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Archive for the 'Market Trends' Category

“Where are Pinellas County home prices going in 2009?”

I didn’t make that question up. Some people find this blog by searching Google, and one reader from somewhere in Ontario found me by typing that very question into the Google search engine yesterday.
It made me think, “That’s more than just a Google search string; it’s a pretty basic question about what we may expect real estate-wise during the coming year. It’s a question that everybody wants answered.”
So here’s my answer: I have no idea.
I don’t think ANYBODY really knows where home prices will go in Pinellas County in the coming year, and that’s the problem. Uncertainty is everywhere right now, not just in the housing market but in every corner of the economy. We have many more questions than answers because we’ve never been in this position before — not for a very long time, anyway.
So, having no real answers, I’ll venture an opinion:
I think we are at or near the bottom. I have a couple of reasons for thinking that; for one thing, prices seem to be holding fairly steady and have been for some months after a period of free-fall. For another thing, first-time homebuyers are pretty active in the market right now, which tells me that young employed people are seeing value in the current marketplace. And third, investors are coming forth and buying properties, often with cash.
Those are all good signs. BUT, I don’t have to tick off the areas of uncertainties in the economy, inside and outside of the real estate market.
Anyway, I’m going to try to remember that question from that Ontario reader about Pinellas County home prices, and I’m going to post some stories on this blog throughout the year that respond to that question in one way or another.

Tags: home prices, pinellas county

Real estate values down big-time during 2008

Just how much can we expect national real estate values to deflate during 2008, once the year comes to an end in the next couple of weeks? One national real estate organization that tracks such things believes the loss will amount to more than $2 trillion — that’s “trillion,” with a “T.”
Zillow is an organization that follows and keeps track of real estate values in the different regions of the country. It says that real estate values in the U.S. declined $1.9 trillion in the first three quarters of the year.
What does that mean? Zillow says it means that 11.7 million households now owe more on their home mortgages than their homes are actually worth. One in seven of all homeowners were upside-down on their mortgages at the end of the third quarter.
That means negative equity, falling values and increasing numbers of forclosures.
Is there any good news in all this? Well, some. First time homeowners are looking at property and buying, and rates continue to be good. Locally, home sales seem to have leveled off. But with so much bad news in so many sectors of the economy, it’s still a time for caution.

Tags: Add new tag, home values, mortgages

“Green” homes are a major priority for buyers

Yesterday I talked a little bit about some statistics and opinions that the National Association of Realtors gathered during a national survey of 133,000 home buyers and sellers.

Those people surveyed talked a lot about the current economic situation and about the state of the real estate market. But one thing that surprised me was how many people still have strong feelings about environmental considerations when they buy a home.

 A full 90 percent of those surveyed said they want their new home to be environmentally friendly. Those surveyed said they want (in this order) energy-efficient heating, cooling, appliances and lighting.

 So I would say it’s not all about price when people look now for new homes. They still want efficiency and new “green” technology, even in spite of the challenging market. And those green upgrades will still be paying dividends long after the economics of home buying returns to a more normal state.

Tags: green homes, pinellas county

NAR says foreclosure sales way up from previous year

 The National Association of Realtors held its annual convention in Orlando earlier this month. One thing that’s always interesting to review is the statistics that NAR collects.

The statistics that they released at this convention were based on a massive survey that NAR conducted between July 2007 and June 2008. In all, NAR asked a number of questions of people who bought or sold property during that time frame. In all, 133,000 people were questioned.

One question asked of buyers was: Did you purchase a home that was in foreclosure? Six percent of the buyers responded affirmatively, and a whopping 38 percent said they considered buying a forclosure property but just couldn’t find the right one.

That six percent number is up from just one percent in the previous year.

It ought to be very interesting to see what that answer is next year.

I’ll be providing answers to more questions in the NAR survey in the coming days.

Tags: Foreclosures

Columnist sees a better way to tax cuts

A columnist for a newspaper in California says he thinks he has a better way to, in effect, cut taxes while stimulating the housing market.
Jonathan Lansner writes a column for the Orange County REGISTER. Here’s what he suggests: Double the mortgage interest payment deduction that you can claim on your income taxes.
Under the current tax law, you can deduct a dollar for every dollar you pay out in mortgage interest. Lansner says doubling that allowance to $2 would pay a number of benefits: It would lower the effective mortgage interest rate; it would lower the cost of borrowing no matter what the interest rate of one’s loan; and it would be a de facto tax cut for the middle class, giving them more spending power.
Lansner says the move might be enough to turn skitterish lookers into actual buyers, since home ownership would be the way to reap the benefits of the plan. Adding another benefit of home ownership over renting also might make more people think about finding ways to stay in their homes, rather than succumb to foreclosure.
According to Lansner, his idea ought to cost around $80 billion — a lot of money, but not so much when you compare it to some of the recent bailout numbers that have been bandied about.
Lansner also says that if you like his idea, you may want to consider re-instituting some of the interest deductions we used to enjoy — deductions for interest paid on auto loans, credit cards, student loans and the like that went away in the mid-1980s.
Want to learn more? Visit his column: http://www.ocregister.com/articles/tax-mortgage-interest-2229103-costs-home
What do you think — are there benefits that would apply here in Pinellas County?

