Tampa Bay - Positive News & HOT Deals!

So, how many of you thought condo sales were dead? Very interesting market statistics in for the month of August… sales of existing homes in Florida rose 1 percent in August, with a total of 13,997 homes sold statewide compared to 13,908 homes sold in August 2009, according to the latest housing data released by Florida Realtors®. However, statewide existing home sales in August increased 3 percent over statewide sales activity in July. A tick up, but nothing to run to the bank with, right?

Well, you are in for a surprise! In Florida’s year-to-year comparison for condos, 5,706 units sold statewide last month compared to 4,662 units in August 2009 for an increase of 22 percent! August condo sales increased almost 2.7% over July! We have posted a link to the Pinellas county August Market Stats on our Home Page. There is no question that the housing sector faces a long recovery, partly due to slow job growth and a still fragile economy.

National Association of Realtors (NAR) Chief Economist Lawrence Yun commented that “given rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.” The interest rate for a 30-year fixed-rate mortgage averaged 4.43 percent in August, down from the 5.19 percent averaged in August 2009, according to Freddie Mac. Short sales are driving this market and they do take tremendous patience to work through the process. Currently in Pinellas county alone, there are 1825 properties in “Active with Contract” status going through the short sale procedure. That is 1825 sales that are NOT showing up in the statistics.

And speaking of condos…the last 4 emails we sent out to our database advising of brand new HOT DEALS, in every single case the property was under contract within 4 days! Our last email announcing a new short sale in Redington Shores Yacht & Tennis Club went out at 8:30pm on a Friday evening after the property was listed that afternoon. One of our clients had it under contract by noon on Saturday! Now that was quick communication!!!

Here are the latest deals we think you might want to act upon:
1) Clearly one of our favorite complexes for its Clearwater Beach location and its 7-day rental status, Harborview Grande was completed in 2006 and has all the right mix of criteria… all block construction, latest building codes, volume ceiling height and spectacular panoramic views of Clearwater Bay and the Gulf of Mexico! This unit #406 is completely designer furnished and turnkey ready. As a weekly rental, the owner has been able to use it himself personally as well as generating a net annual rental income of around $35,000! This 3BR/2BA was reduced by $41,000 late yesterday! NOW $498,000!!!

2) Another complex we follow closely is La Vistana, a gated community also completed in 2006 and located right on the beach in Redington Shores. With its handsome exterior and interior open atrium, it has become a favorite destination for both full time residents as well as wintering snow birds. Unit #703 (7th floor direct gulf front) was originally purchased for $1,250,000. This 3BR/3BA has just been reduced $100,000! Now $699,000!!!

3) A small beach front complex in Indian Shores has special meaning for us. When we first moved here from Atlanta, we rented for 2 months at The Pointe trying to decide if we liked the area and if we wanted to live on the beach. The result was a resounding YES! A 1BR/1BA condo is a perfect getaway at a now very affordable price. #102 was just reduced $20,000! Now $259,900!!!

4) Looking for a 3 bedroom on the beach? They aren't that easy to find… particularly under $500,000. This West Coast Vista 7-day rental complex in Indian Rocks Beach offers just that. A top floor unit was just reduced $40,000 yesterday! We previewed it today and our opinion was a little sprucing up would make a world of difference. Now $419,000!!!

5) And not to overlook the amazing single family home in the prestigious community of Belle Isle along the Pinellas Bayway, we have an estate home which has so many upgrades and amazing novelties… all it needs is the right owner match to appreciate all it has to offer. This home was the original owner’s pride and joy and he never hesitated to add the latest and greatest. Truly a multi-million dollar home, this spectacular home has been drastically reduced by his estate after his untimely demise. Now $999,000!!!

If one of these drastically reduced properties fits what you are looking for, the best advice we can give you is to not delay. They may all be accessed through the HOT DEALS page. We know the market well enough to know they won’t last long. If we know specifically what you are looking for we can be sure you don’t miss one of these. We have many clients currently making use of our Buyer Program… you may want to try it too!

As part of The PURTEE Team, we are constantly working to expand our market knowledge and share it with you. You will find us hard working and willing to go the extra mile for our clients… simply take a look at some of the latest Testimonials to see for yourself. And don't forget the BLOG With over 150 posts, you will find a wealth of information to help you through your real estate process. Never hesitate to call on us. We are here to help!

JULY Hiccup In Market Statistics

The link to the new July 2010 Market Statistics for Pinellas County has been posted on our Home Page. From March through June, we saw steady increases in our market absorption as inventory decreased and sales picked up. By the end of June, however, the fears of the BP Oil Spill in the Gulf of Mexico along with slower than anticipated economic recovery and double digit unemployment... that energy lost some of it sizzle. In addition, sellers who felt they could finally put their home on the market and do a little better brought a new source of inventory.
Click On The Chart To Enlarge
We use this chart to get a sense of how much inventory is being reduced in the market and it is determined by dividing the number of units sold during the month by the total number of listings in the MLS. In July, 8.3% of single family homes were absorbed compared to 11.1% last year. 6.1% of condos were absorbed compared to 6.9% last year... not quite the falling off of single family homes (showing a little comeback on the part of condos in general).

51% of all new transactions in July were cash purchases, with 27% getting conventional loans and 16% FHA. 45% of all residential sales to date in 2010 have been priced between $120,000 and $399,900.

Waterfront property appears to be getting the most attention as international investors are taking full advantage of these prime real estate opportunities...

