Dunedin Real Estate - Are We in a Recovery or Is It a New Real Estate Bubble?

This month's newsletter will be a little shorter than the last few (which may be a relief to some of you) but I'm only going to cover one topic this month after reviewing the local market statistics and that is whether the current condition is a real estate recovery or a real estate bubble.  One reason for the shorter newsletter this month is that I am still in the midst of moving and have my brother's wedding and reception coming up so my time is a little shorter than usual. Last month's statistics not only show the continuation of strong sales and restricted inventory but is now the month with the highest sales since 2006 and the lowest inventory.  March, April and May now are the 3 highest months of sales since 2006 and we have had a continuous 17 months of sales where each month was higher than the same month in all of the past 5 years (and from January forward this year - all of the past 6 years).

We are also at the lowest point in month's of inventory since just after the market started to turn in 2005 (in July 2005 we hit the low of 2.5 months inventory).  As a result, prices have been rising and are actually up nearly 10% from where they were at this time last year.

Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru May 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service. So what does this mean?  Which is it:

Real Estate Recovery or Real Estate Bust

You'll probably hear both of these being talked about on the radio and television but which is it? Looking at the charts above you'll see that this trend did not just happen in the last month or two but actually began in December 2009.  It was at that point where we were starting to consistently see sales in a month higher than the sales in the same month of the previous year (from that point there were 19 consecutive months like that).  This was followed by a 5 month period that broke the trend but then it started again and has been consistent every month since then. Beginning in January 2012 we began to see each month's sale higher than the same month in all of the previous years back through 2007 and that has been consistent for every month since then. Price generally start to increase about 6-12 months after sales increase and the stable increases we saw that began last January have resulted in increased prices that started showing up last fall and winter. What is contributing to this and accelerating it is the low levels of inventory.  When you get below 5-6 months of inventory you are in a seller's market and we have been in that range consistently since March of last year with January 2013 being the only month above 5 and we are now very close to going below 3 months. There is much speculation about why this is happening and whether it will last.  I attended a webinar recently that was presented by the group I trained with to get my Certified Distressed Property Expert designation and the information they presented was very interesting and explains what is going on. From 1968 to 2008  there were at least 1 million new homes built every year with an average of about 1.5 million homes per year.  Since 2008 there was an average of  less than 650,000 homes built each year and even though new construction is picking up, it will take a while to get back up into the previous range which will result in a shortfall of hundreds of thousands of homes.  It is understandable why there was such a reduction in new homes being built but this did result in a backlog of new construction that is needed. In addition to this, many homeowners have been waiting to sell and there are a lot who don't realize that they now have equity in their home that wasn't there 1, 2 or 3 years ago. Finally, the number of foreclosed homes and the number of homes starting into foreclosure have dropped quite dramatically from the peak in 2010 and is still declining. Based on all of this, the current conditions we are seeing will very likely continue for at least the next couple of years with strong buyer demand and reduced inventory, resulting in price increases.  There are concerns over there being a 'bubble' and it is possible in some markets that are overheated, like south Florida (Miami area) that we could see this somewhat - but unlike the period in 2004-2006, we are seeing a much higher percentage of cash buyers as opposed to financed deal, buyers are not willing to pay above market value in most cases, and the price increases we are seeing are not nearly as high as during the previous period. Also, during that past period there was a lot of newly built homes and many that had already begun when the market turned.  Today, we do not have that same level of new construction being completed or even starting as of yet. That doesn't mean that we couldn't get to a point where there is another bubble at some time in the next few years - but what we are seeing right now is not a bubble but an actual recovery in our local area.

Dunedin Real Estate Seller's Market - Best Approaches for Buyers and Sellers

With sales at 7 year highs and inventory at 7 year lows our current real estate market brings a new set of challenges for buyers and sellers. One of the biggest mistakes a buyer or seller can make is to act based on previous market conditions rather than current market conditions. Your success as a buyer or seller, or in dealing with a potential foreclosure on your home or condo, depends on knowing the correct actions to take based on today's market. So let's start by looking at where the market is before I tell you about a new way to get property info on your smartphone when you are out and see a house or condo that interests you, and why your property might be worth more than you think.

Table of Contents
Statistics and Graphs
Sellers Approach to the Current Market
Buyers Approach to the Current Market
Mobile App to Get Info When Out Looking

Statistics and Graphs

April is typically one of the strongest months for sales each year and this year was no exception. In fact, saw a dramatic increase over March and also last April and was the highest single month since the end of 2006. This is now the 16th consecutive month with sales higher than the same month in the previous year and also higher than the same month in all of the previous years back through 2007. Check it out on the graph below (click on the graph to see it full size):

As a result, the inventory levels hit another low last month and are definitely in the range where this can be called a seller's market.

Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Apr 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

This shows the current condition of our local market and this is what buyers and sellers need to know so that they take the correct actions.

Some sellers don't realize that this is the current condition and, especially those who were underwater on their mortgages or those who were waiting for values to rise before selling, think that it still may not be a good time to sell.  I added a post a short while ago that provides information about this for sellers who may be in this situation - Three Reasons Why Your Home or Condo Might Be Worth More Than You Think.

Some buyers don't realize this and think that there are lots of choices and that they can still buy at well below market value prices, especially when it comes to short sales and foreclosures.  But then they find out that any property that is listed at or below market value will go under contract often the same day it is listed and that short sales and foreclosures are selling very close to market value too.  The only exceptions are properties which are in bad shape but those also are selling for market value for a property in that kind of condition.

The number of foreclosures have been dropping and I recently attended a seminar with a representative from Fannie Mae who works with short sales and has experience with their foreclosures department and he made it very clear that when determining the purchase price they will accept they look at market value and are no longer deeply discounting these properties. Of course this all depends on the condition of the property too. But one telling comment he made was that they do not refer to short sales as 'distressed properties' but rather a situation where there is a 'distressed seller'.

From my experience you can get some reduction from the listing price on short sales and foreclosures but that is entirely dependent on their condition and how the market is doing in that specific area, and the amount of reduction may only be 5-8%

One more thing I've seen with sellers that I need to comment on is that some sellers have a misconception that due to this being a seller's market that buyers will pay way above market value only to find out that their home or condo sits on the market with no offers coming in.

So how does a buyer or seller approach the current market.

NEXT: Best Approach for Sellers

Best Spring for Dunedin Real Estate in Over 6 Years

March 2013 now holds the record for the strongest month of sales in our local market since 2006 and, despite having the most new listings in several years, reached a new low in inventory since nearly 2005.

Table of Contents Statistics and Graphs Helping a Deserving Mother and Wife Get Her Dream Home Another Homeowner Saved from Foreclosure Dealing with a Tough Negotiation

Statistics and Graphs

March has been a very strong month for sales the past few years and I thought that we'd probably be higher again this year, based on the trends we've been seeing, but I was surprised once again at how strong March actually was.

Another interesting circumstance the past 3 months is that the number of listings come on the market in the months of Jan-Mar are even less than the numbers for those 3 months last year.  Those were the strongest 3 months last year for new listings and the fact that we had lower numbers this year during those 3 months with increased sales in all of those 3 months means that we are in a continuing inventory shortage.  In fact, at the beginning of this month we were at the lowest level of inventory so far since the beginning of 2007.

Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Mar 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service. This all bodes well for our local market and is continuation of the recovery trend and also shows that we are in a seller's market.  Another indication of this being a seller's market is the frequency with which we now see competition between buyers for well-priced, good homes or condos.  I'll go into an example of that below. Despite it being a seller's market right now, buyers may compete for properties and even pay above the listed price, but buyers are not agreeing to prices that are too far out of line with market value.  This means that houses, condos and townhouses that are priced too high will stay on the market longer than the average.  But buyers do need to be aware of the fact that if they find something they like and it is well-priced that it can go under contract very quickly.

NEXT: Fast Action Wins for Safety Harbor Woman

Helping a Deserving Mother and Wife Get Her Dream Home

Table of Contents
Statistics and Graphs
Helping a Deserving Mother and Wife Get Her Dream Home
Another Homeowner Saved from Foreclosure
Dealing with a Tough Negotiation

The experience I had this past month in trying to get a client her dream home will illustrate why it is important to understand the conditions in our local market and to be prepared if you want to get a property you like and it is a property that is well-priced and in a popular area. My client is a working wife and mother and has a wonderful 21 year-old son who has a physical disability and wanted to find a nice house at a reasonable price to buy in Safety Harbor close to the downtown area.  We were looking for a few weeks but any we found either were not quite right or went under contract too quickly.  I had made sure from the start that she had her financing worked out and, since she was paying cash, had a proof of funds. I had set up an automated search in the MLS so I would be notified immediately if something came on the market that met her criteria and on a Thursday evening I received an email with a listing that looked exactly like what she wanted.  The seller was not represented by a Realtor so I contacted him directly and asked if we could see it right then (it was about 9:30pm at that time) since my client was going out of town the next day.  He didn't have a key in the lockbox so we arranged to have him get a key there by 10am the next morning and I told him that if she liked it she would want to put in a contract right away.  He didn't live in the house but is local and agree to come over if I called to do a contract. I called my client and sent her the listing and she felt it was exactly what she was looking for.  We arranged to meet the next morning at the house at 10am. We got there at 10 the next morning and after checking out the house my client did feel it was what she wanted and I called the owner to come over to do the contract (I brought all the paperwork with me).  While we were waiting for the owner, another Realtor came through and I told her that we were going to put it under contract.  She replied that if the seller hasn't signed anything then it was still available and when the seller pulled up she walked right over to him and asked him if he had signed a contract yet.  He told her he hadn't but was not too thrilled about her doing that. We went inside and filled out the paperwork and while we were getting all the signatures done another Realtor came in with a client and was holding up paperwork saying she wanted to put in an offer.  The seller said that we were just finalizing a contract and that hers would have to be a backup - she turned around and left. We closed in mid-March and my client is thrilled with her new home. The reason I wrote about this here is to give an example of what can happen in this current market so you can see how important it is to be prepared with your financing early on and how you need to be able to move quickly when you find something you like, especially if it is something where you might have competition from other buyers.

NEXT: Helping a Homeowner Avoid Foreclosure

Preventing a Foreclosure in Safety Harbor

Table of Contents
Statistics and Graphs
Helping a Deserving Mother and Wife Get Her Dream Home
Another Homeowner Saved from Foreclosure
Dealing with a Tough Negotiation

I realize this is the second article about a home in Safety Harbor but since it is an important one I figured you wouldn't mind. I have a client who is in the military, as is her husband, and she found out last fall that she was going to be stationed in Kansas while her husband was going to have to remain here.  They would have to maintain their home here and she would have to rent a home in Kansas for her and her 4 children and would at the same time have a pay cut. They still owned their first home in Safety Harbor in addition to the one they were currently living in here and had been renting it out to cover their expenses related to that house, but they were running into problems with the renter and would not be able to afford to pay on that mortgage after she moved.  So she contacted her lender and had begun the process for doing a short sale. She had originally contacted another Realtor but did not get communication back from them in a timely manner, and sometimes not at all.  A family friend has been in town last September and worked with me and asked if I worked with short sales and when she found out I had special training on this she gave my number to the homeowner here who became my client. By the time you read this the closing will be done (or soon after) and the timeframe on this was not quite as fast as the other one I wrote about but that in part was due to the fact that this was a VA loan and in part because the first buyer cancelled after a few issues arose that he didn't want to deal with. We listed the house on December 4th, had it under contract on the 14th and I finally got the contract to the lender on 12/27 (there were some foul-ups in their system having to do with getting them the contract).  The lender ordered the appraisal the first week of Jan and it took until the last week of Jan to get it through all the reviews (it was a VA appraiser since it was a VA backed loan). During those weeks we were waiting on the appraisal we had to resolve an open permit issue, which did get handled just before the appraisal finished its full review process. The appraisal came back on 1/29 and I was contacted on 1/31 by the negotiator from the lender.  He informed me that the house appraised at $165,000 and the way it works on a VA short sale is that the VA sets a minimum net amount they have to receive in order to approve the short sale and that minimum net amount is approximately 85% of the appraised value. I had listed the home for $150,000 and the buyer's offer had been $135,000.  Based on the appraisal and the VA formula, the purchase price would have to be $155,000 to meet the minimum net to the VA.  The buyer agreed to raise their purchase price and we got a signed addendum about this completed by 2/5 and got the short sale approval letter from the lender the next day.  So from the time the house was listed to the time we got the approval from the lender it was 64 days, from the point where we had a contract is was 54 days but from the point where I was able to get the contract to the lender it was only 41 days and that included the 3 weeks it took for the VA appraisal and review. Unfortunately the buyer chose not to continue after finding out the air conditioner was 19 years old and on 2/14 informed us they were canceling. But then we got an offer in on 2/17 and went to contract on 2/18 with a buyer who knew the price was not negotiable and knew about the age of the air conditioner and other issues that came up in the inspection.  This was also a buyer who was getting financing and so time had to be allowed first to get another short sale approval letter for this buyer and then for the buyer's financing. Due to this particular lender's system it took a week before I could get them the new contract but from that point it only took 9 days to get the new approval letter.  I had told the buyer's agent that it would be quick and was upset that it had to take that long when we had already just had it approved with the different buyer, but the buyer's Realtor was still amazed that it got done that quickly. Now we are past all the inspections, financing steps and the closing is in less than 20 hours.  A lot more happened along the way than just what I wrote above (handling fights between the title company and buyer's lender, getting the buyer's lender to complete an action in time to get the short sale lender what they needed to allow us to close on time and getting yelled at for doing that, etc.) but in a few hours my client will no longer be burdened with a loan payment they can't afford or be worried about what to do to prevent this from being a foreclosure. From date listed to closing date: 125 days with first buyer cancelling after approval and inspections and second buyer having to get financing.

