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!

I received an e-newsletter that revealed more details from the IRS.  You might find the tax information interesting.

Here’s an excerpt from Issue Number: IR-2009-027

“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

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

The February 2009 Pinellas Board statistics show continued settling in the local single family homes market. This is the fifth  or maybe sixth consecutive month of trend data to suggest that we are seeing the infamous “soft landing” in Pinellas County (Since September/October 2008).

It now appears that July/August 2008 may have marked the turning point for residential single-family home sales and inventory absorption.  The average rate of absorption over the last eight months is 5.88% of the available monthly inventory.  This equates to just under 17 months of supply (we’ve been as high as 26 months). 

During a normal housing cycle the average supply of homes hover around 5-7 months of supply.  As you know, this oversupply is directly related to the exisiting inventory of bank-owned and pre-foreclosure inventory.

Bottom-Line:  Six month trend shows consistent improvement in 2009 sales over 2008 sales (Month over Month comparison for the period September 2008 to February 2009).

The February 2009 release shows a rebound from the low in median sales price of $125,000 to approximately $139,000.  This rebound is significant to the soft landing in the local market.  Over the last 5-6 months, the median sales price has fallen considerably from $165,000 to $125,000.  However, on the good side, the rebound shows that price stabilization is clearly a function of the shadow inventory market.

In January, I commented on the data indicating a soft return to a normal market versus the exagerated buyer’s market we’ve been experiencing.  I do see the influences of the stimulus bill and housing initiatives proving the theory that prices must stop falling before inventory can be controlled.  Clearly, this is what we are going through and as long as the foreclosure shadow inventory remains a shadow, then the market will equalize and begin chipping away at the return.

Recently, investor groups from China and other areas of the US have become interested in the foreclosure inventory.  Continued activity by these investors support the longer term woop-de-doo effects of the Pinellas real estate marketplace as we go through the supply.

The next good sign is that $8000 tax credit is getting its share of the spotlight, locally.  The effect of this stimulus should keep the first time homebuyer sales volume rolling throughout summer of 2009 and up to the December 31, 2009 deadline to purchase. 

I am seeing some interest in the move-up category which may be the brightest spot in the market at this time.  As the sales cycle continues to reward lower mean price ranges, the move-up categories will become quite appealing.  We’ll keep close watch for this trend in Pinellas single family homes in the next report.

Late summer is still 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?  We should as long as the loan modifications and owner refinances remain center stage.  While national trends have some effect on the local market, we may just be in a leading market providing the summer trend is strong.

Pinellas single family market is in what feels like a controlled and steady climb back to normal inventory (around 6-7 months worth).   Breaking the double-digit (10 Months or more) inventory plateau will be Party Time for Pinellas Real Estate Inventory.  Just remember, it was three short years ago when we had 1 Month supply numbers?!?!?

Make no mistake, sales are better than good for our recovering market!  The best news today is that we continue to improve in the residential single family market.  And, with that news, buyers will feel more confident to take advantage of the historic home affordability (Interest Rates and Prices). 

March 2009 will probably show a slight dip (no worries) with anticipation by the buyers for the big release in April 2009 and beyond.  It may just be like a rubber band start to the race for the best of the lowest priced home to buy this summer! 

The difficult part is to accurately predict when interest will begin there climb…stay tuned for that update.  I’m for a six month freeze in interest rates to help qualified buyer’s buy at the best price and lowest payment possible! 

Nothing to report on the local Condo market except Pinellas county median sales price for Condos hit another all-time low of approximately $117,500 and January/February 2009 may prove to be the July/August 2008 that occured in the single family sector.

Best wishes!