Tampa Bay area real estate update

Homes in the Tampa Bay area are now selling for the same prices as ten years ago. August continued the slow downward price slide to $89 per square foot. That is 7% lower than last August and 4% lower than July. An average home lost $13,000 of its sale price. The number of homes sold increased by 2% but the total number of listings decreased by 1.5%.

The price decline in the greater Tampa area has been relentless. July home prices were down 3.6% from a year ago. June saw a 2.52% decline. Prices for May were 4.74% lower. The statistics remain very similar whether distressed property sales are included or excluded. Nearly 50% of all existing home sales in the area are now distressed properties. The Tampa area has seen slightly smaller price declines than Florida as a whole and prices have leveled off when averaged nationally.

Pinellas County was hardest hit in the Tampa Bay area for August. Sales of single family homes decreased by 8.1% for the month. Sales price lost almost 5% compared to the previous year. Average home price for Pinellas dropped to $135,000. While condominium sales in Pinellas were up 8.1% for August the median sale price of a condo lost 17.2% compared to a year ago.

Budget and staffing cuts within the Pinellas County, Florida government are affecting real estate and real estate investors. Starting October 4, the Pinellas County foreclosure auction will go on-line, replacing the current live daily auctions at the Clearwater and Saint Petersburg courthouses. The monthly tax deed sales will follow on October 20. Moving these auctions on-line will ease pressure on staff in the Clerk of the Court’s office. Pressure has not let up this year as foreclosures in Pinellas County continue to roll in at the rate of 1,000 per month, only very slightly below the rate for 2009.

In Clearwater, the City Council members have voted to purchase an entire city block in the East Gateway neighborhood. The decision was unanimous. The $1.675-million purchase will be funded by a $1.9-million loan from Clearwater’s Central Insurance Fund. Immediate plans are to put the purchase in a land bank. The city will decide what to do with the property at a later time. Involved is 2.2 acres of land with buildings including two motels, a restaurant, two duplexes and a single family home. This is a high crime area bordered by Cleveland Street, Grove Street, Betty Lane and Lincoln Avenue.

Tampa Bay Real Estate Update

New foreclosure filings slowed slightly in July in the Tampa Bay area. There were 6,031 new filings. It is definitely a buyer’s market. Prices continue to slowly erode and have not yet reached a bottom. Florida existing home sales dropped 14% compared to July 2009, but condo sales were up 11% on a median price barely above $87,000.

In Tampa, The Towers of Channelside have received Fannie Mae approval. Almost three quarters of the 257 luxury residential condominiums have been sold along with four of the five retail units at street level. Marketing and sales are handled by JMC Realty Inc. The development consists of two 28-story towers in the downtown Channel district. Fannie Mae approval should make for quicker qualifications and closings on the remaining units.

An informal drive-around survey of Clearwater, Largo and northern St. Petersburg shows no slackening of real estate investor activity as revealed by bandit signs. Prices continue to decrease on these properties as well.

Removing texture from a ceiling 1

The current rehab project has one “bedroom” that was originally a screened sun-room. There is an original exterior-wall window still in place between it and the living room. The interior walls were ¼” exterior-grade plywood shot with heavy plasticized popcorn texture, but the joints were all cracking anyway because of wall movement from inadequate framing. The ceiling had a heavy coating of conventional popcorn texture and also had some quality issues. There were only three receptacles all on the same wall. The room had no door and there was no closet.

The latest step of this rehab was the removal of the ceiling texture to allow refinishing to a smooth surface. I had never done this particular job before and received a very helpful hint from a fellow investor and TBREIA member that most textures could be lightly dampened with water to soften them and then either flattened or removed with a dull-edged trowel. I was a little skeptical but decided to give it a try for lack of any better options. I did not want to remove the ceiling unless absolutely necessary.

I used an old window-wash spray bottle filled with plain water to mist the ceiling in 2’x4’ sections and gave it five minutes to soak in. It worked like a charm. Instead of a difficult, dusty, all-day job the ceiling was ready for refinishing in 2 ½ hours.

Rehab update

I continue to make progress on the rehab on Ewing Avenue in Clearwater. This morning I finished the electrical(six new boxes and receptacles on two different circuits) in the rear bedroom. The new framing is also complete and ready for sheet-rock to go up. Tomorrow the new closet doors will be installed and I will start removing popcorn texture from the ceiling.

It looks like I will be able to start putting up the new sheet-rock by Wednesday, maybe not until afternoon. I want to be able to do the bedroom and the new kitchen ceiling at the same time so that I can tape all of the joints at the same time. Then those two rooms plus the front bedroom can all be painted together as well.

After that will come the bathroom. The plan now is to tile the entire room from floor to ceiling. A new vanity will be installed along with new plumbing fixtures. The ceiling still needs a thorough check but will probably come down and be replaced with fresh sheet-rock and light fixtures.