NEXT: A Successful but Tough Negotiation

Keeping a Negotiation Alive Until We Succeeded

Table of Contents
Statistics and Graphs
Helping a Deserving Mother and Wife Get Her Dream Home
Another Homeowner Saved from Foreclosure
Dealing with a Tough Negotiation

During the last 6 months I've done a lot of studying in the subject of negotiations and closing and had a real opportunity to put this new knowledge to good use. A client contacted me a couple of weeks ago about seeing some condos on Sand Key.  These were high-end condos in a very nice complex right on the beach.  We went right away to see them and one of the ones we saw was exactly right for them. We put in an offer the next day for the condo and everything in it based on what we could see would be the market value and that the owner had been trying unsuccessfully to sell it for about 6 years.  My clients were wonderful people and their offer price was set so that what they felt would be fair was about halfway between their offer price and the list price, with the assumption that this was about where the negotiations would end up. Unfortunately the seller was very difficult to work with and was even very hard on his Realtor who I've worked with before and is a very good Realtor.  Not only was the seller being difficult about the price negotiations, he also wanted us to add wording in the contract to 'protect' him in various ways but would conflict with my client's right as stated elsewhere in the contract. At one point along the way, the seller even told his agent 'we're done' and it looked like he wasn't willing to negotiate any further.  I utilized what I had learned and helped the other Realtor with suggestions on how to approach her client to keep things going and we were able to get past that point. My clients got quite frustrated with how things were going at several points along the way but they really did want this condo and I worked with them to help keep them in the negotiations, but always willing to let them end it if they really wanted to. After 4 days of frustrating negotiations and notification of another buyer about to put in an offer, I convinced my clients to change the strategy on the purchase and we submitted an offer for the condo without any furnishings at a price that we knew the seller would accept.  Then we just had to deal with the additional wording he wanted in the contract.  I was able to put the wording together in a way that would handle his concerns while still protecting my clients' rights in the contract and then we ran into difficulties in coordination of schedules since the seller was traveling for a vacation and couldn't be reached as easily.  We had one day left before my clients would withdraw from the deal and so I got the seller's Realtor to agree to have a conference call with her, the seller and me that next morning. We had the call and I was able to handle her client's concerns and he was satisfied with the wording I worked out.  He wanted one more document from his Realtor which she got to him shortly after our call and he then signed the contract.  Everyone else had given up on this at some point or another but I had to do everything I could to get my client the condo they really wanted and was willing to work through all the issues that were coming up and knew that if I found a way to somehow get everyone what they wanted and could help the other Realtor with her client that we could get it done - and we did. After we had a final signed contract I told my brother he can start calling me Harvey.  (If you have no clue what that means, I recommend you watch the first 2 seasons of the one the best shows on television - Suits.)

Table of Contents
Statistics and Graphs
Helping a Deserving Mother and Wife Get Her Dream Home
Another Homeowner Saved from Foreclosure
Dealing with a Tough Negotiation

Dunedin Real Estate Marks Swings to Seller's Market

If you were wondering whether it's a good time to sell or if it's still a good time to buy here, then this month's newsletter is going to help you with that.

Table of Contents Statistics and Graphs What It Takes to Buy Successfully Now What It Takes for Sellers to Sell Successfully Tips for Buyers and Sellers

Statistics and Graphs

February is a shorter month and is usually the 2nd lowest sale month of the year, just behind January.  Even so, this February was very strong again with nearly 20% higher sales than last February and a higher sales number than every January back through 2007.  This is now the 14th month in a row with sale higher than the same month in the previous year AND higher than the same month going back 6 years.  (Click on either chart below to see them full size.)

As a result, Inventory is back down below the 5 months supply mark (as of this date).

Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Feb 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service. What was interesting in February is that even though we had the highest number of new listings in a single month in almost 2 years, the number of properties for sale by the end of the month was less than it was in January. Of the 2038 new listings for residential properties in Pinellas County in February, 42 have already sold and 566 are under contract.  So almost 30% of the properties listed last month are no longer available and it's only 2 days into the new month. But even that doesn't give you a complete understanding of what's going on so now I'll tell you the rest of the story.

NEXT: What It Takes for Buyers to Get the Deal

Two Buyer Client Experiences

Table of Contents
Statistics and Graphs
What It Takes to Buy Successfully Now
What It Takes for Sellers to Sell Successfully
Tips for Buyers and Sellers

The first buyer has been looking for a house in the Palm Harbor area and a few weeks ago a new listing came to my attention on a Thursday afternoon (it had been just listed earlier that same day).  I sent the listing to my client and he liked what he saw but asked me to call the listing agent to find out how old the roof was and get back to him.  I called the agent and found out the age of the roof but she told me that they were expecting an offer in that evening.  I let my client know and he said he'd show it to his wife that evening and let me know in the morning if he wanted to put in an offer.

I told him I had a feeling it would go quickly.  The next morning I checked at about 8:30 am and it was under contract.

The second buyer was looking for a house in Safety Harbor and there wasn't really much at all available in her price range that fit what she wanted.  A few days ago I saw something come on the market at about 8:30 pm and called to see if we could get in to see the house that evening.  The lockbox wasn't on the house yet so I arranged a time the next morning to see it right after the lockbox would be put on the house and arranged to have the seller available to come over to sign a contract if my client liked it.  I got the paperwork ready for a possible contract and had the proof of funds for my client (cash purchase).

We arrived at 10 am and the house was exactly what my client had wanted to find.  I called to get the seller to come over and during the 30 minutes while we waited another agent came with a buyer.  I told them that we were just waiting for the seller to arrive to finalize a contract and the other agent asked "has he already accepted your offer?".  Right then the seller arrived and that other agent went right up to him and asked him the same question and then insisted on seeing the house.

I went in with the buyer and waited while the other agent showed the house and as soon as they left we started on the paperwork.  When asked about the price he said that a friend told him that he should try to get a bidding war going but he didn't want to do that and would accept a full price cash offer from my client.  He also said he had 7 calls already that morning about showing the house but that I was the only one that had called him the night before.

As we were completing the paperwork another agent came in with a buyer and told the seller that her client was ready to make an offer but the seller told her that we already had an agreement and that hers would have to be a backup.  She left in a huff.

We got the contract finalized and my client gave me the deposit check which I deposited at the title company that afternoon.  She was thrilled about the house and that we were able to get the contract on it despite the fact that there were people practically lining up to buy it.

These are both very recent experiences of 2 of my clients and I wanted to share these with you so that you have a better understanding of how you have to be prepared in this current market if you want to get a condo or house that you like.

Also, if you are ready to buy you should let me know so that I can set up a special MLS search that will let us know instantly when a new listing is entered into the MLS.  This was the only way I found the houses for these 2 clients as quickly as I did.

NEXT: What It Takes for Sellers to Sell Successfully

Two Seller Client Experiences  

Table of Contents
Statistics and Graphs
What It Takes to Buy Successfully Now
What It Takes for Sellers to Sell Successfully
Tips for Buyers and Sellers

The first client is in a short sale situation and we got their house under contract within 2 weeks of it being listed but the buyer's offer was $15,000 below the list price.  The loan that is being short-saled is a VA backed loan and the way a short sale works on this type of loan is that the VA has an appraisal done and then they will require that they net 88.13% of the appraised value - and there is no negotiating this.  When the appraised value came back the buyer had to come up $20,000 on the purchase price and they agreed to this.  However, after the inspections found that the air conditioner was 19 years old he canceled the deal.

I relisted the house and within 3 days we had it under contract with a new buyer at the higher price and with the buyer knowing upfront about not only the air conditioner but also any other issues that came up in the first buyer's inspection.  We're now waiting for the bank's approval of this new contract and should have it any day.

The reason I'm writing about this one is to give you some insight into how government backed loans often have less negotiating room than standard bank loans when it comes to short sales and that even with these issues it did not take long to get another qualified buyer.

The second client had his house under contract twice since last fall and both times the deal fell apart.  He had been trying to save money on the Realtor commission so he had been working with Realtors that did cut-rate commission deals.  After the 2 failures he asked me to help him and we will be listing the house in about 2 weeks.  I already went over 1 mistake related to how the house was priced previously which made perfect sense to him and which we will be correcting this time around.

I'll let you know how this turns out in next month's newsletter but I'm predicting that we will have the house under contract within no more than 10 days.

