,000 or more below what these condos had been selling for.  He had to arrange a trip here to see them but couldn't come for 2 weeks and before he could even get out here the 1 foreclosure and 2 short sales he was interested in all went under contract with more than one buyer submitting an offer in at least one of these cases.  The next week one of the contracts fell through and he put in an offer and while we were negotiating with the bank on this foreclosure another buyer came in with an offer and beat him out on it.  Then another short sale came on the market in that same complex and within about a week that one was under contract.

I bring this up as an example of how the interest in our local market is not just about the really inexpensive properties but rather has to do with good deals no matter what the price is.

What you need to do if you are looking to find and buy really good deals here, whether as investments or as a second/vacation home or condo or as your main residence, is follow some important rules.

1.  Be prepared for the financial aspect of the purchase.  In every foreclosure or short sale situation you must have proof that you are financially able to make the purchase.  If you are paying cash, you will need to have a bank statement or other proof that is no older than 30 days to show you have the funds to make the purchase.  If you plan to finance your purchase you must have preapproval for a loan to cover the purchase price.  Banks will not even look at an offer on a short sale or foreclosure without one of these.  And the first choice for a bank will always be a cash buyer.

2.  Be prepared to act quickly when you find what you're looking for.  There are a lot of people looking for the great deals now so when you find t hem you may be competing with other buyers so any delays bring about additional risk of another buyer getting there first.  This is especially true with foreclosures as sometimes it may take a few days to hear back from the bank on your offer and during that time other offers may come in that may be better than yours.  You also need to be aware of what happens when a bank gets more than one offer on a foreclosure property.  When that happens the bank will tell all potential buyers to submit their "highest and best" offer and they will then review all of these and take the best one as long as there are any that are acceptable to them.  I have seen this often on inexpensive, investment properties but this also happened on the Clearwater Beach condo deal and it can be quite frustrating to almost be there and then lose out.

3.  Get your research done right away so you know what a good price for a property is.  When you find a property you're interested in you should ask me right away for comparable sales to see what the property is worth and determine what you feel it is worth to you.  For investment properties that you will be buying and renting out, you should also get info on what the most recent rentals have rented for.  But when you have all the information you need, make sure you review it quickly and decide whether or not to proceed.

4.  Know what you can and can't afford to do.  Don't rush into something that you will regret later because you couldn't really afford it.  You should figure this out before you even start looking at property listings.  Know what the taxes will likely be, an insurance you may have to obtain, monthly fees or condo or homeowner associations, mortgage payments if you are financing your purchase, etc.  For investment properties, what repairs or improvements you'll likely need to pay for, what you can make monthly above your expenses based on what the property should rent for and what it will cost you until you can get it rented out (holding costs).  I've stressed in the above points the need to act quickly and decisively but before you can do that you need to know what you can and can't afford to do, so get this figured out first to give you something to measure against.

5.  Be realistic.  If you aren't realistic about what you're trying to find you will never find it.  This doesn't mean that you can't get deals better than what properties are listed for or that you should pay more than what a property is worth or that you can afford, but if you think you're going to find a 3 year old home with a pool on an acre of land in pristine condition for $50,000 you'll be wasting your time.  You need to set realistic expectations.  I've had people asking me from time to time to find something that doesn't exist.  I tell them that the price range they have set for what they are asking for will only get them properties which are either in areas they don't want or in a condition that will require an almost complete gut and rebuild (neither of which is what they want).  You also need to be realistic about what it may take to face the type of competition on some of these really good deals.  If you think you can take your time and casually proceed, you may find that the speed with which you need to move and the stress of competing against other buyers may be more than you want to deal with.  You also need to be realistic when dealing with short sales as to the time involved.  It can take 3-6 months or more to get a reply from the bank on an offer you submit and you need to be prepared for this and I don't recommend even pursuing one if you aren't ready to go for months without hearing anything.  However, I do know how to find short sales that, in most cases, won't have this problem.

Now that I've covered these rules I want to go over 2 tools that can help you if you feel you are ready for this.  One I have mentioned before and the other is something new I'll be offering.

The first is the ability for you to do digital signatures on offers.  I've had several clients now that have utilized this service and they have all found it to be very helpful as it makes the process of submitting an offer (or several offers) much easier and faster.  You don't need a printer, scanner and/or fax machine and you don't have to wait until you get home or to your office.  This is especially helpful when you don't live locally.  There are some lenders that won't accept digital signatures, but in most cases I have found that this isn't a problem.