I will continue to shoot short videos as this project goes along.

Federal mortgage help not working

In its latest report, the Congressional Oversight Panel notes that the programs initiated by the Treasury Department to help homeowners facing foreclosure have not been effective. Fewer than 200,000 people have been permanently helped by the programs so far. I do not think this should be a surprise to anyone.

What incentive do the banks have to help homeowners facing foreclosure? The government bailed them out and continues to offer help as more foreclosures pile up. Participation in all of Treasury’s programs so far has been voluntary for the banks. A new requirement that loan servicers explain to homeowners why their loan modification has been declined is not going to increase the number of modifications. New efforts to get banks to write down principal loan amounts to bring loans in line with actual house values has gained no traction, even with one out of four mortgages currently being upside down.

What incentive does a homeowner have to apply for help through these Treasury Department programs? With second mortgages, credit cards, car loans and other debt, most homeowners would still pay nearly 60% of their income towards debt service even with reduced first mortgage payments. If they do attain a “best case” 5-year payment reduction, the homeowner will probably still be upside down and looking at higher payments once again.

Lenders and borrowers both seem slightly confused by the trickle of modifications to existing programs and new programs that keeps coming from Treasury. No-one seems to know whether to try to modify a mortgage now or wait a few months to see if something better comes along. Homeowners have seemingly been stuck in a non-stop cycle of applying to lenders for help, being denied after multiple delays and then being encouraged to apply for help again under a new or changed program, only to be denied yet again.

Meanwhile, more and more homes are foreclosed upon. Housing prices seem to be stabilizing in parts of the country but are still plummeting in some major cities. And the banks are once again profitable thanks to the federal government bail-outs.

Real estate investors are still doing well

I have spoken with a couple of other real estate investors working in the Tampa Bay area the past few days. Needing advice on a rehab, I was able to ask someone that has specialized in that area of investing for a long time. A meeting with another investor and friend to catch up on a few shared deals led to looking at several houses in Tampa and dinner.

The rehab specialist works mostly in Pinellas county. He has not had any problems finding distressed houses for good prices. Buyers for the updated houses have not been a problem, either. This investor likes to do “complete” rehabs, replacing all kitchen appliances and cabinets, bathroom fixtures and tile and all floor coverings as well as any windows, doors, etc… that are not in good repair. He likes to sell “the nicest house on the block”, no matter what it looked like when he bought it. Most of the work is done by the investor himself.

The other investor works mostly in Hillsborough county and used to mostly wholesale properties. He has transitioned into rehabbing most properties during the past six months, seeing it as a way to make the same amount of profit while buying and selling half as many houses. He also sees no shortage of good deals on rough houses or buyers for the repaired homes. The plan for these properties, though, is to do the least possible work to make the house presentable to a buyer and keep the selling price in line with short-sales in the area. All of the repair work is hired out.

Both of these investors noted that good labor is available at bargain prices now. The virtual halt of new home construction has left a large and idle pool of skilled workers looking for a job. This will not last forever but is helping real estate investors now.

The two investors also noted fewer properties on the market. Buyer demand has increased and they thought the flood of new foreclosures into the market had slowed slightly. Realtors I spoke with have noted this smaller inventory, too.

Eco-friendly straw bale house construction

A lot is heard lately about “green” home construction and houses that are “eco-friendly”. Most of the homes in question use conventional frame construction with more insulation, more efficient electrical appliances and low-flow water fixtures. Truly earth friendly house construction goes well beyond these measures.


A popular “green” construction method in the western US is the straw bale house. This technique is starting to gain popularity across the country and worldwide because of its ease of construction and use of an agricultural waste material. More states and cities are adding straw bale construction codes every year.


Straw bales used for home construction must have less than 20% moisture content and be tightly compacted(they should not bend if lifted by one string). This also makes the bales quite fire resistant, as they contain little oxygen, especially after being encased in plaster and/or stucco. A bale home has approximately three times the thermal insulation of a conventional frame home. Sound insulation is also much better that with typical frame construction. Another advantage of straw being a natural material is no off-gassing, which can be a problem with many insulating materials for sensitive people.


People often wonder about the durability of straw bale structures. Because they are encased in waterproof stucco on the outside and “breathable” plaster on the interior, the bales are fully protected from water and do not rot. The highly compacted bales have low oxygen content and are much more fire resistant than conventional construction. Bale homes survive well in high-wind and earthquake zones. Many straw bale homes from the 1800’s are still standing in Nebraska and Europe.


Many resources are available to learn about straw bale home construction on-line. Many books have been published on the subject as well. Straw is an agricultural waste product in many parts of the world and is often burned, adding to the greenhouse gas problem. More bale-friendly building codes could help both the earth and home owners.