Even in a market like our current one you need to have a good Realtor involved who knows if a contract from a buyer is one to take or not and also when to try to salvage a deal and when it is in your best interest to end a deal and get another buyer that is more likely to close.  To be successful in selling your home or condo you have to price it correctly for your area, have it prepared to show before listing it and select a buyer that will be likely to close.

NEXT: Tips for Buyers and Sellers

 

 

 

 

 

Tips for Buyers and Sellers 

Table of Contents
Statistics and Graphs
What It Takes to Buy Successfully Now
What It Takes for Sellers to Sell Successfully
Tips for Buyers and Sellers

Both buyers and sellers need to be aware of the current market conditions in the overall area and in their specific area.  Some cities or neighborhoods may be in a very strong sellers market and require special techniques to get you  a home there (like I described about the experience of my Safety Harbor home buyer).  But then some neighborhoods or complexes may have a lot of properties for sale and require the right strategy to successfully sell. 

It's important to be given accurate and current information on the specific area, neighborhood, city or complex you are trying to buy or sell in to make sure that you are implementing the right plan.

Buyers absolutely need to have their finances for purchasing lined up and either a preapproval or proof of funds statement/letter at hand.  Without this you will have a much greater chance at missing out when you find the right home or condo.

Buyers also need to be aware that sellers are not as willing to come down as much on price - except when they have been having difficulty selling their property and/or it has been on the market for an extended period of time.  Even then you have to be prepared to act quickly because I have seen properties like that suddenly have more than one buyer express interest, and when that happens you will likely pay more than if you had gotten your offer in and accepted before another interested buyer came along.

Well-priced homes or condos in areas or complexes where there is a strong demand and little inventory - if you want it you should be prepared to pay close to or at the list price as long as it is reasonably priced.

Sellers need to have their properties in 'showing condition'.  This doesn't mean expensive upgrades but it does mean that the exterior and interior are clean and neat and issues that are distracting (stains on carpets) or may concern buyers (stains on ceilings from roof leaks, rotten wood on the exterior, etc.) are taken care of.

Goals need to be clearly defined for price and the timing of the sale and need to be reviewed against the current market conditions with your Realtor.

From my experience I've found that at least 50% of the success of sales comes from the preparation done prior to the listing going into the MLS and 40-50% comes from selecting the right buyer and handling things properly after you get a contract.

For an owner who is in mortgage trouble or is in a possible short sale situation, the key is having someone who is adequately trained to handle this type of sale properly.  I see way too many short sale listings being handled by an agent who does not have adequate training and which then unfortunately end up being foreclosed on.  If you or someone you know is in a situation like this, make sure to call me to find out what can and can't be done in your specific situation.

Dunedin Real Estate Update and Hope for Short Sales

This month, after reviewing the most recent statistics, I'm going to tell you how short sales can go when they are done right, and then I'm going to go over some info I've been gathering from clients about what they've found to be most important in choosing their Realtor.

Table of Contents Statistics and Graphs Short Sales - The Right Way What is Most Important in a Realtor

 

Statistics and Graphs

January is typically the lowest month of the year in regards to sales. You'll see that on the chart below. We've been on a very strong trend for a while now and in 2012 we had 12 straight months where sales were higher than the same month in all of the last 5 years. This trend has now continued into 2013.  As the chart shows, sales are still going strong and increasing each year.

As a consequence of the lower sales in January and an increase in listings after the holidays (from people wanting to wait until the holidays are over before listing or re-listing), the inventory statistic is typically at its highest point in January.  This is true again this January, as you'll see from the graph below, but each year this is getting lower and this year we are below any point in all of 2011.  Despite the increase in January, the inventory shows that we are still in the sellers market range and if we see the kind of decrease in inventory like we saw throughout last year, we will get into a definite shortage problem.

What this means for buyers is that it would be smart to act soon because the decreasing inventory will make it more difficult to find what you want due to less choices and you will be facing increasing prices.  For sellers, this means that it will be a good year to list your property, especially before some of the Dodd-Frank rules take effect which may make financing more difficult for buyers.

Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Jan 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

NEXT: Short Sales - The Right Way

Buyer and Seller Warnings for 2013 - What You Need to Know About Real Estate

I have been reviewing a lot of information the past month to get a better grasp of what the future may hold for both buyers and sellers and, in this month's newsletter, I'll share with you some of that information and point out specific issues that you need to be aware of when making your decision.

Table of Contents Statistics and Graphs Warnings for Buyers Warnings for Sellers Warnings If You Owe More Than Your Home or Condo is Worth

First, let's look at the statistics for last month as well as for the whole year of 2012.

Sales and Inventory Statistics

December tends to be a stronger month than November and the last 2 years were especially strong. I wasn't sure whether this year would be above the last 2 but once again we had another month in which sales were above all of the past 5 years in the same month. This makes 12 straight months in which this occurred.

As a result of this and the fact that less people will have their house listed between Thanksgiving and the New Year, inventory fell to another low - this time below 4 months. Inventory at this low level with sales continuing to be strong and prices showing increases all indicate a seller's market.

Taking a look back at the year in its entirety, sales in 2012 were up about 15% from 2011 and over 30% from 2010.  I was writing as far back as in Spring of 2009 that it appeared our local market started to turn around beginning in 2008 and this graph validates that:

Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Dec 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

These all show positive, continuing trends for our local market - but will they continue? What are the challenges that may be facing buyers and sellers in the next 2-3 years?

NEXT: Warnings for Buyers >>

Florida Real Estate 2013 Predictions

We're almost at the end of the year so I'll be reviewing our local real estate market statistics through last month and then will look at what 2013 might hold for us in the Clearwater and Clearwater Beach market and other areas nearby. But before that, I want to bring to your attention some changes happening on this site. I'm working on a complete revision of the site, but for now I have made some of the initial changes and want you to know about them. The Clearwater Beach Condos Complexes page has now been revised so that each complex that has its own page will show a + mark next to its name and by clicking on that you'll see a picture of the complex and a brief description, followed by the link to the page with the full description. In addition, I'll be revising the individual complex pages so that they have description of the complex, the amentities it has, plus their policies on pets and rentals. In addition, there will be a map at the bottom of each page where you can get info on the nearby restaurants and shoppings with ratings as well as the nearby schools. The first page I have done this on is for the Mandalay Beach Club so make sure to visit that page so you can see how all the pages will eventually look.

November 2012 Market Statistics

November is usually a slower sales month, in part due to the Thanksgiving holiday. This year showed barely any drop from October to November and the sales were higher than every November back through 2007 and they were also over 30% higher than just last November . We have now had 11 straight months where sales were higher than all 5 of the last years in the same month. Next month we'll find out if we were able to keep that going through the entire year.

Inventory went down last month, nearing the 4 months mark and stayed below 5 months for the 9th straight month - which reaffirms that we are in more of a seller's market.

Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Nov 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

By looking at these graphs you will probably be able to see why our market has been so strong lately. This market strength has resulted in an increase in prices, although not dramatic, and more challenges for buyers. But my experience this past year has given me insight into the best approaches for buyers or sellers so that they can be successful even with the market we currently have.

READ MORE What to look forward to in 2013 >

Foreclosures or Short Sales - Which is Better?

After going over last month's local market statistics I'm going to cover an area that has a lot of interest - Foreclosures vs. Short Sales - to give you a concise explanation of the differences between the two including the advantages and disadvantages for buyers and for sellers.