The other tool is one that will provide you with listings of foreclosure and short sale properties the instant that they are entered into, come back onto or are changed in the MLS.  With all I have said above you can see why the ability to act quickly is important and being able to find out that a property has come on the market or has come back on the market or had a price drop within seconds after that has happened is something that will give you quite an advantage.

I'm making this available now to only a limited number of people and only to qualified buyers and investors who are looking to purchase now, not for buyers looking at buying 'some time in the future', and who will follow the 5 rules above including having their proof of funds or preapproval ready.  This doesn't mean that I won't provide listings to other buyers - I will and you can be set up to receive them the day after they are listed, come back on the market or have a price change.  But to get set up to receive listings instantly after they are listed or back on the market or having a price drop you need to be in the category I described above.  And you will also need to have specific criteria for what you want to find including type of property, price range, specific areas or cities, etc.\

For anyone else who isn't interested in all this, I'll continue to work with you as I always have been and on your time frame and at your speed.  But to assist those who want to take advantage of the opportunities available currently, I felt I should offer you these additional tools and services.

I hope that wherever you are the Spring weather is will make this one a pleasant one for you and I look forward to seeing you when you are next in the area.

Sincerely,

Ron

Does It Have to Be Difficult and Stressful?

I was pretty surprised with how last month's sales turned out and I'll be covering that along with the most recent sales graph.

This month, after going over the sales statistics, I want to cover a subject that will likely be important to you - the potential stress that goes along with buying a home or condo, how to reduce it and what that is worth to you.  But first, let's look at how February sales did...

In my last newsletter I wrote about the ups and downs in the local real estate market and how during the first part of the month it looked like February was going to be down, possibly breaking a long trend of recovery.  I had noticed several signs during the first week or so of February that this was not only possibly, but likely.

Then, about the second week or so of February, there was a noticeable change.  I don't have an explanation for why this occurred.  It could be that the bad winter storms up north delayed some people's trips or any number of things but whatever it was that caused this is does not appear to be a permanent or long-term reversal of the recovery trend we have been seeing.

In fact, by the end of the month the sales were not only up from January and from last February - they were the highest for any February since 2007!  This now makes 27 straight months where our local sales were higher than in the same month of the previous year, and the third straight month with sales higher than the same month in all of the last 4 years.

Will this continue?  Well, not to be too much of a pessimist, I'm predicting that at least one (if not all three) of the next three months will have sales lower than the same month last year (but probably higher than than the same month in 2007-2009).  The reason for this is that last March-May saw a dramatic spike in sales due to the ending of the tax credit.  As I've written before, I feel that caused an artificial jump in sales during those months and that will be hard to beat.  However, it does look like the steady increase in sales will continue through the next several months based on what I've been seeing in demand.

In fact, just in the last few weeks I had 2 clients that were interested in properties that had been on the market for 2 months or more see those properties all go under contract within a 1 week period.  And these were not just lower-priced properties, some were in the $700,000 to $800,000 range!  We'll find out next month if I'm right about what will happen.

But for now, here's the chart showing the local sales from 2007 through last month with the orange lines being 2011:

By the way, if you want to see the chart better and be able to read the numbers, just click on it and it will open in a new window full-sized.  Just close the window when you're done looking at it to get back to this newsletter.

Now onto the main topic for this month.  What is it worth to you to be able to buy your home or condo or townhouse knowing that you don't have to worry about most of the problems that can come up?

In previous newsletters I've shared some of the stressful situations my clients have had to go through; being a seller who needs to get the short sale deal on their house closed before a lender forecloses when they have an interested cash buyer under contract, or before the buyer won't wait any longer, while watching their bank dragging their feet on approving the short sale; being a buyer who has to change their financing twice due to new rules being passed while waiting for short sale approval; being a buyer who finds out as they are driving to Florida for the closing that an error was made by the loan officer at their lender and their loan may now not get approved.

Fortunately in all these cases the clients were people who didn't give up easily and who acted quickly when they were asked to provide information or documentation.  Even so, they went through periods where they didn't know whether the outcome would be positive or negative.

The advantage they did have was a good Realtor who doesn't give up.  You might think I'm just tooting my own horn here but the point I'm trying to make is how important it is to have a competent Realtor represent you as a seller and as a buyer.

