As the chart shows, the index had been on the rise through the summer months, but September started a new downward trend, so it seems.

Some notes  from the Case Shiller press release:

“The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.”

“Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes – those included in the S&P/Case-Shiller Home Price Indices – have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010.”

And here in Tampa, sales are up and inventories are down, so why the further decline in the index? I think it can be explained due to the fact that a larger percentage of what’s selling more recently is the distressed stuff, short sales and bank-owned properties. As I posted earlier this month, a much larger percentage of our pending listings is made up of short sales and bank-owned properties.

Looking forward, as first-time buyers return to the market to beat the looming tax credit deadline, I would expect that prices remain flat or even begin to bump upwards once again. But the lens in the crystal ball has been quite out of focus as of late. We’ll see.

Case-Shiller Press Release

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1. Keller Williams Realty
2. Coldwell Banker Real Estate
3. RE/MAX International
4. Century 21 Real Estate
5. Prudential Real Estate
6. Sotheby’s International Realty
7. EXIT Realty
8. ERA Real Estate
9. Weichert Real Estate Affiliates
10. Better Homes & Gardens Real Estate

Read more

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• The Realtors® Confidence Index Survey estimates distressed property sales (foreclosures and short sales) on a monthly basis at the national level.
• The Survey is based on responses from approximately 1,500 Realtors® to an ongoing monthly survey; estimating error is in the neighborhood of 1 percent.
• The November Survey reported that total distressed property sales declined from 49 percent of total sales in March to 33 percent of sales in November.

Graph Above: Foreclosures and Short Sales as a Percentage of Total Sales (Nationally)

Real estate is local however and the Tampa market has not necessarily been a reflection of the national market as of late. So what’s happening in our local market?

Well, most notably for me is the fact that over 76% of the current pending listings on our MLS are either bank-owned or short-sale listings. That number had been hovering around 60% for most of the year. But it is December,  typically a very slow month for residential real estate.

So many of the buyers in the market this time of year are investors who are devouring up the pre-foreclosures and the post-foreclosure listings, or at least are attempting to do so. And 56% of those pre and post foreclosure listings purchased in the last 30 days were all cash deals.

Furthermore, 41% of all current Tampa residential listings are short sale or bank owned listings. So not only is demand high for such listings right now, but the supply is still pretty good as well. Year-to-date, 46% of all brokered residential sales were either bank-owned or short sale listings.

2009  Short Sales in Tampa:

• Average days to sell was 237 (about 8 months)
• Average sold price was $154,600

2009 Bank Owned Sales:

• Average days to sell was 78
• Average sold price was $79,500

Data used is from the MFRMLS all brokers/agents included, for city = Tampa.

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The government will pay you to buy a house

Poorly targeted or not, there is a tax credit for both first-time home buyers and move-up buyers. First timers can get a credit up to $8000, while movers-up can get a $6500 credit.

Interest rates at lowest rates ever (Freddie Mac)

This week’s average mortgage interst rate as published by Freddie Mac is the lowest it’s been since Freddie began tracking the data in 1971…..once again…1971! Lowest mortgage rates in 38 years. But hold on. The Federal Reserve (government) has been buying most of the Fannie/Freddie mortgage backed securities, but that’s due to end in the 1st quarter of 2010. Many economists believe this will trigger a rise in rates. The government can’t keep buying these securities. If rates rise a 1/2 point, that’s $76 more per month on a 30 year fixed of $250k (as compared to a 4.71 rate).

Prices seem to be stabilizing

The average price of homes sold actually rose in Tampa in during the summer months, but retreated a little in September according to the Case-Shiller Home Prices Index. If you follow those numbers (I do) the index had been dropping steeply since July of 2006. Hopefully we’ll see some stability (flatness) going forward:

Big lenders believe home prices will remain mostly stable

The CEOs of Bank of America and Wells Fargo seem to believe prices will remain stable for 2010 and that we won’t see any big price plunges. These 2 lenders did almost half of all home purchase and refinance loans in the 3rd quarter of 2009, so you have put some faith in their opinions (maybe they’ll loosen up on lending guidelines as a result of this new found faith for 2010).

Inventory of Tampa homes for sale has plummeted in 2009

From an inventory perspective, there was no better time to buy a Tampa home than in early 2008 when the number of residential real estate listings in Tampa reached a whopping 9100. But much of that has been chipped away, falling throughout 2009 to 5756 listings for sale as of today. But prices have retreated substantially since that peak as well. And let’s be real: While inventory is much less than it was 18 or even 12 months ago, we still have a surplus of listings relative to years past. It is still a strong buyer’s market from a supply perspective.

So it seems a good opportunity right now to buy a home. Prices and availabilty of homes may remain flat, but that record low interest rate may be short lived in to 2010.

We represent Tampa home sellers and Tampa home buyers.

Need assistance or have a question? Call us at 813-421-1895 or send us your question.

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So what’s this mean?

Well, if you’re a Tampa homeowner trying to sell or considering a sale, you’ve got much less competition, generally speaking. If you’re a Tampa homebuyer, you’ve got a lot less to choose from.

How is the decrease explained?

Sales are up in 2009 for all property types. Much of the inventory has been sold. Other listings expired or were withdrawn as many sellers could not find a buyer, or come to terms with the buyers that made offers. Many would-be move-up sellers just could not make the numbers work to pay off existing loans and purchase their next home. Other sellers faced negative equity and did not wish to, or couldn’t bring money to closing to payoff a loan (or loans).

Along with the decreased supply there is increased demand for Tampa homes and condos. The number of pending listings, those that are under contract, has also risen throughout 2009. In fact, the number of pendings today equals that of May, 2006, the tail end of the sellers’ market. The caveat is that about 60% of those pending listings in Tampa are also short sale listings. The median list price of those pending listings is about $116k.

In other news:

Looks like the push to extend the first time home buyer tax credit is gaining traction. There is no doubt the tax credit has been successful in getting first timers off of the fence. But for how long and at what cost? There are a few scenarios being discussed and this should got to a vote soon. For now, buyers must close by November 30th, 2009 to qualify for the up to $8k subsidy from the government.

Data used is from MFRMLS for the City of Tampa, all brokers/agents included.

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