Clearwater Real Estate

Specifically on Single Family Homes in Pinellas County (My Opinion):

Through April 2009, the Pinellas Board statistics show improved sales and pending statistics in the local single family homes market as well as the condominium market.

This is the seventh consecutive month of trend data for single family market to suggest that the market is continuing its response to consistent sales data and favorable interest rates in Pinellas County.

Since last month’s opinion, we see sales (closings) increase at another 5.2% during April 2009 over March 2009.  Total sales in April, including an expected increase in Condo activity showed more inroads to the local single family and condo inventories.  

The rate of absorption for single family homes for the month of March was 8.48% of the available monthly inventory.  This equates to 11.79 months of supply compared to 13.05 months of supply in March (we’ve been as high as 26 months).   We seeing dramatic change in the inventory available to all categories of buyers.  Moreover, the three-month rolling average for absorption for the months February  through April 2008 versus February through April 2009 shows a 38% positive change.  This indicates continued steam for the late summer bottom many seem to be pointing toward.

As I mentioned last month, the trend in absorption is cautiously supporting a sub-ten month supply range.  We are closing the gap with one eye on the shadow inventory.  A market inventory over 7 months of supply is the tipping point for normal market conditions.  We are now in striking distance to a local market bottom.  By September, this trend will be help us document the local housing recovery.  Investor participation is becoming more apparent to the practioners, locally. 

There is greater interest by New York, New Jersey, Illinois,California, Ohio and Pennsylvania vacation/second home buyers last month than in recent past.  Investor camps are actively reviewing and making offers in the local markets which is saving us from the shadow market influence that areas of California are seeing this year.  We may with the Notheast migration, avert the impact of Alt-A defaults that was predicted to upstage the original sub-prime effect two years ago.

Bottom-Line:  The trend continues to support an improving market in 2009.  Bracketing 3-month and 6-month rolling inventory and absorption is supportive for the single family segment and showing first glimpse of condominium trend setting.

The April 2009 release improved slightly to a median sales price of $144,000.  This is not indicative of anything except for a short term resistance.  I continue to be optimistic on the price bottoms until inventory has any fundamental change against the stability it has shown this year.  Remember, as inventory falls, prices stabilize.  As inventory increases, prices receive pressure.  The recovery clearly shows that price stabilization is a function of the shadow inventory market remaining in check and interest rates of recent time.

Last month I mentioned that late summer remains the benchmark to really evaluate the true trends of the season and that you may see better negotiating early in the summer before the positive trend is publicized. This seems to have held true.  The national media is in agreement that sales are better and that housing will lead us out of the economic downturn.  Recovery is dependant on a healthy housing market and new development.  Florida is currently under pressure to relax when it comes to inspiring developers to get back in the game.  Recent Florida legislation could help make it easier for new home construction to begin permitting this year. 

Will we see continued strength and confidence in the Pinellas market? 

Sure.  It will be some time before employers begin expansion and productivity will return as the housing market cycles through 2009.  We should see part-time agents resume marketing and showing fulltime by years-end.  As the Northeast U.S. gets well, we will see that inflow migration boost late this year and more likely early 2010.

I maintain that we will see that much needed marking second quarter in Pinellas single family homes sales.

There is good solid reasons for being optimistic for this summer selling season.  The buyer confidence is increasing and with the usual hike in gas prices for summer, the peception of the possibility of inflation is real.  Interest rates will not remain at historic lows, forever…nor will prices as inventory disapates!

Best wishes!

Specifically on Single Family Homes in Pinellas County (My Opinion):

Through March 2009, the Pinellas Board statistics show continued stability in the local single family homes market. This is the sixth consecutive month of trend data to suggest that the market is responding to consistent good news about the local real estate market in Pinellas County.

