Clearwater Real Estate

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!

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