Davis Islands April Market Summary

The month of April brought continued activity on the real estate front for Davis Islands.  From a statistical perspective we saw 6 homes closed during the month, 8 homes go under contract and 12 new properties hit the market.  Currently there are only 66 homes for sale on Davis Islands, this is substantially lower than the high 90’s number we hit last year.  We believe that as the year progresses we will continue to see price stability and lean inventories on the Islands.  The chance to get a great deal on an Islands properties has come and gone for now in our opinion.

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Tampa Existing Home Sales Rise in March 2010

Tampa Real Estate Market/National Real Estate Market

Tampa Existing Home sales for the month of March were up.  The numbers came in at 2,782 homes sold from 2,050 in February, which is a nice 21% increase.  From a sales price perspective the median sales price was $131,400, which was down 3% from last year, but up month over month from February’s number of 128,100

National Sales of Existing Home (Single-Family & Condo) for the month of March.  The numbers came in at an annual adjusted rate of 5.35 million up 6.8% from a level of 5.01 million in February.  The March 2010 numbers came in about 16.1% above March 2009 numbers.  It seems that coming expiration of the Home Buyer credit, set to expire at the end of April, was the primary driver.

Our Perspective:  While existing home sales improved for during March from February due to the home buyer credit, we feel this will continue going into the summer months.  Summer is typically a strong selling season and we should continue to see improvements through August.

Davis Islands 1st Quarter Market Summary

DAVIS ISLANDS: TAMPA, FL REAL ESTATE

MARKET PRICE TREND: FIRMING
MARKET ACTIVITY TREND: UPTRENDING

Click for detailed real estate sales

The first quarter of 2010 is behind us and what a change from a year ago. The stock market is soaring, homes are selling and business is hustling. As reported last quarter we predicted a strong 1st quarter of activity due to both the home buyer tax credit extension and low interest rates, we were not disappointed. While the credit certainly moved buyers off the fence, properly priced properties moved quickly, some even with multiple offers. We believe that the second quarter will bring increased home sales, firming of prices and a shrinking of inventory. In fact, we have a number of ready and able buyers with specific needs that the current supply of homes has not meet. As always if you ever have a question on your Davis Islands home feel free to give us a call (813) 391-9240.

Cristan & Jennifer

Why Lower New Housing Starts are a Great Thing!

Each month we see statistics from the government on New Housing Starts.  In traditional times a positive number month over month and year over year is a great thing, but not this time and here is why.

First, as anyone in the industry knows we have a glut of existing homes on the market.  In fact many of these homes were constructed within the last 3 or 4 years and some have never been lived in.  With housing starts staying down, this allows the excess inventory to burn off.

Second, most new housing starts, particularly in Florida begin in new subdivisions or part of tract housing.  These new developments put added pressures on cash strapped local governments to provide infrastructure, particularly for governments that have poor comprehensive plans in place.  The focus now should be on density and filling in existing homes, rather than starting new communities that contribute to both urban sprawl and infrastructure pressure.

Third, in my opinion sales of existing homes rather than new construction homes provide an immediate impact on our economy.  While, new construction provides construction jobs, the sale of an existing home can boost both construction jobs and other areas immediately.  Areas of immediate impact occur for real estate agents, title companies, mortgage lenders, attorneys and accountants.  Rather than waiting for a 6 to 8 month construction of a new home and existing home can close quickly and the economic benefit is immediate.

So while we see this month’s new home construction numbers fall, take heart, this is actually a great sign.

March is Household Inventory Month

Many people purchase homeowners or renter’s insurance and believe they are covered if theft, fire or flood occurs.  However, inorder to submit a claim to an insurance company you will need to provide an accurate Household Inventory list.  With the days of digital cameras and smart phones this makes the process so much easier than in years past.  Here are the steps you need to take inorder to make sure you can maximize your insurance claim.

1) First go room by room, taking either video or digital camera shots of the entire room.  Next take shots of individuals items of values (computers, tv’s, dvd players, printers, guitars, jewlery, bikes ,etc.).  Remember to open up drawers and closets, ensuring that you record everything you have.

2) After each room, write down the names of all major items first, then smaller items (record model numbers and/or receipts)  This process will take the longest, but is essential to show proof of ownership when requested.