Since last month’s opinion, we see sales (closings) increase at a nice clip during March over February.  The total sales in March, including a nice unexpected bump in Condo activity showed clear decreases in single family and condo inventory.   The rate of absorption for single family homes for the month of March was 7.66% of the available monthly inventory.  This equates to 13.05 months of supply (we’ve been as high as 26 months).   What is significant about this reporting period and the 7.66% rate of monthly absorption is that it was the highest rate in the last twelve months.  Moreover, the three-month rolling average for absorption for the months Jan through March 2008 versus January through March 2009 shows a 37% positive change. 

Now, if this trend in absorption continues through the second quarter, we should see inventory approach the 10-11 month supply range.  As I said in last month’s opinion, the inventory over 7 months of supply is the tipping point for normal market conditions.  10-11 month supply ranges will put the market in striking distance to a bottom effect that is being reported, nationally.  By September, the trend will be clearer and with a continued eye on shadow inventory (the foreclosures yet to surface in the market) the refinance programs, loan modification programs and investor participation is critical to the real estate turnaround in Pinellas County.

Bottom-Line:  Six month trend continues to support an improving market in 2009.  Bracketing 3-month and 6-month rolling inventory and absorption is supportive for the single family segment.

The March 2009 release is unchanged in median sales price of $140,000.  This is not indicative of anything except for a short term resistance.  I would not read much into price bottoms unless inventory continues on existing stable trend.  Remember, as inventory falls, prices stabilize.  As inventory increases, prices receive pressure.  The recovery clearly shows that price stabilization is a function of the shadow inventory market remaining in check.

More investor groups are being reported to looking in the Tampa Bay area for the best deals this spring.  This is a another good sign as we hope to see the shadow inventory reduced by some bulk investor buying and a better understanding of how the lenders’ intend on handling future inventory pushes.  On a side note, the relaxed “mark to market” rulings this month could have some impact on slower inventory releases this summer. 

Continued interest in the move-up category will take a little longer to take hold and the interest rate freeze around 5.00% or below will keep this significant segment moving positively.

Late summer remains the benchmark to really evaluate the true trends of the season and you may see better negotiating early in the summer than late as the trend will be more publicized. 

Will we see continued strength and confidence in the Pinellas market? 

Considering the data trends for the last eight months, we should continue to remain optimistic through summer as the long winter and northeast states threaten higher tax bases, Florida looks good for a boost in inflow migration this summer!

It is always best to be wrong when you anticipate a dip in sales or absorption.  Last month I felt that there would be a lag between good April 2009 sales.  Easter came early for the Pinellas home sales market and with steady pending sales indicators, we should anticipate a much needed marking second quarter in Pinellas single family homes sales.

I’m still lobbying for the six month freeze in interest rates to help qualified buyer’s buy at the best price and lowest payment possible! 

The local Condo market showed an increase in sales year-over- year and the most significant sales increase for a same month/prior year comparison in over a year of reporting.  As reported, January and February 2009 may have marked the turn for Condos.  We’ll have to see this develop a little further into the quarter.

Best wishes!

The seasonal ban on foreclosures by Fannie Mae and Freddie Mac has been lifted as of March 31, 2009.  It was a temporary measure to allow for the government interventions to take hold, allow for families to remain in homes during the holidays and give the markets time to level.  The governmental action seems to have worked.

Inventories in the Tampa Bay area did reveal some leveling and confidence in an apparent normal sales pattern for the area.  The future of the market will be determined mostly by a good spring and summer sell off and continued monitorng of the Alt-A default inventory build up.  It would not be unreasonable to see another stay at the end of 2009 which would continue with the soft landing theory of 2007, 2008, 2009 and 2010.

This is a good test time for the government to see if all the assistance is enough to bring us out of the trough and clearly into recovery.   Buyers will appreciate the last of the good inventory this summer as well as the best affordability indexes of our time.

The Pinellas market statistics come out this week and I’ll look at those numbers in detail along with the Case Shiller numbers from last week.  I anticipate a difference of opinion between what CS has reported and what we are seeing locally regarding price declines.  We’ll see.

The good news is that we have seen a lot of activity in showings over the last 10 days and that always leads to less inventory available to good buyers.