There are dozens of step that have to be done correctly and in a timely manner for you to have a successful purchase or sale and finding the right house or condo for a buyer, or finding a qualified buyer for a seller, is just the beginning step.  Getting from that point to a successful closing involves many actions that have to be done by sellers, buyers, inspectors, title companies, condo or homeowner associations, lenders, etc.  More often than not someone along the way makes a mistake or doesn't do what they are supposed to do correctly or in a timely manner.  What your Realtor should do for you is make sure to watch that everyone is doing their job and doing it correctly, and getting involved quickly when they find out someone isn't.

It may seem like it is all very simple and should just move along smoothly, and sometimes it does.  But more often than not there are at least a few points along the way where things go off the road and have to be gotten back on it again.  If you don't know what to do about these things it can get to be very stressful and frustrating and can even mess up the whole deal.  You have enough to do without having to become an expert in all these other fields to be able to sort out any of the many problems that can occur.

When you have the right Realtor working with you there is a certainty you will achieve that someone is watching out for you and that nearly every problem that comes up can be solved.  This doesn't mean that there won't ever be situations where you will have concern or feel stress - but it does mean that you won't be facing it alone and without the knowledge to fix it.

One thing that is needed in a good Realtor is a willingness to go beyond the normal expectations to find solutions.  For my seller mentioned above, when the buyer was getting anxious and I couldn't get anywhere with the people at the bank handling the short sale, I went online and found a forum where someone posted the email addresses of the top executives of the bank and then emailed them about the situation.  I got a call back that same day from the bank's executive offices and someone there helped me get the short sale department to actually start doing what needed to be done.  It was this action (and several others that I won't go into detail about again here) that lead to a successful closing with 1 day to spare before the date of the foreclosure.

The other thing that is needed in a good Realtor is a good level of communication.  In all the situations above I made sure to keep my clients informed about what was going on so they weren't getting overly worried because of not knowing what was happening.  Even if I couldn't get an answer I'd let them know that I had called or emailed to get an answer and that I'd let them know when I heard back.  The only times I didn't keep them in the loop was when there was a serious problem that would have worried them that they couldn't do anything about and which I felt I could handle quickly.  Then, I did what needed to be done and when I had the problem resolved I let them know about it.

I bring all this up because I have interactions with people from time to time that don't understand why they need a Realtor to represent them or choose someone randomly or based on a recommendation of someone they know (but who hasn't had personal experience with the Realtor themselves) and don't feel there's any problem with that.  In some cases they get lucky.  But is it worth it to take a risk on something as important as this?

There are many good Realtors out there and I have worked with a lot that I feel do put the same kind of effort into helping their clients as I do.  When you're ready to buy or sell make sure that you have a Realtor that will do a professional job and help take a lot of the burden off of you.  And when you do have a good Realtor that is helping make things easier on you, you need to help make their job easier by doing what you are asked to do and in a timely manner.  Sports teams that win championships are not the ones with the 'stars' that think it's up to them to win - they are the ones where everyone on the team works together, doing their own jobs in the best way and in the way that helps their teammates do theirs.  A real estate deal is a team effort and you need someone who can 'coach' all the team members to make sure they do their jobs in a way that the end result is success.

On a completely different note - I highly recommend the movie "Secretariat" if you haven't seen it.

Hope to see you here soon.

 

Sincerely,

Ron

Ups and Downs? What Will the Future Hold?

This month I'm mainly going to discuss where the local market stands and where it looks like it is going.

Last month was another surprise after December's dramatic increase.  Typically January and February are the lowest sales months of the year.  I believe this is because many of the deals in the last quarter of the year close by December 31st and there aren't as many contracts written in November or December due to the holidays - so that would mean less contracts closing in January and February.

So what was the surprise last month?  Local sales increased at least as dramatically as the did in December.  After the tax credit ended in June and sale dropped in July and August there were a lot of people pointing to that as a sign that the market had crashed and that the tax credit just covered up a bad market.  It was to be expected that there would be a drop after the tax credit ended and there is some truth in the fact that it did artificially increase sales.  However, the sales in December and January don't fit with this assumption.  In fact they show that there is some underlying strength building in this local market.

See for yourself in the chart below (blue is 2007, red is 2008, green is 2009, purple is 2010 and orange is 2011):

Now that we've seen the Ups, I'll discuss the Downs.