3) After you have finished with the entire house, make a backup copy of your electronic pictures/video and your written list (including receipts).  Place these in a fireproof safe, safe-deposit box or other secure location off-site

4) Rember to update your list whenever you have new major purchases, this way you are always up-to-date.  Then on an annual basis review your entire list for items removed or missing.

For a downloadable inventory checklist visit AAA.com

The coming Storm of home PURCHASES?

Batten down the hatches, lock the doors and cover the windows, the deluge of home PURCHASERS are about to start flooding the Tampa Home Market.  While the doom and gloom of the real estate market has been loud and clear for some time, this is about to change for the better and in a big way.  The reality is that there are a significant number of buyers in the market today and more are lining up.  I fully believe that the pool of buyers will only surge in the next three quarters, and here’s why.

First, there are both major and minor investors that have been picking up properties in the truck loads for cash.  These investors are not looking for the standard property flip; rather they are taking pools of money, buying foreclosed properties and renting them out for the considerable cash flow potential.  As these property purchases occur inventory shrinks and the supply/demand line re-balance.

Second, there are many individuals that have been prudent during the last 5 to 7 years in regards to their finances.  Sure we hear stories about homeowner X and Y that are underwater on their mortgage or can’t pay their current debt.  However, there are even more individuals that did not extent themselves with homes they could not afford, or debt they could not repay.  In fact, a recent survey by the Mortgage Bankers Association pointed to 20% of home loans in serious delinquency or foreclosure.  While this number is high by historical perspective, there are still 80% of borrowers making things work.  These people saved their cash, invested in cash producing assets and/or lived within their means.  While times may have been difficult they reduced their outflows and maintained their budgets.  These same individuals now have the ability to put their money to work and they are looking for deals.

Third, the unemployment numbers and household income numbers are expected to reduce and increase respectively.  As people become employed and increase their income they tend to seek homeownership.  Homes currently on the market are affordable at a number of different income levels and as long as the properties are priced correctly buyers will buy.

Fourth, as existing sellers see properties around them sell, they will wonder why their own home is not moving.  This will force those sellers to either remove their home from the market (reducing supply), or lower the price of the property to be inline with market conditions and thus reaching buyers price point (increased demand).

The time has come, the deals are here and the opportunities are among us.  Buyers that see a deal need to take it or risk losing it.  While many might think this is a real estate agent’s self serving plug, the reality is that the smart money does not wait until the masses decide it is time to buy, they lead the pack!  Put on your coat, get your umbrella and brave the Buyer Storm that is approaching.

Tampa Real Estate Home Prices Feb 10

Today the S&P/Case-Shiller Home Price Index has been released.  For Homes in Tampa we saw a (-.6%) decrease from November 09/December 09.  This was a slightly large decrease than the October 09/November 09 decrease of (-.4%), however prices are basically flat.  In a year over year perspective in the Tampa Real Estate Market we saw a (-11%) decline.

At this point in the real estate cycle we are not surprised that prices are tending to stay flat or firm.  As we stated last month, we clearly are seeing many cases of multi offers on well priced properties and this is keeping prices firm.

BUYER PERSPECTIVE

It is worth repeating again that if you are buying homes in Tampa, and the offer price of the home is priced well, you need to be aggressive going after that property.  While you can certainly put in offers well under list price, the odds of the offer being accepted for newly listed homes is unlikely, there is probably another buyer either infront or right behind you willing to pay more

SELLER PERSPECTIVE

If you are selling homes in Tampa you need to price right to attract attention.  We continue to see many homes that receive multi-offers if the agent properly prices the property to sell.  For those sellers waiting on the sidelines or do not have to sell, we recommend waiting it out.

The Bubonic Plague of Housing?

 The Bubonic Plague of housing is know by another name, Condos!  Foreclosures abound, associations running deficits, folks leaving units abandon in droves!  The daily news stories are plentiful on all the reasons why NOT to purchase a condo in this market.  In fact, the Tampa real estate condo market has taken its own share of bloodletting, with more condo’s going to REO’s or short sales each day.  So why with a market in such frantic free fall would anyone in their right mind purchase a condo property? It’s simple, “investment opportunity”!

I am sure there are a number of naysayers rolling their eyes.  They are probably thinking to themselves “He is just another real estate agent pumping up properties to get a sale”.  The reality however is that the proof is in the pudding or in this case the numbers.  Now, before the critics speak up lets get something straight.  I am not suggesting that folks find any condo and things will be great, this would be insanity. What I am suggesting is like with ever other investment opportunity you have to run the numbers and look at the facts.

