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Market Opinion and Projections for 2008
I have been reviewing the latest real estate data for the Tampa Bay market area and a distinct trend has been developing. If you look at my trend analysis page, which is just a simple month to month sales and new listings for the past 8 years for Pinellas and Hillsborough. You will see that we are becoming identical to 2001 volume rates with a very slight increase in regards to sales, as compared to 2001. The listing rates per month are without-a-doubt coming down, another good sign. What does this mean? Well, you can expect that some of the hands in the cookie jar should slowly be coming out, as the sales cannot support the large amount of current agents. This is a good sign for you if you are making a stand at this. The unbalanced amount of listings means still, that the best-priced home/condo will sell before the others, and that the bottom of this price decrease is not yet here. However, I really have to reiterate that the solid trend in sales volume rates means you should know what to expect in the last half of this year. And if what you have been doing is working, keep doing it. This is really a big supply and demand issue that will resolve itself over the coming year to year and a half in regards to price.
There are approximately 34,000 listings in MLS between Hillsborough and Pinellas County. Parts of Pinellas and Hillsborough compete with each other so I use both counties as an indicator of our local market's health. Of the 34,000 listings, I ran multiple search criteria and the total of short sales listed for sale active and pending are around 10-15% of the total listings. Current REO's were at a much smaller and non-material amount so far. I imagine that some listings are not inputted correctly so a variance should be expected which is why I am giving a range. Before the boom, Pinellas and Hillsborough would average 18,000-25,000 in total listings and pendings at any one time. So if the total listings are adjusted for the total short sales we are about 5,000-10,000 units out of balance, which is way down from the high near 18,000 out of balance a year ago. The real unknown is the lis pendens that could hit the market. The research I did left about 65% of the recorded lis pendens unaccounted for. And monthly-recorded lis pendens filings in Hillsborough County are very near monthly sales. This could be another trend to come and slow the price stabilization in our market. Congress has approved the 300 billion for FHA to assist in re-writing of mortgages for those facing foreclosure. This is an unknown that could help in keeping these new lis pendens off the market. However, the banks must participate in part of the loss upfront. The problem is the servicers make more money on the actual foreclose so there is no incentive for the servicers to participate, it would take too long for a decent explanation, so I will leave it at that. New homebuilders have already got the hint and have reduced their inventory and new permit applications.
I have been reading every article, email and opinion about this real estate market that I can get my hands on. What I am finding is that most are either too pessimistic (and should quit) or too optimistic (and not willing to make adjustments). The numbers don't lie and don't let anyone spin the numbers and coerce your plan. This is a simple demand and supply issue of real estate along with demand and supply of capital, and the big one, demand and supply of agents, which affects everyone in the Real Estate industry. Relying on my college degree and prior experience as a controller over a decade ago, I try not to complicate simple numerical analysis, when that is all that is needed. As a member of the board, I read a lot of the local real estate numerical analysis articles. I have concluded, that they are somewhat useless, and what is needed is a month-to-month analysis over the past 8 to 10 years, along with a few projection graphs, (put your money where your mouth is). A break down in total lis pendens filed for each individual MLS market area and a comparison between the lis pendens filed and the current short sales listed in the particular market area to the current listings would be helpful. Anyway, I have provided my projections for 07-12/2008. Since our market is slow to react, the most similar year in my opinion is 2003 though coming down the price and unit number hill.
Lets see how close I come. Here are the numbers for each month along with my projections for the last six months. I will keep them updated and compare actuals to my projections. These are not numbers out of the hat; they have some good research and analysis behind them. Email what you think the trends will be and I will start including them in the website.
MLS data, variances due to changes well after months end, since there is no actual closing of the books.
Sales - Pinellas and Hillsborough County
01/08 1202 07/08 2014
02/08 1399 08/08 1913
03/08 1688 09/08 1799
04/08 1884 10/08 1776
05/08 1975 11/08 1510
06/08 2009 12/08 1887