Home Prices - what it means

If you are under a rock, you probably missed the headlines this week about the median price dropping this month. For the rest of you, let's review this a bit and see what I think it means. (for what it is worth).

These numbers represent all of Tampa Bay so this includes Pasco and Hillsborough counties in addition to Pinellas county. I will post the Pinellas numbers a bit later, I hope. I don't like to include or really review Hillsborough and Pasco counties because those areas include new subdivisions where hundreds and hundreds of similar homes are slapped together side by side. In Pinellas county, we don't have the space for that and there is a bit more of a destination or resort market influence in Pinellas. Out of state or out of Country buyers don't seek out track homes in Meadowview Grove Pines that is surrounded by Target, Publix, and an interstate. Of course, someone can find an exception. South Tampa and the Pasco coastline may be the exception in those areas.

enough said. Looking at the numbers as a whole is still an indicator of the regional market and they aren't good for many home sellers who have the paper money thoughts like the dot.com option days (I have been there, my friends). Median home prices are going to fall below $200,000 for the first time in 2.5 years, based on the article. The median in September was $200,700 - a 10% decline from the previous MONTH, and a 9.6% decline from 2006. Sales of existing homes, a better indicator, is down 39.7% from September 2006. Remember, this was down significantly from 2005 as well.

So, what does that mean? Well, for sellers it means you better make sure that your home is in great condition, shows very well, and is priced spot on - and then you have a chance of selling. I have been telling my clients all year that this is still a good market (and I have over 20 happy clients who have sold their home this year who can tell you the particulars), if - and it is a huge IF - the property is in the best possible position in the marketplace.

what exactly does that mean I hear you asking. Well, in my humble opinion, it means that if it has any functional 'issues' - it may not sell. At any price. Wow, that sounds strong, but we are seeing it play out daily. if the house is in a poor location - major issue. If the house is dated - major. If the house was remodeled cheaply - major issue. I hear Sellers tell me every day that the Buyers can overlook all of that and see the potential. Well, with over 18000 properties on the market in Pinellas county alone, they don't need to have vision unfortunately. They need patience to see all of the appropriate homes and they will buy the best one and try to get it at the lowest possible price. Very simple economics, really.

I had a potential client tell me the other day that my price recommendation was low so that it would be easy for me to sell it quickly. That may be true for some agents out there, probably too many, but if you look at what I have sold this year and for what prices you will see them among the highest price per sq foot etc... I just closed one that was sold for $290/sq foot. it is literally a few houses down from one that is listed at $178/sq foot and isn't selling.

I had to calm myself down, count to ten, and then review the market and her competition and after thinking about it more, Lee Ann and I decided to withdraw our proposal and decline the business. Let someone else list it for too much, watch it sit there for months and months and months, and then it may (MAY) sell next year for less than our target price. I wish I could bet someone money on some of these. See, in this type of market and in our society, we need someone to blame.

when prices were soaring - it was the Realtors' fault. Greedy, commission, all the rest. Well, now the prices have tanked. guess whose fault it is? you bet, ours. those darn licensed agents who are working hard to promote the home inthe best way possible, suggest a strong sales price, and have the sellers say "but I won't make my magic number after it sells". If we took out our commission - well then we are talking. That is the secret, the Realtor commission is what is wrong with the market. If you would simply deduct the $15K from that $275,000 house it would sell!!!! Sure, for $195,000.