There are three specific criteria I look for when evaluating potential condo investments; the financials, the location and the construction or F.L.C.

The Financials:

Do the property numbers make sense?  I immediately look at two specific numbers hoa fees and rental rate potential. High hoa fees can be a killer for making a profitable investment and low current or future potential rental rates in the area are a nonstarter. Next, take a look at the amount of reserves the association has set aside for future capital improvements and their reserve roll estimates for these capital expenditures. If these look good next review the associations allowance for bad debt on hoa fees and unpaid unit hoa fees, these numbers should be low. A high bad debt number can mean financial ruin for the complex. Next, are there any special assessments coming down the pipe. Nothing can be worst then purchasing a unit, only to find you need to pony up another $10K to cover repairs. Finally, can the unit be cash flowed and garner a strong return on investment. Cash flow is critical, if you can not generate a positive cash flow you need to walk away and keep looking.

The Location:

As with any real estate purchase, location is critical. Finding the right location can mean the difference between success or failure in your investment. One positive note is that in certain markets condo developments were built in areas that were being revitalized. If the revitalization takes hold your investment can certain increase in value over time, if not you could be in for some difficult times. A good way to help assess the strength of the revitalization process is to understand the continued commitment by city or county governments to further invest in the area. Other important considerations are the emergence of bulk distressed buyers and the strength of the neighborhood associations.

The Construction:

During the days of condo gluttony, it was less about the construction of the property and more on how fast the units could be built. In many markets frame/stucco or frame/siding became common place; however there were many complexes which were built with concrete block or brick. I am of the opinion that concrete block/brick construction is the smartest move for condo investors. First, in my opinion these complexes hold up better to external wear and tear, thus reducing future exterior improvement costs. Second, they tend to be more desirable for renters; with strong unit noise insulation as well as being built in desirable urban dwelling locations.

One final note, in this real estate market many lenders will not even finance condo purchases, so cash is king.  The benefit of this is that banks holding these REO or short sale condos are taking substantial discounts to get the units off their books.

About the Author

Cristan owner of Fadal Realty Group of Century 21 Fisher & Associates, a real estate firm in South Tampa.  He works with buyers, sellers and investors in the real estate market and can be reached at www.dwellintampa.com

Fannie to pay closing costs on foreclosures

Fannie to offer closing cost aid on foreclosures

WASHINGTON – Feb. 1, 2010 – Fannie Mae, the largest provider of residential home funding in the United States, announced on Friday that it would start to pay closing costs for buyers of foreclosed homes in its inventory. Buyers of qualified properties will get up to 3.5 percent in closing costs or an equivalent amount for the purchase of new appliances.

Fannie wants to clear out the nearly 50,000 properties it has in inventory – listed on HomePath.com, the Web site created by Fannie Mae last year to sell the growing number of foreclosed homes. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010. Applicable properties can be found on HomePath.com, along with property descriptions, photographs, community and school information, and more.

In addition, some Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers qualified homebuyers the ability to purchase with as little as 3 percent down.

“Attracting qualified buyers to the market and reducing inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover,” Terry Edwards, executive vice president for credit portfolio management, said in a statement.

© 2010 Florida Realtors®

Tampa Real Estate Home Prices Jan 10

This morning the S&P/Case-Shiller Home Price Index has been released.  For Homes in Tampa we saw a (-.4%) decrease from October 09/November 09.  This was a smaller decrease than the September 09/October 09 decrease of (-1.6%).  In a year over year perspective in the Tampa Real Estate Market we saw a (-13.2%) decline.

At this point in the real estate cycle we are not surprised that prices are tending to firm.  We clearly are seeing many cases of multi offers on well priced properties and this is keeping prices firm.

BUYER PERSPECTIVE

If you are buying homes in Tampa, and the offer price of the home is priced well, you need to be aggressive going after that property.  While you can certainly put in offers well under list price, the odds of it being accepted for newly listed homes is unlikely, because there is probably another buyer either infront or right behind you willing to pay more

SELLER PERSPECTIVE

If you are selling homes in Tampa you need to price right to attract attention.  We continue to see many homes that receive multi-offers if the agent property prices the property to sell.  For those sellers waiting on the sidelines or do not have to seller, we recommend waiting it out.

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