The four stages of Home Seller Sickness

The customer is always right, but this is getting ridiculous. I’m talking about Tampa Bay area home sellers who refuse to drop prices on their homes. An exasperated Ann Guiberson, head of the Pinellas Realtor Organization, says asking prices are up over last year by a few thousand dollars.

How can that be? We’re stuck in a Florida-wide housing retraction with talk of 25 percent price declines in the air. Call it Home Seller Sickness. I had the affliction earlier this year when I sold my house after wrestling with the dead-weight market for more than half a year. The disease has four stages, ranging from prickly denial to glum acceptance:

Stage 1/My House Is Better Than Your House: You list your house for $300,000. Your neighbor lists the same model for $275,000. Of course, you can justify the premium you’re charging. Your kitchen has new floor tile, handmade by Venetian artisans. Your neighbor has brown linoleum, circa 1979. You start pricing the Toyota Highlander you’ll buy with the profits. House hunters respond by treating your home as if it’s the Bates Motel.

Stage 2/Maybe I Was a Little Rash: You’re forced to drop the asking price to $275,000. Sure, you’re still not undercutting your neighbor, but that guy’s a slob. Did you see the orange paint in his living room? Hasn’t redecorated since Fonzi was on TV. Plus, you’ve installed the best aromatherapy system on the block. One whiff of “ocean breeze” and “fresh laundry” and buyers will be racing for the contracts.

Stage 3/You’re Going to Make Me Work for This, Aren’t You?: Six months pass. Neither you nor your neighbor has sold. You drop the price to $249,999. Your realtor insists on the $999 trick: Make the house look desirable. Cancel the Toyota SUV purchase. Settle for an electric scooter.

Stage 4/Will Somebody Please Kill Me Now?: You drop your home price to $234,900. It’s the cheapest house on the block. The buyers finally make an appearance but demand you knock off another $15,000. You accept an offer just to be done with it. They nitpick you to death, insist you fix every jiggly doorknob or else void the contract. The buyer’s smile at closing contrasts with your frown. You blame your realtor. It’s all her fault. But the scooter ride home is invigorating.

--James Thorner

Florida Realtors see silver lining in dark cloud

Housing is hurting, but you can always count on the Florida Association of Realtors to supply some soothing balm.

In a barrage of press releases Thursday, the Orlando-based group suggested real estate's recovery will be driven by three forces: Florida's continuing popularity with foreigners, its stronger-than-average job creation and the retirement of baby boomers seeking warmer climes.

"We are in for a retiree boom, and we are in the right place for it," said Patricia Osborne, a Realtor in New Port Richey.

FAR noted that about 10 percent of Americans will retire in the next decade. Yes, it's talking about the vaunted baby boomers. And it quoted University of Central Florida economist Sean Snaith, who predicts  2008 will be a strong year for the state's economy - outside of home building, of course.

A crisis of confidence in real estate, combined with stingy credit, has produced the worst Florida housing sales in a decade.

Call it the Great Home Heist of 2007

The proposal to double the homestead exemption from $25,000 to $50,000 on Florida homes is a joke. There, I said it.

But it’s hard to laugh at this particular joke. In all the debates about property taxes, no one seems to mention that the $25,000 homestead exemption, effective since 1982, has been The Incredible Shrinking Tax Break for 25 years. When the exemption was increased from $10,000 to $25,000 between 1979 and 1982, the median home price in the Tampa Bay area was about $50,000. In other words, the exemption cut the taxable value of your house in half. March forward 13 years.

In January 1995, when the complementary Save Our Home tax cap took effect, Tampa Bay area homes sold for a median price of $71,000. The homestead exemption exempted about 35 percent of a home’s value. Observe our plight today: Based on September’s local home sales price of $200,700, the value of the exemption is only 12 percent of a typical home’s value. What seemed like a governmental gift in 1980 is the Great Home Heist in 2007. Home values have risen through the roof, but the state hasn’t indexed the exemption for inflation.

Instead, the Legislature passed Save Our Homes, approved by voters in 1992. SOH caps the increase in taxable value of a primary residence at 3 percent a year. When you move, you lose the accrued savings and are taxed at your new home’s real value. Florida Tax Watch flagged the unfairness of SOH back 1992. People mistakenly think SOH is a tax cut. It’s not. It’s a tax shift, a shift to first-time home buyers, businesses, vacation homes and anyone who wants to change his or her address. To its credit, the Legislature tried to rig a fairer tax structure this year. The homestead exemption would have expanded to 75 percent of a home’s value up to $200,000. The state would have taxed a $200,000 house as if it had been worth $50,000. Voters feared the change. A judge objected. And the Legislature hatched this turkey of a compromise to double homestead to $50,000.