Early indications for February are showing a noticeable slowing this month in sales.  With the horrible weather in the Midwest and East Coast I can't say for sure if this is related to the weather affecting flights and travel plans or not.  I do know that I have a lot of clients coming here to look at homes and condos starting this next week through the rest of this month and next month so it may be that February starts slow and then picks up, but we'll have to wait and see.  In my next newsletter you'll find out what happened.

Now that I've discussed the Downs I want to look at what the future may hold.

I don't have a crystal ball so don't assume that what I'm going to say here will come true.  But I'm already seeing indications that this year will continue to show strength.

One factor that may have an impact on the rest of this year is the horrible winter weather throughout much of the midwest and east coast this year.  I'm hearing from a lot of people in those areas that want to have a winter home or condo in Florida to escape to before next winter.  With Florida being the only state in the country without snow the other week and temperatures in the 70s while much of the country was freezing, the appeal to buy a winter home or condo here is pretty high.

I've seen this occur in the past only to die down once the weather stabilized, but this year does seem different.

That, and the incredible prices on homes and condos right now, are likely to combine for a very strong year in sales in our local market.  At least that's what I see happening.  We'll know more as the year goes on.

I hope that you do get a chance to enjoy the weather and activities down here some time this year and I look forward to seeing you when you decide the time is right for you to buy.

Sincerely,

Ron

December Market Report, Digital Signing for Contracts, Mobile Sites

Boy do I have a lot of new stuff to tell you about this month including a real surprise in December’s sales.  An easier way for you to sign forms when you’re not here, a way to look at the exceptional deals I post on my site on your smartphone – but as usual I’m going to start out with a market report for December.

Typically December has an increase in sales over November which is what I expected last month but with the trend we’ve been seeing since July I expected the total sales to be lower than last December but higher than December 2007 and 2008.

The big surprise last month was that not only were the sale higher than the last 3 years in December but they were also the 2nd highest month from January 2007 onward except for April of this year (the month the tax credit ended for contracts).  This is a very good sign and reinforces what I’ve been saying about the market stabilizing and starting to trend back upward.  From what I’m experiencing, I attribute this increase to the fact that homes, condos and townhouses have become so much more affordable that more buyers are coming back into the market.

Here’s the graph so you can see for yourself (blue is 2007, red is 2008, green is 2009 and purple is 2010):

 

That was quite a pleasant surprise and hopefully a good sign for 2011.  A lot of my clients have taken advantage of the market now and have been able to get some incredible deals and there are still more out there.

Since a lot of my clients are from out of town, it’s not uncommon to have to do some of the paperwork when they are back home.   I’ve found that doing this can be time-consuming and a waste of paper because I have to email the client contracts to sign, then have them print them out and sign and date them, then fax them back to me.  And sometimes this occurs a few times.  I have one client in particular that is purchasing several properties and I wanted to see if there was anyway to streamline this whole process.

I had heard a while ago about digital signatures and how they are accepted as valid, so I checked on the status of this currently and found that it is an acceptable method, very easy to do and that it greatly simplifies things for my clients and saves them on paper.  So I found a service that works with our local MLS and their forms and have now implemented this service.  It is called DocuSign.

So far I’ve had 2 clients who have been able to use it and it really is much easier.  Basically I prepare the paperwork and put ‘tags’ in all the places you would need to sign, date or initial.  I email the paperwork to you and then you do a few brief setup steps and then, after reviewing the paperwork, just click on the places you need to sign, date or initial and then send the paperwork back directly from your computer.  No paper to print out if you don’t want to, no need to have a fax or scanner and this works with most paperwork related to submitting an offer and going to contract.  Some banks have additional paperwork (especially with foreclosures) and some don’t accept digital signatures, but for the most part this can be used.

In addition to this, I’ve now set up my website (searchclearwaterhomes.com) so that you can access a lot of it on a smartphone.  It is mostly the blog portion that works on mobile phones but that is where you can read my monthly newsletter and see any new exceptional deals I post.  Unfortunately I can’t get the Search MLS or Personalized Search sections to work on mobile phones, but don’t forget that I have the mobile app you can use on your phone to search the MLS.

That’s all I have for right now but keep watching as the year goes on because I think it’s going to be a very interesting year and I will likely have more tools for you to make things even easier as we progress through 2011.

I hope we all have an even better year than 2010.

Sincerely,

Ron (727-687-1160)