Tampa Bay area home sales stop sliding in August

Tampa Bay area's median home price is back to what it was in December 2004, but those discounts helped keep home sales from falling in August.

Home sales in Pinellas, Pasco, Hillsborough and Hernando totaled 2,154 in August, no change from sales in August 2007, according to the Florida Association of Realtors.

This marked the fourth straight month that local sales were flat, fell slightly or rose slightly, suggesting that the market has flattened.

Low prices have been dealmakers in many cases. Tampa's median home price stood at $171,200 in August, 20 percent below the $214,100 median price in August 2007. Realtors say discounted foreclosure sales have helped drive much of the traffic.

“Sales have picked up significantly in several Florida and California markets,” says National Association of Realtors chief economist Lawrence Yun.

In Florida as a whole, sales were down 4 percent in August versus a year earlier. Sales were way up year over year in Fort Myers, Fort Lauderdale and Fort Pierce. Among the sales losers were Panama City (down 29 percent), Pensacola (down 31 percent) and Tallahassee (down 42 percent).

Here's a full Florida chart: Download august08.pdf

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Comments

[Fuzzy Bear]

Realtors say discounted foreclosure sales have helped drive much of the traffic.

Affordability is what is driving the August sales. However, look at the inventory of homes that are not priced correctly and they just sit, month after month. Price the property so it is in line with local incomes and rental costs and it will sell!

[Tino]

Hmmm...that's funny. Now that foreclosure sales are 35-40% of all real estate sales nationwide, the realtors are starting to include them in their totals to firm up the numbers.

I love how they include foreclosures for their sales numbers, but not for the inventory counts.

[Tino]

9/25 news flash:

Nationwide home sales in August plunged 11.5% from July, versus a 1% drop that was expected. [source: US Census Bureau]

The number of sales was a 17-year low (January 1991).

Good luck, sellers! Keep those asking prices high!

[yyyy]

new home sales

[Gene]

It's amazing to me how many people appear to be "wanting" an economic collapse, just so they can say they were right. I mean, the way it sounds, you'd think people are oblivious to the fact that an economic collapse in the U.S. will negatively affect them too.

Listen to Warren Buffet's recent interview on CNBC - he's one of the world's richest - and even he's fearful.

I don't get it one bit...

[Tino]

Very bad news for inventories. Notice the disconnect?

New housing starts -
Apr 2008: 1,004,000
May 2008: 982,000
Jun 2008: 1,089,000
Jul 2008: 954,000
Aug 2008: 895,000

New home sales -
Apr 2008: 542,000
May 2008: 515,000
Jun 2008: 500,000
Jul 2008: 520,000
Aug 2008: 460,000

Builders continue to dramatically overbuild every month. Add these to the foreclosure inventory (which now accounts for 35-40% of all home sales) and the supply is grossly outstripping demand.

Prices need to fall, but sellers haven't received the memo yet. In fact, in the zip code I am following, there were almost as many price INCREASES as there were price cuts in the last month.

There was one sale out of over 70 homes in the past three months (at a price 25% below the last listed price). You can extrapolate that to a 17 year inventory if you wish.

Tino,
have you considered the possibility that the home owners in the neighborhood you are interested in have the financial power to hold thru the down turn? In many expensive upscale neighborhoods, selling is only something you do when you are bored with the property.

[Tino]

No, these are almost all vacant properties. They try to hold out until they are forced out of the property at gunpoint by the sheriff.

There are 70 houses I am tracking. So far this year, 15 have either entered foreclosure proceedings and/or are now bank-owned. About every two weeks, another one heads to foreclosure.

Even in pre-foreclosure, sellers are asking for prices 25-75% higher than the mortgage, hoping to snare a sucker.

It's funny and sad at the same time, and the reason why the market is not going to recover any time soon. Sales are being completed at $250-300/sq ft, but current sellers are rejecting these offers and are still asking $400-700/sq ft.

[fuzzy bore]

Tino,

1) Those are annualized numbers. They do not represent the totals for each month. Looking at the numbers you posted, the gap has actually shrunk from 462,000 in April to 435,000 in August. It will be interesting to see what the gap is at the end of the year. The "disconnect" is improving, as your numbers show.

2) Households in the US form at a rate of about 1,000,000 per year. Not all of them buy houses, but many do.

[David]

WHY is Lawerence Yun still the NAR's chief economist? This guy has been wrong so many times over the years with most of his forecasts nobody listens to what he has to say.

[Fuzzy Bear]

The "disconnect" is improving, as your numbers show.

There is some improvement in the disconnect, but there still remains a large disparity. Numerous flippers/investors have choosen to ride out the storm by renting their ill bought investments at a loss in hopes of the market improving. In reality the longer they wait the more loss they will take.

To gauge the progress of any given market one needs only to look at the medium wage and the medium price of properties. When the medium wages at three times income are in-line with the medium property price then it will be close to a bottom. However, if rentals cost in any given market remain less than ownership costs, then the market will drop further.

[Fuzzy Bear]

WHY is Lawerence Yun still the NAR's chief economist?

Special interest cheerleaders seldom get it correct! The cheerleading by Mr. Yun is more of a sales role than being an economist.

I think the numerous flippers/investors have been forced to ride out the storm because they don't have the money necessary to cover the loss of a sale. As a result, they simply hold on and lose a little every month, which is psychologically less painful than taking a huge loss or going into foreclosure. In my opinion, this is no different than the popping of the NASDAQ stock market bubble. Investors rode stocks all the way down because it was just emotionally too painful to take the loss and admit failure. Of course, many of the stocks are now bankrupt and the NASDAQ sits at 2,150, which is only 43% of the all time high reached in the year 2000. Adjusted for inflation, investors who were suckered in near the high have lost 75% of their money. I believe many real estate investors will likely suffer the same fate. The difference between the stock market bubble and the real estate bubble is that the real estate bubble was much more extreme. With the stock market an investor was required to at least have 50 cents in an account in order to buy $1 worth of stock; with real estate that same investor was often not required to put any money into the investment and sometimes even received cash back from a purchase.

[James Thorner]

Yun's in an impossible situation. I've talked to him twice in person. His economic presentations are pretty sound, but when it comes to predictions he has to twist his language in pretzels to keep his job. Perfect example was a statement this week that vaguely referred to a recovery after 2009. It's as if he wants to be straightforward but is forced to accentuate the positive.

[Fuzzy Bear]

he has to twist his language in pretzels to keep his job.

I have serious concerns about any entity who forces employees to lie to the public just to keep their job. Mr. Yun clearly knows right from wrong and should stand up and present the facts as they are to the public.

If Mr. Yun has higher ethical standards and is forced by senior management to outright lie to the public, then he should terminate his employment with the NAR! There is no excuse for not being straightforward, open and honest with the public as it is the ethical manner to conduct ones self.

Unethical activity often opens the doors to illegal and criminal conduct.