October 2012 Market Statistics

Last month was a surprising month statistically. Typically sales follow a similar trend each year where sales are lowest in Jan and Feb, peak during March through June, start declining from July through October and dip in November but then jump up in December. In 2009, 2010 and 2011 sales had a slight decrease from September to October but this year there was actually a significant increase in sales from September to October as you'll see in the chart below. In fact, not only was this October higher than any previous October back through 2007, but it was also 25% higher than the highest October in the past 5 years and about 30% higher than last October. This now makes the 10th consecutive month where the monthly sales were higher than the same month in all of the past 5 years!

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Oct 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service. Available inventory dropped a little last month to below 4.25 months even though there was an increase in the number of new listings in October as compared to September which is good. But for anyone concerned that there might be a bunch of properties that are sitting out there and waiting to come on the market which would then have adverse effects, even with the increase of new listings the sales were strong enough to make the overall inventory drop.

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Oct 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

Both of these charts reaffirm that the local real estate market here is still showing a strong improvement and has recovered quite well. Prices are still down significantly from the peak, but they have been showing some gains this year and if the sales continue to stay strong the prices should continue a steady, gradual increase.

Foreclosures vs. Short Sales

These both fall under the category of 'distressed property' sales even though there is quite a bit of difference between them.  In both cases the property will typically sell for less than what it would sell for as a normal or 'non-distressed' sale with the foreclosed property selling usually going for less than the short sale.  But what are the advantages and what are some of the pitfalls of each type.

Foreclosures

With a foreclosure, the lender has received a legal judgment and has taken all the legal steps to take back the property from the owner and is now the legal owner of the property.  The 'seller' is the bank/lender and the negotiations over purchasing the property is done with a representative of the bank/lender in their REO (Real Estate Owned) department. One advantage of a foreclosure over a short sale, from a buyer's perspective, is that the process is much faster since they already own the property and don't have to do all the work involved in approving a short sale.  Typically you can get a reply to an offer on a foreclosed property within 1-3 days and the bank/lender already knows what they are willing to accept. There are some disadvantages though. The first is that in many cases a foreclosed property will be in need of repairs and the bank/lender will provide no information on the condition of the property so you will have to rely on a home and termite inspection to find out what kind of repairs you may be looking at.  In my experience I have seen foreclosed homes where the repairs that would be needed are so high that what looked like a good deal and great price at first turned out to be a bad deal.  I have also seen issues such as termite damage and mold that were covered up so that even an inspection wouldn't find them (this is based on actual experience with a foreclosed property I saw with clients on 2 separate occasions several months apart). The second disadvantage is that in our current local market there is a shortage of properties available for sale in general and there is also a high demand for foreclosed properties from both investors and buyers who are purchasing for their own use.  So it is fairly common that when a foreclosed property comes on the market that is a good deal there are multiple buyers who want to get it that put in competing offers and then the bank/lender lets everyone know that they have to put in their 'highest and best' offer by a certain date and time.  This is more the exception than the rule now so the result of this is that prices for foreclosed properties are coming in higher than before and you will likely have to be prepared to pay cash since the bank will take a cash offer over one that involves financing even if the cash offer is lower.

Short Sales

A short sale is where the owner owes more in loans on the house that the amount a sale of the property can net after closing costs and commissions and they enter into a negotiation with the lender(s) to accept less than the full balance at closing.  This then involves each bank or lender that has loaned money to the owner and where the property secures that loan, and each has to agree to the short sale price and terms. An advantage of a short sale over a normal sale is that a buyer can often get the property for a better price.  An advantage of a short sale over a foreclosure is that in many cases the owner is still living in the property and has kept it up and can provide information about the condition of the property. The main disadvantage of buying a short sale property is that the process of getting the short sale approved by the lender(s) can sometimes be lengthy.  This depends on which lender(s) are involved, how many there are and the knowledge and experience of the listing agent.  A good listing agent who has adequate training in handling short sales can reduce the amount of time involved and increase the chances of success dramatically. In addition, all the large banks and many of the smaller lenders have been working to streamline their short sale process as they have determined that the short sale route is much better for them than the foreclosure sale route.  This is seen by the fact that the number of short sales have increased so much that they now outpace foreclosures and it is also seen by the fact that there are programs from all the major lenders, many smaller lenders and even a federal program that offers cash incentives to sellers to complete short sales.  Here is a chart showing how foreclosures used to outnumber short sales but that beginning in July of 2011 that has now reversed where short sales outnumber foreclosures:

 The advantage for a seller is that with a short sale they can avoid a foreclosure which has a much worse effect on their credit and in many cases have the balance of their loan forgiven. I have several resources with information about short sales including TampaShortSaleAgent.com as well as a page on this site with videos that have information on short sales. Hopefully this provides you with a better understanding of some of the differences between short sales and foreclosures that can help you decide whether you should consider those as a buyer.  If you have any other questions about these either as a buyer or a seller, please feel free to contact me and I'll do my best to help clear up any confusion or questions you may have.

How Much Will It Go For?

How Much Will It Go For?

This is probably one of the top 3 questions I get asked by both buyers and sellers.  In a market that is changing, like our Tampa Bay and Clearwater real estate market, this is an important question to get answered.  Although a lot depends on what the seller is willing to accept and what buyers are willing to pay - for the most part this number is determined by a correct comparison to comparable properties.  In a short sale situation, this can be even more important to determine so that the buyer isn't surprised by the lender requesting a much higher price than the buyer offered and so that the seller doesn't waste precious time accepting offers that will most likely be rejected by the bank.

I already have training in this area but by focusing more now on helping sellers in short sale situations I found that I needed to increase my level of training so that I understood the process by which a lender determines the value of a property when there is a short sale involved.  I have now completed this training and will share some info on this after discussing last month's sales and inventory statistics.

I'm also going to go over why any Florida residents should vote YES on Amendment 4 and how that will help anyone who owns a home, condo or townhouse in Florida.

September Sales and Inventory Statistics

September is generally a slower month than August and this year was no exception, but there was a more noticeable drop this year than in previous ones as you'll see in the chart below.

I don't know yet whether the larger drop was due to circumstances that affected sales in September, because July and August were much stronger than they typically are or because the lower inventory is now starting to affect sales.

But even so, September sales were above the sales in September for each of the past 5 years which now means that every month this year so far has been higher in sales than all of the last 5 years in the same month.  So trendwise our local market is still showing very good strength which should continue for the rest of the year.  (To see either chart below full sized, just click on it.)

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Sep 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Aug 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service. You can probably see that even with the sales being down from August and the month's inventory rising slightly that we still have a very low level of inventory.  I'll be doing my best over the next few months to help with this by adding listings  to the inventory, especially short sales where a home or condo owner needs a Certified Distressed Property Expert to help them.

What is it Worth/What Will it Sell For?

