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!
