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.

Recent random real estate thoughts

Florida licensed real estate sellers should be getting a settlement from BP. After negotiations between the Gulf Coast Realtors Association and BP(via government rep.), it was agreed that all states bordering the Gulf of Mexico would get a payout based on the amount of home sales commissions lost because of the oil spill. The amounts have not yet been decided.

As expected, both new and existing home sales plunged to new depths after the expiration of government tax credits. This has happened despite a near-record low 30-year fixed rate mortgage interest of 4.21% in Florida. 15-year rates are now well below 4%. But people still are not buying. Many are no doubt waiting for both home prices and mortgage interest rates to go even lower, which it looks like they probably will.

The rate of new foreclosures in the Tampa Bay area does seem to be leveling off. This fact has done nothing for the backlog of homes already in foreclosure. Hillsborough County started running two-per-day foreclosure auctions at the courthouse this month and will continue through the end of the year. The intent is to deal with the 36,000 to 38,000 foreclosures already in the system. Any guesses what this is going to do to the housing inventory and pricing in the area?

All of the federal government’s programs designed to help ease the housing mess continue to be unmitigated failures. The feds just can’t seem to figure out that as long as these programs remain voluntary and continue to help the banks more than the homeowners that the banks are not going to cooperate. There is just no financial incentive in any of these programs for the banks to help the homeowners. As long as banks continue to make the most money(or lose the least) by following through on foreclosures, that is what they will do. They bankers are not going to renegotiate lower interest rates or reduced principal amounts just because they are such swell people and it is about time the government figured this out.