As a Realtor I cannot do an appraisal which is an official valuation of what a property will probably sell for and which is requested by a lender for financing purposes.  I can do a Comparative Market Analysis which is an informal valuation of what a property will probably sell for and also have training on how a Broker's Price Opinion (BPO) is done which is what a lender requests to determine the value of what a short sale property will probably sell for. What I've found is that sellers tend to think that their property is worth a certain value which is often higher that its actual market value and that buyers tend to think a property is worth less than its actual market value.  This is why there is usually a phase of negotiations necessary in most cases.  But in the current market which is more of a seller's market this can be even more pronounced and can have effects on both buyers and sellers. Sellers who have their property priced within a reasonable range of market value will most commonly see their property sell quickly while sellers whose property is priced too high will see it sit on the market for a much longer period of time.  This is not good because the longer a property sits on the market unsold, the more that potential buyers will start to assume that something must be wrong with it. Buyers who pursue properties where the seller is unrealistic about pricing will get frustrated and buyers who try to offer lowball offers on properties that are priced correctly will typically lose out to other buyers and in some cases miss out on a good deal. I recently went on a listing appointment with a seller who had previously tried to sell his home both on his own and through another Realtor.  After determining the market value of his home I could see that the problem was that he priced it at more than $100,000 above market value (for a house worth about $220,000).  When I met with him he insisted that he wouldn't sell for less than $300,000 and even after I went over all the comparable sales including one that sold 4 doors down from him in the previous month he wouldn't change his opinion of what his house was worth. He told me that there are cash buyers out there who would be willing to pay what he wants and he doesn't care what any Realtor says because he knows they 'just want to make a quick sale'.  I told him that I would not list his house because it would not sell for the price he wanted.  This is also a house I would never show a buyer because I already know that he is unrealistic about pricing and there is nothing exceptional about his property that could ever justify what he wanted to sell for. It is more important than ever that buyers and sellers have an accurate value placed on their property and this does require some work to get right.  The values that show up on sites like Zillow and Trulia may give a rough estimate of value but I've found that the accuracy on those sites are nowhere near what is needed and shouldn't be relied upon.   In fact there was a recent article about a study done which compared the info on Zillow and Trulia to the info in the MLS which is well worth reading:  Study: Trulia, Zillow less effective than Realtors So when you are ready to buy or when you are ready to sell (and especially if there is a potential you may have to do a short sale) get the assistance you need to make sure you know correct property values.  For client where I am their exclusive listing or buyer's agent I now provide a thorough property valuation report for properties that you want to put an offer in on as a buyer or for properties you want to list as a seller.

Vote YES on Amendment 4

The election in November will have a lot of effects and one issue will be directly related to Florida real estate including our local Clearwater and Tampa Bay real estate market. In Florida there is a ballot issue known as Amendment 4 that has to do with property assessed values and property taxes that deals both with current property owners in Florida as well as future property owners, both those who live here and those who will only have a vacation or second home or condo. I already have my ballot and have read through the information on Amendment 4 and recommend without any reservation that any Florida voter should vote YES for this Amendment. There are several things this amendment does that will be helpful:

• Does not allow the assessed value (value used for taxes) to rise if the market value goes down.
• If you have not owned a property in Florida in the last 3 years that had a homestead exemption and you buy a property which qualifies for one (or you bought one this year) you can get an additional exemption of 50% of the property's 'just value' as determined by the property appraiser's office.  This additional exemption is phased out over 5 years.  (Bottom line - big decrease in your property tax.)
• Reduces the assessed value increase cap for non-homesteaded properties from 10% to 5%.  If you own a property here that is not your primary residence, the current law has a 10% cap for increases on the value used for taxing your home.  This means that if the value of that property goes up 15% in a year, the maximum amount that the value used for taxes will only go up 10%.  Amendment 4 will reduce that to a maximum of 5% per year.  For primary residences the cap is now 3% so this will make it more attractive for buyers of second and vacation homes or condos, and for investors, to buy real estate here and will help the market overall.
• Prevents the cap passed in 2008 on properties that are vacation or second homes or condos (non-homesteaded properties) from expiring in 2019 (there was a repeal of this scheduled to take effect in 2019).

If you are a Florida resident and will be voting in November, make sure to read over the information on Amendment 4 yourself and make up your own mind.  The critics are mostly people in local government positions that are concerned about a reduction in revenue.

Dunedin Short Sales Update

Dunedin Short Sales Update

Short sales, whether you love them or hate them there is a big push right now to make them work better and get completed faster since they are a big part of the real estate market and will continue to be for several years.  This month's newsletter takes a new look at short sales and how to make them more effective and less painful for sellers and buyers.

But before going into that, let's take a look and how the market did last month.

Typically the trend each year shows the lows in January and February with a noticeable increase from March through June and then a gradual weakening from July through November.  August typically is a month with sales that are slightly lower than July (4 out of the 5 previous years) and at least 10% lower than June (5 out of the 5 previous years).  This year was very unusual because August was not only higher than July but it was also nearly even with June and it was more than 20% higher than last August.

The trend has continued since the beginning of this year with each month's sales being higher than the same month in all of the past 5 years, and the past 6 months including August are now the top 6 months since 2006.  This continues to demonstrate the strength of our local market and that buyer demand is not weakening in any way.

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Aug 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

The other statistics I've been showing each month is the 'months inventory' statistics which shows the amount of property available to purchase based on how long the current amount of property for sale would take to be completely sold at the current rate of sale.  This is important because when there is too much for sale, it takes longer to sell and prices drop and you have more of a buyer's market.  When you are around 6 months inventory  the market is considered more of a neutral market and when you start getting below that you will see properties sell faster and prices start to rise and it is then considered more of a seller's market.

We went below the 6 month mark beginning in March of this year and have actually been at about 4.5 months or below since then.  In August this fell to its lowest point since 2006 with only 4.0 months of inventory on the market.

 

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Aug 2012. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.

This is affecting both buyers and sellers.  Buyers are finding that there is less available and that the really nice homes and condos that are priced reasonably will sell quickly.  Sellers are finding that prices are increasing some and that in some cases they get multiple offers.  However, even with all that occurring buyers for the most part are not willing to pay much above the market value of  a property.  So it is even more important now for both buyers and sellers to get help in determining where the actual market value is for a home or condo.

A New Role for Short Sales

Banks are moving more toward doing short sales than foreclosures now for many reasons and with so many home and condo owners falling behind on mortgage payments (nearly 1 in 6 nationwide) there will very likely be more and more short sales for the next several years.

Because of this, most major lenders have been worked to become more efficient at processing short sales and several have streamlined programs now which, in some cases, will allow for an approval of short sale terms even prior to getting any offers.  In addition, some lenders are offering buyer relocation incentives of several thousand and up to $30-$40K upon the successful completion of a short sale depending on the specific circumstances and qualifications of the home or condo owner.  There are also federal programs that have buyer relocation incentives of up to $3000 that some home and condo owners will qualify for if their bank doesn't offer its own program.  And there are incentives under this federal program for lenders to do short sales rather than foreclosures if the home or condo owner meets certain criteria.

The overall push is to help get home and condo owners who are struggling with a mortgage they truly can't afford so that they are able to get out from under this burden and to do so in a way that:  1) the home or condo owner has less harmful effects, 2) there are less foreclosures and empty homes and condos which not only drop property values for others in the same community but also create hazards which come from an empty property which is not being maintained and 3) gives the major lenders a way to deal with the large number of potential foreclosures with less overall losses.

The biggest problems I've run into when working with buyers on trying to purchase a short sale property is that they can take a very long time to get a reply from the lender and in some cases we find out months later that the short sale is not approved because the owner wasn't qualified to do a short sale.  Both my clients and I have been through quite a few frustrating deals and it appeared that short sales were best to be avoided.

However, last month I decided that since the number of short sales are increasing as compared to foreclosures and that since they will likely be a part of the overall real estate market for several years, I should try to find out if there was a way to be more effective in handling them.

After doing much research I found out that I needed to know everything I could find out about how to do a short sale in a way that would get the fastest response from the lender and have the highest chance of being successful.  To do this I had to learn how to list a short sale and work with the lenders in the way that would get them to get their part done the fastest.