On my house, it’s going to cut $200 off a tax bill of $6,200. The sound you hear is laughing. And it’s not the joyous variety.

Florida housing numbers mirror Tampa-St. Pete's

It looks like we're about average in Florida when it comes to single family home sales the past year, according to the Florida Association of Realtors.

Florida's average home sales decline was 38 percent in September 2007 compared with the same month of 2006. Median home prices fell 9 percent over the same period. The Tampa Bay area's numbers were 40 percent down in sales and 10 percent down in price.

The Realtor association numbers were a hair different than Tampa area numbers reported two weeks ago. That's because the state association adds Hernando County to the mix of Pinellas, Pasco and Hillsborough counties.

If you're after more details, take a look at two charts, one showing single-family homes Download September_2007_home_chart.pdf and the other condos Download September_2007_condo_chart.pdf .

Note that Fort Lauderdale, Miami and Ocala turned in extra lousy numbers. Even Orlando was hit harder than Tampa.

August numbers out for Tampa Bay area home sales

Ahead of the release dates of the national and state real estate groups, house and condo sales for Pinellas, Hillsborough and Pasco counties for the month that just ended are now public, courtesy of the Pinellas Realtors Organization.

The news is mixed, though it's more glum than giddy.

The good news is that Tampa Bay area inventory - the number of homes for sale on the market - is the lowest it's been this year.

The bad news is that sales in August were off big time over sales in August 2006. Only Pasco County showed a sales increase (and that's just month to month) from July to August of this year.

Total sales for August in Pinellas, Pasco and Hillsborough counties were 2,374. Listings totalled 40,896.

For a more detailed breakdown county by county, click on these links: Download pasco.pdf; Download pinellas.pdf; and Download hills.pdf

Bush mortgage plan a modest bailout

President Bush extended a helping hand Friday to thousands of homeowners caught in the financial bind of escalating mortgage rates. It’s a limited offer to people with good credit and steady jobs, but it’s a sign that the federal government can no longer the ignore the growing tide of foreclosures -- nationwide but especially in Florida -- that has thrown the financial markets into turmoil and depressed real-estate sales. "What the president did today is provide the opening shot in what will be an extended debate that ultimately will result in some real money being put to work," said stock analyst Dick Bove of Lutz in Hillsborough County, who follows financial companies for the brokerage Punk Ziegel.

About 240,000 families would qualify for the program, according to the administration’s analysis, though some groups estimate as many as 2-million households face potential foreclosure.Those most vulnerable may benefit little from the administration’s offer.

"You’re talking about helping people who have relatively good credit and that’s not the problem," said Scott Brown, senior economist at Raymond James & Associates in St. Petersburg. The highest foreclosure rates have been among borrowers with "subprime" credit and investors who bought houses and condos expecting to resell them quickly at a profit. Investors are a huge part of the problem in Florida, where about a fourth of the investors with good credit are in default. They wouldn’t get a bailout from Bush.

Here are the key points of the president’s proposal:

•Launch "FHA-Secure" program to refinance loans for people who have good credit but fall behind on payments when their mortgage rates adjust.

•Allow FHA to reduce down payment requirements and insure larger loans.

•Change tax code so cancellation of mortgage debt on primary residence would no longer be considered taxable income.

•Work with lenders and nonprofit groups to provide mortgage education and expand refinancing options.

•Support efforts to improve mortgage lending standards and disclosure requirements.

-- Helen Huntley

Builders just can't say no

Stunner from the Florida Association of Realtors convention that ended Sunday in Orlando: Almost two years after the housing boom ended, Florida builders are still force feeding houses and condos into the overstuffed market.

The news comes from Realtor's guest economist Ted Jones, who explained that new home construction permits in Florida are running at an annual clip of about 100,000 this year. That's half what it was in 2005, but Jones thinks it should be much lower.

"We're dramatically overbuilding this state still," he said.

Jones explained that many  builders overpaid for land at the top of the market and have little choice but to plow forward, hell or high water.

My take on the issue appeared in a column that ran Sunday in the St. Pete Times.