July home sales improve in most Florida metros

Tampa Bay area home sales rose 5 percent in July, a positive trend mirrored in 11 out of 20 Florida metro areas.

Sales in Pinellas, Pasco, Hillsborough and Hernando counties totaled 2,174 in July versus 2,068 in July 2007, according to the Florida Association of Realtors.

Lower prices seemed to help stimulate sales. The median sales price of a single-family home dropped 18 percent, from $215,600 in July 2007 to $176,500 in July 2008.

Other metros showing July-to-July gains include Fort Myers, Fort Pierce, West Palm Beach, Melbourne, Punta Gorda, Fort Lauderdale and Daytona.

We're getting close to the point where we can safely say sales - but not prices - have stabilized. May sales were up a hair, followed by a slight decrease in June. With July's improvement we're essentially seeing a quarter of stability.

Here's the chart from the Realtor association: Download farJULY08.pdf   

Comments

[yyyy]

Hey, we are above average! I saw an article on msnbc.com that stated home sales rose 3.1%, nationally.

[Tino]

S&P/Case-Shiller numbers out for June:

Tampa home prices down 1.15% to $175k. This is the 23rd consecutive month that prices have fallen.

Prices are now down 26% from the peak of $238k in July 2006.

The futures market expects significantly lower prices, bottoming in late 2010. There is no recovery in sight.

Ouch.

[yyyy]

Per article on msnbc.com:

"No city in the Case-Shiller 20-city index saw year-over-year price gains in June, the third straight month that’s happened.

However, the rate of single-family home price declines slowed from May to June, a possible silver lining, the index creators said.

While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level” said David M. Blitzer, chairman of the index committee at S&P."

[Tino]

They are talking about housing inventories right now on CNBC. A big issue is that new home builders have all but stopped building new homes (515,000 in July compared to three times that amount at the peak), but inventories are not budging.

We are still at 4.67 million unsold houses and condos, with much more hidden inventory not currently being marketed. Until this number starts falling dramatically (i.e., demand exceeding supply), prices must continue to fall until we hit equilibrium.

[Rufus]

Yeah, that PESKY hidden inventory. Just like my car. I don't have a "for sale" sign on it. And it's not advertised anywhere. But I really do want it to sell. So it's part of the local used car "hidden inventory."

I just don't buy that professorial argument Tino. Your supply and demand theory does not address one of the biggest issues - taxes and insurance.

As a relatively new homeowner i am paying about 1k per month just on these expenses. A full third of my housing costs are here.

Why do so many posters here ignore the impact of these expenses on buying decisions and affordability?

Maybe you will never reach equilibrium because the sell prices will ultimately have to be so low that the economics of the whole thing stops making sense for the sellers. This would look like shorts sales, foreclosure, and decreasing population - sounds like Pinellas County doesn't it?

[Tino]

Rufus, you are making no sense, just like a realtor. If a vacant house doesn't have a realtor's sign in front, it's like Bigfoot or the Loch Ness Monster to them -- it doesn't exist.

You don't know of anyone who is forced to rent their home because they couldn't sell it, or a home that is vacant because the bank is foreclosing?

I track foreclosures, vacant properties and "expired/withdrawn" listings that sellers have given up on, yet sit vacant. In my zip code, there are an additional 30-40% of properties that fall into those categories at any given time. None of these are "official" inventory listings.

1:26 pm, I agree with your statement. Affordability is also dropping. That would impact the demand, as people who previously could afford a home are now forced to rent, or those who could afford a more expensive home have to settle for something less.

Pinellas County asking prices are not that low -- there are many, many homes priced at 100% or more than the comps. They will continue to sit vacant and unsold.

[yyyy]

1:26...maybe people aren't talking about $1000 taxes and insurance because we don't pay that much. I can't imagine how much you spent on your house to get that high of a number. I bought my house in 2004 and I don't pay anywhere near that amount (maybe $400 a month).

yyyy - a lot less than you would think. It is a 1500 ft2 2/2. Go figure.

Thanks for helping make my point...

[Tino]

1:26, your numbers look about right. My neighbor in a 3/2, 1600 sq ft condo paid $400k (taxes of $7,500 a year), and insurance for that unit runs about $3,000 for wind, flood and personal effects.

Add in a mortgage at 6% and he's probably paying $25,000 a year for that. Throw in another $300 a month for non-insurance condo fees and his total bill to live there is about $39,000 per year.

Sadly, he couldn't get more than $260k if he sold that unit today. Since he bought it three years ago, his total cost to live in a Tampa paradise is

($39k * 3) + ($400k - $260k) = $257,000, or about $7,100 a month. If he itemizes his taxes, he might get up to $800 a month back.

Oh yeah, it's MUCH better than renting!

[yyyy]

All depends on where you live. I've seen 2/2's in S. Tampa for a ton of money. Can't afford that, most people can't. Bought a 3/2 in a nice area for a good price. Taxes and insurance come out to $400 a month. That I can live with.

[Fuzzy Bear]

Yeah, that PESKY hidden inventory.

That type of comment is from a typical person who knows nothing about the RE market and inventory. The hidden inventory or shadow market does exist except in the view of those in denial!

The hidden inventory or shadow market as others call it does not compare to the auto market as it is like comparing apples to steaks! Poor example of the use of autos. Perhaps you don't know the differnce between a car and a home.

[Fuzzy Bear]

I just don't buy that professorial argument Tino. Your supply and demand theory does not address one of the biggest issues - taxes and insurance.

The biggest issue in the RE market was not taxes and insurance, it was the rapid rise in RE prices that went beyond the consumers affordability range. As the RE prices rose, it in turn drove up taxes and insurance costs in addition to insurance being driven up as a result of the past hurricanes.

[Fred]

Excellent comment by Fuzzy regarding the response to Rufus on "PESKY hidden inventory.

Rufus = Dufus as this realtor does not have a clue about the real estate market, let alone the local market.

I did not claim it was the "biggest" issue.

The speed at which real estate prices rise is not relevant to the tax/insurance determination or even to affordability.

What matters (to affordability) is the total monthly cost of ownership (PITI plus HOA fees if applicable) versus monthly income.

It does not really matter how the numbers got to where they are. Any and all affordability equations have to include principal, interest, taxes and insurance. Sell price only informs this equation.

[bob]

To Fred...

Do you think we could have a civil discussion without name calling? Everyone is allowed to their opinion and everyone has a right to post it.