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Tampa Bay real estate market: Sales up, but values down

The thing that continues to be pretty clear about the Tampa Bay real estate market is this: Home sales are continuing to make a nice comeback, but home values are still slipping and sliding.

You’d like to think that the trend of declining values is nearing the bottom. But just when we think that, another month comes along and values decline a bit more.

One good source of home value information is the S & P/Case-Shiller Home Price Index. Recent numbers from that index showed that home values in January in Tampa Bay were down 4.4 percent from the previous month. That’s a pretty steep drop for a single month, especially when you consider that the home value peak was in July of 2006, almost three full years ago.

Case-Shiller says that prices in this region (the region being Pinellas, Pasco, Hillsborough and Hernando counties) have dropped 37.3 percent in that nearly-three-year period.

So what is propping up sales when values are still going down? There’s several reasons:

GOOD PRICES: According to Case-Shiller, home prices in this area in January were just about the same as prices were in February 2004.  How often can you buy homes at five-year-old prices?

GOOD RATES: Mortgage interest rates are very, very low. How often have you seen the one-two punch of low home prices and low, low interest rates?

FIRST TIME HOMEBUYER ADVANTAGES: If you already own a home and you are either upside-down or have lost much of your equity, you’re not in much of a position to buy a move-up home. But if you are renting and don’t currently own a home, this is a GREAT time to buy. And first-timers are very much in the market right now.

TAX CREDIT: If you are a first time home-buyer (or haven’t bought a new home in the past three years), there is a big fat $8,000 tax credit out there just waiting for you.  When is the last time THAT happened?

SELLERS ARE WILLING TO NEGOTIATE: If we had already reached the bottom of the market and prices were going back up, sellers would be saying something like this: “Time is on my side. The more I wait, the higher my selling prices is apt to be. Why should I give anything away?” Instead they are saying things like this: “Prices are still going down. God knows where this is going. I NEED TO SELL! Bring me an offer, and don’t be afraid to ask for anyhing! Go ahead, try me!”

Of course buyers are in the market.

So we’ll be waiting a bit longer for that end to the home price slide. But in the meantime, homes are selling anyway.

Tags: pinellas county, real estate, sales, values