I found that the most recognized training for this was for the Certified Distressed Property Expert® designation and I recently completed this extensive training and am enrolled in their ongoing, monthly Advanced training as well so as to keep current on any changes with procedures and lender programs.

I have been successful in the past as a listing agent for short sales, including one of the most difficult short sales that you could imagine, but now I know the ins and outs of how to really determine whether a home or condo owner can qualify for a short sale (and for any of the incentive programs) as well as the exact steps that need to be done to ensure that the short sale will get processed in the fastest time possible.

What I learned from this is that in most cases the difficulty in getting a short sale approval (including the lengthy time frame) is mostly due to the listing agent either not knowing or not doing the steps of the process exactly how they need to be done.  This doesn't mean that these agents are bad agents, they just don't have adequate training to know how they need to handle this correctly.

With this training under my belt I will now be doing a lot more listings than in the past (both short sales and regular sales) as there are a lot of people who are facing a possible foreclosure who just don't know what to do and really don't need to get foreclosed upon - they need some help from someone who knows what can be done.  This will not only help these home and condo owners but will also help get more properties on the market to help meet the buyer demand.

The other benefit from this training is that it helps me understand how to better help my buyer clients and how to determine which short sales are worth pursuing and which are not.

To provide more information about foreclosures and the options home and condo owners have to them, including short sales, I have put together a new site with a lot of good information including videos and a whole bunch of really good reports.  I highly recommend you visit it and look through the information since it may be helpful and timely for you or someone you know.

The site is TampaShortSaleAgent.com.

I'll keep you updated on this area in future newsletters including news and info about changes to laws, bank programs, etc.

I hope you had a great summer and that you fall will be just as good. If you or someone you know could use my help in either buyer or selling, don't hesitate to contact me.

Sincerely,

Ron

Which Dunedin Homes or Condos Do Buyers Most Want?

In this month's newsletter, after reviewing the market conditions and statistics, I thought I'd list the top 3 items that make a property one that has a good chance to sell quickly and for a good price.  I'll also let you know about a new feature on one of my sites that I think you'll really like. Market conditions in July did not change much - sales were very strong and inventory falls again.  Sales in July were about 16% higher than last July, over 60% higher than July 2010, was the highest July in the last 6 years and makes the 7th straight month in 2012 with sales higher than the same month in the previous 5 years.  When you see the chart below you'll see what I mean. (You can see the chart full sized by clicking it.)

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru July 2012. The inventory level dropped to a new low - as of 8/1/12 there were only 5886 residential properties (condos, townhouses and single family homes) listed for Pinellas County in our MLS.  To give you some perspective on this, last August 1st the total was 8474 and on January 1st 2011 the total was 11087.   So we are down nearly 50% from last January and over 30% from exactly 1 year ago at this time. Because of this and the continued strong sales, we are still hovering at just a hair over 4 months inventory.

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru July 2012. If you enjoy seeing these types of statistics charts, you should make sure to check out a post I did earlier this month with a link to a whole bunch of statistics graphs that really show you all the statistics for the real estate market in Florida which will give you an even better understanding of market conditions in the state. Now I'd like to describe those items that are most important in making a home or condo really sellable.  This is valuable information for sellers but it is also good for buyers to know because this will let you know if a home or condo you have interest in will be more likely to sell quickly and what kind of negotiating room you might have.

Location

This is considered the prime factor in real estate.  A less expensive home in a higher end neighborhood is a better buy than the nicest home in a lower end neighborhood because its value it brought up by the surrounding properties whereas the biggest, nicest home in the community tends to have its value brought down by the surrounding properties. For sellers, there isn't much you can do about this but for buyers this is an important factor to consider as it will affect you in the future when you will be selling the property. For buyers, if you do have a good or unique location, this will give you an advantage and will also help you get a higher price. For example, I recently worked with a client who was looking at condos on Sand Key.  In some complexes where only a small number of the condos are directly on the beach, those condos are considered a prime location and we found that they did not come up for sale very often.  The one we put an offer in on not only had our offer but another one just before us and this was after the property had only been on the market for 2 days.  This would be considered a unique location because in the buildings in this complex only 1 out of 6 condos on each floor has this location and there are very few of these that have been available in the last 5-6 years.

Condition

The condition of the home or condo will determine how quickly it sells and how close the sale price is to the list price (but only if the price is not too far above market value). After working with hundreds of buyers I can say without any hesitation that homes or condos that show really well and are priced reasonably are the fastest selling properties.  This includes not only updated interiors and well-kept grounds, but well-maintained properties.  A home or condo that has granite countertops and hardwood floors but at the same time has obviously been neglected in other ways (wood rot on the outside, dirt on the ceilings near the A/C grates from old filters, very old roofs or air conditioning systems, etc.) will have a harder time selling because buyers are less likely to buy a home that shows these signs of neglect are a sign that there may be more problems that you don't see.  I can tell you that a home without as many upgrades but that is immaculately maintained will get a lot of interest. Sellers often don't know what they should and shouldn't do to get their home or condo ready for sale and I usually help my clients with a list of the best, lowest-cost items to work on to get their house in the best condition to sell.  I even wrote a post that links to an article about getting your home or condo ready to sell.

Price

I left this one for last because, even though it is very important, it is not the only item that affect a properties ability to sell quickly and for a good price. Buyers want to pay the lowest possible price and sellers want to get the highest possible price.  But the optimum price is the one that results in a deal that successfully closes with both the buyer and seller happy with the price. With inventory being so low, sellers are getting better prices which are closer to the listing price and buyers are willing to pay more although they still do not want to pay more than market value in most cases and still want to feel that they got their property for a good price. As a buyer, when looking at the price you will need to know what the market value of the property is and should keep in mind that if a property is in a good location and is in very good condition and is priced close to market value - it will likely sell quickly and at close to its list price.  If you don't recognize this and take too long haggling over price, you may find yourself competing with other buyers and may end up paying more or losing the property to the other buyer. As a seller, you need to know what a realistic sale price is for your property and not get too greedy or you may find your home or condo languishing on the market for many months. I saw this firsthand in the last several months with my client who was looking to buy a Clearwater Beach condo. We were negotiating on 3 condos (not at the same time of course) where the seller was dragging things out trying to get a better price and during that time my client realized that 2 of these condos were less than what he wanted as far as condition and/or location was concerned.  In one of these cases the seller had their agent come back to us after we moved on to say they would now accept our initial offer price - that condo is still on the market a month later.  In fact all 3 of these condos are still on the market. All the condos we had seen that my client showed interest in but were priced too high or had sellers that were trying to get more than their condo really was worth are still on the market.  The one condo that I mentioned above that was directly on the beach and went under contract in 3 days - the seller came down more in price than all the other ones which are still sitting unsold.  That seller and their agent recognized the value of their unique location but also were reasonable in their negotiations and so that condo sold very quickly and at a good price. In the current market it is even more important that you have a good Realtor to work with as either a seller or buyer to make sure you find out what a property is worth and how its pricing will affect how quickly it will sell.

New Tool

I've put a new tool on the Clearwater Beach Condo Complexes page of my Clearwater Beach Condos for Sale site that I think you'll like.  This tool will let you see businesses (grocery stores, restaurants, gas stations, hospitals etc.) and schools within a 5-7 mile radius of Clearwater Beach plus useful information on the schools and businesses:

    

 

Here is a sample of the type of information you get to see on local businesses.

If you like this feature and would like to see it on the pages for other cities and communities, please let me know .

