As a service to our clients and friends, this is part of a series of "inside the industry" bulletins on the Tampa real estate market. We go beyond the headlines to give you an analysis that you won't find in the news.
Q: When is our real estate market going to turn around?
A: To get to the answer, let's look at an example--let's take a large section of New Tampa, from I-75 to County Line Road:
- 450 single family homes under $300K for sale in New Tampa (I-75 to County Line Rd.)
- 197 are bank-owned or short sale candidates (46%)
- Of the remaining 253 homes, four out of five are priced at least 10% over market value, giving them little chance of selling.
- Some short sale candidates and overpriced homes that don't sell will become bank owned.
- Of the homes priced within 10% of realistic market value, 80% are bank owned or short sales.
What does this mean? Because the bank owned homes will eventually all be reduced in price until they sell, this exerts downward pressure on all home prices, even those of undistressed homeowners. This inventory exceeds current demand for over 12 months, assuming nothing else comes on the market. Given the supply and demand, we predict that this downward pressure will continue until 2010. However, this is part of the normal up and down of a natural cycle. Sales have picked up as buyers and investors are finding value once again in the market. Real estate investors are returning from the sidelines and adding property to their portfolios.
As we all know, Tampa homeowners have lost millions of dollars in home equity in the past two years. This is an unavoidable but natural part of a cycle that has played out many times in history. What is more painful for us to witness are the cases where sellers have lost thousands upon thousands of dollars in the past year due to receiving unrealistic or inexperienced advice. In a difficult market such as this, neither buyers nor sellers can afford to get unrealistic, incomplete, or naive real estate advice. If you know of anyone who is considering entering the real estate market this year, please contact us as soon as you can. We have helped hundreds of sellers and buyers over the years navigate through these cycles, and it is our mission to help as many families as we can in these challenging conditions this year.
We're here to help you stay on top of the market. Whether you are in the market or not, let us serve you as a trusted personal resource:
- FIRST, keep on top of the changing home values in your own neighborhood with our free, state-of-the-art Market Snapshot emails.
- SECOND, we commit to keeping you ahead of the curve with inside the industry real estate bulletins like this one.
Anyone who is a current homeowner, or is considering purchasing a home or investment property will appreciate these monthly reports. If you have friends or family who would like to receive our bulletins (or Market Snapshots), just provide us with their contact information.
- THIRD, are you taking full advantage of the opportunities in today's market? Thinking of selling, refinancing, buying investment or foreclosure property? Schedule a 30 minute consultation with us to examine your options.