Counters

Tags: real estate, taxes

Autoway Dodge closes

There I was, driving down US19 this morning just south of Gulf-to-Bay Boulevard in Clearwater, when I noticed something missing. Something big. In fact, a whole major-league-sized auto dealership had simply evaporated.

Autoway Dodge took up a pretty good chunk of expensive commercial real estate on the southbound side of US19 in a pretty big neighborhood of car dealerships. Monday, Autoway Dodge was still there; today, just two days later, the place was empty.

If you own a Dodge automobile and you have had your service done at Autoway Dodge, don’t dispair; the franchise has been purchased by Dayton Andrews Chrysler, which is just a couple of miles away on the north side of Gulf-to-Bay Boulevard, just west of US19. Dayton Andrews says it will take over the sales and service from Autoway Dodge, but won’t be buying that big chunk of expensive real estate.

Dayton Andrews has plenty of Dodge experience — it owns a Dodge dealership down in St. Petersburg. In fact, even though I live in Palm Harbor (in North Pinellas County ), I bought a Dodge from them a few years ago and had good luck with it and them.

Autoway Dodge is the second Autoway dealership in Tampa Bay to close down in recent weeks. Autoway Chevrolet of Tampa Bay, over in Tampa, closed a week ago.

Tags: North Pinellas County

Bank sues developer over home sites

Interested in building your dream home in Florida? Here’s an opportunity to buy a lot — cheap.
Wachovia Bank is suing Tampa developer Metro Development Group for $175-million, money the developer borrowed to buy distressed home lots that builders no longer wanted.
Metro Development was apparently betting that land prices would rebound, and that new home construction would be much improved by 2010. So, they borrowed millions and used the money to buy up about 9,000 Florida home lots. Home construction companies like Lennar and M/I Homes were only too glad to unload much of their home lot inventories to raise needed cash.
In all, Metro Development has accumulated around 30,000 home lots in a number of Florida communities.
Of course, as we all know now, the depth of the housing downturn is much deeper than what we may have previously thought. For Metro Development Group, that means the home lots they thought would be producing revenue by now are still languishing — and still dropping in value.
It’s not the first suit to be filed against Metro Development. Contractors, other banks and other businesses have sued Metro Development as well.
So keep your eyes on Wachovia — it may soon be the proud owner of lots and lots of lots.

Tags: Add new tag, developer, home sites, Market Trends

How things have changed

Here’s what I was telling buyers about three years ago:

“Do you like this house? If you do, you’d better act fast. Houses are staying on the market just a few days. The market is extremely overheated. Someone else will make a good offer and it will be gone.”

Here’s what I’m telling buyers now:

“Do you like this house? You may be able to get it at a really good price. In this market, many buyers are open to any reasonable offer — even unreasonable offers. It’s a great time to negotiate. So let’s negotiate.”

Tags: Market Trends, North Pinellas County

Gov. Crist is going after Florida’s property tax rates

Gov. Charlie Crist delivered his State-of-the-Union address yesterday to the members of the Florida legislature. And he continued to hammer hard on the notion of tax relief.

Crist told the legislators that property tax rates in Florida are out of control. He said the legislature should come up with proposals to reduce property taxes — and then put those proposals before voters for their approval before the end of the year.

“The American dream of home ownership is being crushed under the weight of property taxes,” Crist said. “It will require bold and decisive leadership to reverse this trend and make the Florida dream more affordable.”

Crist says he has some ideas of his own for lowering property taxes. But he also said he’s interested in hearing the ideas of others. But he was clear in saying that he wants Florida voters to get a chance to approve or disapprove the plan that legislators come up with. That may be harder than it sounds — it will take a three-quarters vote of the legislature to get a special election scheduled in a non-election year.

Crist has only been in office since the first of January, but he’s already taken some actions that should be welcome news to homeowners and prospective homeowners. Recently, he demanded that the legislature pursue lower homeowner insurance rates, which had skyrocketed. The result was a plan that should lower premiums significantly statewide.

Tags: property taxes

Good news about homeowners insurance

After months of steep increases in homeowners insurance rates, it looks as though Florida homeowners may finally be getting some relief.
State insurance regulators are saying that property insurance premiums will soon be cut around 25 percent. The rate decrease will apply to owners of single family homes as well as to owners of mobile homes and condos.
The actual amount of the decrease will vary from region to region within Florida, but in the Tampa Bay area the decrease should run between 18 and 35 percent. The biggest local decreases will be right here in Pinellas County.
Actually, the decreases will apply only to the part of the homeowners policy that covers wind damage. But that’s okay — the wind damage clause in coastal areas can be as much as 50 percent of ther total premium.
The insurance premum savings are a result of a state law enacted around the first of the year. The law allows insurance companies to buy more “re-insurance” from the Florida Hurricane Catastrophe Fund, which is a state-backed agency.
Homeowners insurance rates went up steeply in Florida after the state experiences a couple of bad hurricane seasons. Insurance companies raised rates and also cancelled thousands of policies.
Those increases, along with rising property values and increase property taxes, had a chilling effect on home sales in Florida. But the lower insurance rates should serve as an important stimulant to home sales.
A good deal of credit for the lower rates belongs to Florida’s new governor, Charlie Crist, who took office in January. Crist made it plain that insurance rates needed to come down, and apparently the insurance companies and others were listening.

Counters

Tags: Homeowners insurance