Have a great summer, stay cool and enjoy yourself, and let me know how I can help you as either a buyer or seller in this interesting market.

Sincerely,
Ron

4 of the Highest Monthly Sales This Year Since 2006

This month after going over June's statistics I'll let you know about the time I've spent the past few weeks on Clearwater Beach, Sand Key and Island Estates and what I've learned from this and share with you the pictures I took during this time. June was the 4th straight month with highest sales in the local Pinellas County residential real estate market and is actually the highest sales month since 2006.  Since 2006, the 4 highest sales months for residential property in Pinellas County in order is 1. June 2012, 2. April 2012, 3. March 2012 and May 2012.  And as you'll see in the chart below increase over 2011 and 2011 isn't just a few - it's from 3% to 13% higher. (Click the chart to see it full size.)

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru June 2012.

The other statistic I've been writing about the past several months is Inventory, and with the strong sales in June it has also fallen to its lowest level since 2005-2006 and is now getting into a range where it is in a category of a seller's market. (Click the chart to see full size.)

Information for chart above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru June 2012.

In several of the past month's newsletter and in additional articles I have posted on this blog over the past few month's I've presented how the increasing sales and decreasing inventory is affecting buyers and sellers in the market and over the past couple of weeks got even more direct exposure to this while working with a client who was looking at buying a condo in one of the 3 Clearwater Beach areas.

I wrote a more detailed post, Clearwater Beach Condos Hunt, and can update that now because just a few hours ago we finally got a condo under contract on Sand Key.  Here's the view from the living room through the sliders to the patio and the view across the street of the Gulf:

It was definitely worth the work involved!

The article that the link in the paragraph above takes you to will give you a more complete description of what I've found that buyers and sellers should know and so when you have time you might want to read it, but the bottom line is that well-priced properties that show well can sell very quickly and very close to their asking price with multiple offers coming in and properties, even nice ones, that are priced too far above market value won't sell as quickly.  So the bottom line it that there is a tremendous opportunity right now for both buyers and sellers but it is even more important to get proper guidance on determining the market value for a property.

I also took quite a few pictures to share with you and if you'd like to see them you can go over to my Facebook Page or the post on my Clearwater Beach Condos for Sale site where I posted them.

Hope you are having a nice summer and I look forward to seeing you here soon and helping you with buying or selling successfully.

Sincerely, Ron

Is the Timing Right to Purchase a Dunedin Home or Condo?

This month I'm going to go over the reasons why it may, or may not be, a good time for you to buy or to sell a condo, townhouse or home in Florida right now.  But first, let's look at how the market here did in May.

Last month I wasn't so certain that the strong sales we'd been seeing would keep up at the same pace it had been but once again I was pleasantly surprised to see that the strength in our local market is continuing.

Now that the final figures are in we can see that May saw a nice increase over last May (and over each May back through 2007) and is up in the range of March and April which were the 2 highest months since 2006.

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

If you want to see a full size version of the chart just click on it, and check back in about a week to see the final numbers.

As I mentioned in last month's newsletter, the strong sales has been affecting the overall inventory available for sale and in March and April we had a 4-5 month supply of inventory.  May's inventory is not only in that same range but is even lower than either of those 2 months.

A 4-5 month inventory supply is considered to be in or moving into a seller's market and as a result there is much more competition for those properties in high demand.  This doesn't mean that every type of property will have high demand and multiple, competitive offers - there are some areas and types of properties where there is still a higher supply and less demand and these tend to be a little more difficult to sell and require more in the way of price adjustments.

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

So overall, May continued the trend in sales that has been going on since at least last November and the trend in inventory has continued since it began last March.  Prices are starting to rise some for those areas and properties that have a strong demand while those in areas or complexes with high supply and lower demand are not yet seeing much of an increase.

What This Means for Buyers

As a buyer, you will need to determine if it is the right time for you (depending on your personal circumstances) to be buying.  If you are in a position to buy and just haven't been sure if you should wait or not, you should consider that the current trends here indicate that by waiting you will have less selection and will see increased prices the more you wait.  I don't think we'll see dramatic price increases like we saw during the boom years but I am noticing that prices are definitely up from where they were this time last year and there are more instances of multiple offers and sales prices above the list price than we have seen for nearly 5-6 years.

If you do decide that it is a good time for you to buy, you will need to be prepared as a buyer for the way the current market works.  It is vital that you have the financial aspect of your purchase worked out, whether you'll be paying cash or getting financing.  You will not be able to make an offer if you don't have proof of funds for a cash purchase or a pre-approval letter for financing, and taking the time to work this out after you've found a house or condo you want to buy may allow time for another buyer to come along and secure a contract, or put you in a position where you are having to outbid them.  This is especially true for those properties that are priced well.

The other thing you need to do as a buyer to be successful is to get things done quickly.  I can't tell you how many offers I've had accepted because the listing agent knew they could have confidence that both me and my buyer client would follow through with what we said we would do - including getting them the needed paperwork quickly.  In a market such as this one where there may be more than one potential buyer, the agent who represents the seller (and the seller themselves) will sometimes find themselves in a position where they have to make a decision about which buyer's offer to choose.  In some cases it all comes down to the price offered, but in a lot of cases it hinges on which buyer's agent (and buyer) they feel most confident with and that they feel they can count on to get to a successful closing.

There is a lot I've learned over the years about what to do to make sure that my client is chosen as the buyer that the seller and their agent want to go with - but a lot of that depends on how you perform the tasks that are required of you.

What This Means for Sellers

You may have a house, condo or townhouse here that you've contemplated selling and are wondering whether you should sell now or wait.  A lot of owners are in that very same situation.  Whether it is a good time for you to sell now or not depends on a lot of factors.

Your personal financial situation is one of these factors.  If you have a loan on your property and are underwater and need to sell, you really shouldn't hesitate at this time due to a few reasons.

First is the fact that there is a  law that allows you to avoid having to pay taxes on any portion of your loan that your lender writes off when you sell in a short sale.  This law is set to expire at the end of this year and we don't know whether or not it will be renewed.  So if you wait too long and the law expires, you will have to pay taxes on any portion of your loan that your bank forgives.

Second is the fact that some lenders are actually helping people with underwater loans with their moving expenses.  These particular lenders will pay a borrower $5000 and up to $25,000 upon the completion of a successful short sale.  So if you had a hesitancy of selling in a short sale situation due to possible moving expenses, it would be wise to find out where you stand. Third is the state of the current market here.  Right now sales are strong, demand is high and supply is low for many types of properties in many areas.  Hopefully this will continue but it doesn't make sense to possibly miss out on selling in a strong market.

Another factor that should be looked at when deciding whether to sell now or not is the supply and demand for your type of property and in your area.  I recently had a client ask what the market was like for the condo complex they had bought in and unfortunately there were a good number of condos for sale in that complex with a small number of sales.  So right now wouldn't be the best time for them to sell and they aren't in a rush so they are going to wait.  However, there are certain types of properties and in certain areas where there is a strong demand with only a small inventory - and in that case it does make sense to look at selling now.

I can help you here by looking at what the current situation is for your home, condo or townhouse and your area.  You need to have as much information as possible to make your decision but if you want to sell and have been waiting for the right time, it wouldn't be a bad idea to find out whether now is the right time or not.

That's probably enough for now, but I thought I should at least try to give you a way to view the current market and how it might affect your buying and selling goals.

Please feel free to contact me for help with either of these areas and I look forward to seeing you soon.

Sincerely,
Ron

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