ALL CASH? Welcome To The Investor Squeeze

The real estate down turn has leveled off and investors like R. Donahue Peebles, who sold properties as the slide began, are bringing their cash back to the real estate market. Between the exceptional prices and tax breaks, this buyer's market finds great opportunities for the savvy investor who happens to be flush with cash.

So, what does this do to the average house-hunter needing a financing contingency? When you work with The PURTEE Team, you will hear a phrase we say often, "Price or Terms". This basically means the stronger the terms, the lower the acceptance price will be. In the current market, both average buyers and investors are out in the market searching for the deeply discounted deals. However, when they come head to head in an offer for the same property, most often cash will prevail.

According to National Association of Realtors researcher Jed Smith, “Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge. The investor may actually pay less, but it’s cash, right now.” We are seeing it with our own buyers and sellers. A cash transaction can eliminate things like a lender requiring approval of a condo building or an appraisal coming in too low. This makes it very tempting for the seller.

The cash sale trend continued in January when 52% of all closed transactions in Pinellas County were paid for in cash rather than through other financing means. This investor squeeze has our attention as we continue to research financing options that can make a difference when presenting a buyer's offer. It is more important than ever for a potential buyer to meet with a lender prior to starting his/her real estate search. A pre-approval letter from a lender can go a long way toward balancing the playing field.

Obama Administration Plans Exit From Mortgage Markets

Mortgage rates have remained low over the past year as the Obama Administration has used federal support to drive down rates in order to revive home buying. Keeping interest rates at historic lows cost an investment of over $1 trillion and was considered a key ingredient to stabilizing the housing industry and re-booting the economy.

The announcement has been made that the wind-down of government support for mortgage rates has begun and will be completed within two months. "We did what we thought was necessary to stabilize the market, but we don't think the government should continue special efforts forever," said Michael S. Barr, an assistant secretary at the Treasury Department. "As you bring stability, private participants come back in. We do expect this now that the market has stabilized. I'm not going to say there will be no effect on rates, but we do think you are seeing market signs and market signals that there should be an orderly transition."

This will be the test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. What will be interesting is to see the impact it will have on interest rates in both the immediate and long term future. The mortgage industry depends on the private sector to fund it via mortgage-related securities. As the economy softened, the Fed and Treasury became the only major buyer of these securities. At the same time, the federal government stood behind mortgage-finance companies Fannie Mae and Freddie Mac by taking them over and pledging to cover their losses. Has the mortgage industry become too dependent on government support? In our dialogs with both buyers and sellers, financing is a key ingredient to any transaction. We are seeing more requests for All Cash, Seller Financing or Lease/Purchase to generate more creative ways to navigate the financing issue.

As the economy began to recover, the Treasury ended its purchase of these securities in December and the Fed is winding down it purchases to end March 31st. We will be watching closely to see the impact this will have in our market.

Florida Bucks The Trend In December Home Sales!

Watching Fox News yesterday, a very depressing story came on the air about "home sales taking a dramatic plunge in December." It caught my attention because I knew Florida's existing home sales had grown in December.

As a matter of fact, home sales in Florida grew "33 percent last month with a total of 14,630 homes sold statewide compared to 11,013 homes sold in December 2008, according to Florida Realtors. Statewide existing home sales last month increased 4.3 percent over statewide sales activity in November.

The National Association of Realtors says sales nation-wide dropped 16.7 percent to a total of 5.45 million in December, down from 6.54 million in November. Experts had predicted a decrease of 7-10 percent. This news came out at the same time as the Obama administration announced plans to withdraw mortgage support that kept interest rates low! Tomorrow's blog will concentrate on the impact of that wind down of federal lender support.

We have said all along that real estate and the recovery would be localized. Here in Florida, and specifically the Tampa Bay area, we are poised to bounce back much faster than other parts of the country. Forbes Magazine predicted that over a year ago. December marked Florida's 16th month of sales activity increases over prior year! As the snow birds come here throughout the season, the appeal to some of these great prices is a huge draw.

Tampa Bay Realtors sold 5,000 more homes in 2009 than they did in 2008, a healing trend that helped real estate prices find some footing last year. Single-family home sales totaled 28,617 in 2009, up 21 percent from the 23,615 homes that changed hands in 2008, Florida Realtors said.
Tampa Bay's median home price ended the year at $140,000, pretty much the level at which it was in the spring of 2009, defying the depressing effects of cheap foreclosure homes.

Mortgage Market Weekly Review

Mortgage bond prices rose last week pushing mortgage interest rates lower. The bond market was buoyed by the announcement that US Treasury increased the credit lines of Fannie Mae and Freddie Mac a total of $400 billion. This was a signal to investors that those entities are “too big to fail” as viewed by the Treasury. The mortgage industry saw some weakness Thursday afternoon as retailers reported stronger than expected holiday sales. (Keep in mind that a recovering economy will drive the mortgage rates UP.) The employment report Friday was generally bond friendly. For the week interest rates fell by about 1/4 of a discount point which brought 30-year home mortgages down to 5.09% for the first decline in a month.

The inflation data that comes out this Friday will be the most important economic data this week. Signs of stronger than expected inflation would not be good for mortgage interest rates. (see above) The Treasury auctions will also dominate trading. Stronger than normal foreign demand could bode well for the overall level of interest rates. Weaker than expected bids would likely result in interest rate increases.

The good news here in Florida is that Fannie Mae announced last Thursday that it would comprehensively review hundreds of condominium projects in Florida. Through a new “Special Approval” designation, Fannie hopes to streamline mortgage approvals for projects that don’t currently fit Fannie Mae guidelines even though they present limited risk to the company.

More on the "Special Approval" designation tomorrow...