I never worry about the future. It comes soon enough.
Author: Albert Einstein
Market Conditions Report
The State of the Pinellas County Real Estate Market
By Elliot Wagner, Prudential Gower Realty, Dec 2, 2008
Prices will continue to fall but at a less drastic rate through 2009. It will be a difficult year for sellers, but will offer buyers previously unseen opportunities.
Sales of existing-home will increase due to lower prices and mortgage rates. Mortgage defaults will be high as unemployment reaches historic levels and adjustable mortgages reset.
The term "Short Sales" will become a household phrase. Sellers unable to stay current with their mortgages will attempt to sell their property at a market price, frequently below the outstanding mortgage balance. It is negotiated sale with the lender agreeing to settle the mortgage at a reduced amount as an alternative to foreclosure. The bank is taking a loss or coming up "short."
Click here for: Pinellas County October 2008 Market Statistics
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The State of the Current Economic Crisis Our economy continues to deteriorate and we may be seeing the worst recession since the great depression. This downturn will be deep and prolonged. Capital expenditures and consumer spending are in steep declines. Auto buying plans have dramatically dropped and home-buying plans fell to their lowest level since the 1982 recession. Consumer plans to buy a major appliance fell to a 14-year low, spending on discretionary items collapsed and even spending on classic staples such as groceries and toiletries are down. This is a period of unprecedented consumer retrenchment. Housing Market The housing market is nowhere close to bottoming out. New home sales are at the worst level since the 1982 recession. Builders are not curbing enough production; feeding unsold inventories to levels worse than the early 1990's real estate meltdown. The inventory of unsold new homes sits at one of the highest levels in the past three decades and mortgage approvals for new home purchases are at a nine years low. In the past 3 years, the median sales price for a single family home has crashed 46% from its peak in 2005. And condominium prices over this same period fell by 36%. Single family homes are now selling below 2003 prices and condominium prices have dropped to 2005 levels. Despite residential inventory levels being down 10%, the rate at which unsold homes are being absorbed is below 5%. This represents more than a 20 month supply. And with new listings added daily, the imbalance between supply and demand will continue. Negative forces specific to our area are high foreclosure rates, declining tourism, high unemployment, slower 2nd home purchases, a deep Florida recession and latent or embryonic inventories. Weighing on our market are fears about hurricanes, high taxes and high insurance premiums. And retirees are delaying or abandoning plans to move to Florida. These trends will lead to a further 15-20% decline in home prices. |
Baby Boomers For 40 years, 78 million baby boomers have driven housing demand to record levels. This trend is going to reverse itself, compounding our fragile housing market. The retirement of Baby Boomers will depress prices in many areas. In parts of our country there will be a lot more sellers than buyers. Seniors are three times more likely to be sellers than Baby-Bust buyers. And they will be selling in places where few people want to settle; places that are cold, congested and expensive. In the next two decades, millions of aging baby boomers will put their homes on the market. This will cause a correction that will be larger and longer than the current slump. Census figures show Florida continues to grow rather than shrink, but the number of incoming residents from other states dropped by about 86 percent in just two years. The boomers, who do retire to Florida, may have a lot less to spend. Prospect for Recovery When it eventually levels out, don’t expect a quick rebound. Prices will likely scrape bottom for several years. Over the long term home prices will start to rise driven by inflation, increasing incomes and a drop off in unemployment. Treat your home as a place to live and not an investment like stocks. Enjoy home ownership for the many benefits it offers. House prices are driven by fundamentals that are not easy to predict. Factors affecting prices are immigration rates, birth rates, the size and nature of households, strong income growth, good job-growth prospects, affordable housing, a diversified economy and places where people want to live. Parts of Florida are good bets. But as in all bets there are risks. |
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What to do in Slow Markets Houses sell quickly in a slow market for the same reasons they do in a hot market. Houses that sell fast in a slow market have three common denominators: • They’re priced better than comparable listings.
Of all home sales, 70% involve a new mortgage. The lenders require appraisals and appraisers use lowest priced comparables. Even if a buyer were foolish enough to pay an above market price, they would still be unable to obtain a mortgage for above market prices, unless paying cash. For sellers, who must sell, should not wait out this market. Reluctance to take a loss now (real loss or perceived loss) will result in greater losses later. For investors, stop bleeding monthly, cut your losses now. The good news for buyers will be lower property prices, lower interest rates and for foreign investors a weak US dollar. Boomers prefer urban settings with cultural life and they prefer to live near family and friends. This bodes well for St. Petersburg. |
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Today's Top Real Estate News
Provided by Inman News
Four indicted for identity theft charges in mortgage scheme
Defendants face up to 30 years in prison
Real estate construction spending climbs
Activity remains on pace to top $1 trillion this year
Overnight real estate rates move higher
30-year fixed rate up at 5.42%; 10-year Treasury up at 4.33%
Dot-com pioneer auctions home on eBay
Homeowner sells luxury home online
Fed on a mission to slow economy
Rate hikes aim to curb energy-induced inflation
Chicago Gold Coast Luxury Home Video
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Prudential Tropical Realty |
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23314th St. N
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This website has been created for information purposes only. It is our belief that all information presented here is accurate as of date of publication, however this information may change at any time. The information presented here should be considered a starting point and we encourage everyone to fully research any information you are seeking. If you do find an error or have updated information, please contact us and we will update our information accordingly. Prudential Tropical Realty is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial Company. Equal Housing Opportunity |
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