The Lersch Group's Blog

After free falling for more than two years, west Florida homes sales appear to be bottoming out.

April's housing activity presented a cautiously optimistic picture: Sales are stabilizing as home sellers cut prices to entice buyers. Here's some evidence:

• Sales were up from April 2007 to April 2008 in some of the worst hit markets south of the Tampa Bay area. Sarasota, Punta Gorda and Fort Myers-Cape Coral all reported rising sales vs. a year earlier.

• Tampa Bay area single-family home sales slipped 8 percent year to year, but Hillsborough and Citrus counties both reported little or no decline. Although Pinellas County Realtors said sales were down 10.7 percent, condo sales were higher than they've been since June 2007.

• Pending sales, homes under contract waiting to close, were up in April in every county in the Tampa Bay area compared to a year earlier.

"Sales are stabilizing, but they're stabilizing at a level that's still low," University of Florida economist David Denslow said after Friday's release by the Florida Association of Realtors. "But that's better news than having sales continue to plunge."

Higher sales correlated with lower prices. Where prices dropped the most, like Fort Myers, sales spiked. Business in Fort Myers surged 41 percent in April. The Tampa region's median home price is $176,000, 26 percent below the high mark of $239,300 in June 2006.

"Price, price, price is what sells a house. Period," said Nikki Ubaldini, a Palm Harbor real estate broker affiliated with Keller Williams Realty. "Nine of 10 people just want to know they're paying a fair price."

Denslow assumes home prices won't flatten statewide until 2009. And he expects no sustained home price rise until 2011, when the first batch of baby boomers crosses the age of 65.

April sales in Pinellas, Pasco, Hillsborough and Hernando counties totalled 2,087. That's 8 percent below April 2007's total of 2,257. Purchases approximated those of April 1999.

Realtors cautioned that the inventory of unsold homes remains high, which will put further pressure on prices.

"I think it is premature to say that the downturn is over, but I do believe it is nearing the end," Pinellas Realtor Organization president Ann Guiberson said.

Also tempering the optimism is the recognition that many homes changed hands through short sales. That happens when a bank agrees to sell a house for less than the outstanding mortgage. One-third of Ubaldini's current business is short sales.

The market seems most stable in Hillsborough, where the Greater Tampa Association of Realtors reported sales down only a hair year to year, 1,235 vs. 1,249 a year earlier.

Deborah Farmer of Star Light Realty, this year's president of the Tampa association, hopes to press that advantage into what is now the peak selling season.

"If we don't make it in April, May or June, that's pretty much it for us," Farmer said.

Denslow said Tampa's home price retreat to $176,000 positions the region for recovery. It's about equally priced with Tallahassee and Daytona Beach and less expensive than Gainesville.

"The fact that you're now on par with Central Florida and other parts of the Southeast is good news for you," he said.

Falling prices, rising sales

In many Florida metro areas there's been a strong correlation between falling homes prices and rising home sales from April 2007 to April 2008. Here's a sampling:

Tampa-St. Petersburg: Sales, -8 percent, Price change, -16 percent

Fort Myers: Sales, +41 percent, Price change: -29 percent

Punta Gorda: Sales, +6 percent, Price change, -27 percent

Fort Pierce: Sales, +34 percent, Price change, -34 percent

West Palm Beach: Sales, 0 percent, Price change, -17

Sarasota: Sales, +5 percent, Price change, -11 percent

- Provided by St. Pete Times

This just in....

SARASOTA (Bay News 9) -- Sarasota County and city leaders have confirmed to Bay News 9 they are negotiating with the Boston Red Sox.

The team currently holds its spring training in Fort Myers but may be moving to Sarasota. Bay News 9 is told the Red Sox can opt out of their current lease in 2009.

Also, city officials say they're currently discussing whether they'd play at Ed Smith Stadium, the soon to be former home of the Cincinnati Reds, who are moving their spring training to Arizona, or build them a new facility.

Alternative locations for another stadium include the Sarasota County fairgrounds on Fruitville Road, near downtown.

Gus Ameres owns the 12th Street Café across from Ed Smith Stadium. He's worried if the Reds move out and the Sox don't move in, he'll lose business.

But he's not just worried about his profits.

"If they spend that much money to build a new stadium who knows if they will profit," Ameres said.

However, supporters like Sarasota resident and Boston Red Sox fan Teo Sanchez think the team will hit a home run.

"Boston Red Sox is one of the favorite teams," he said. "So I believe they'll bring a lot of people here. They're champions."

Sarasota County commissioner Joe Barbetta said they hope to have a final decision in the next 30 to 60 days.

June 27, 2008

"Heard it Through the Grapevine"

The following are "news bits" that I've heard from various Realtors...
An agent had a client who had their house search narrowed down, the client went home and called a couple of weeks later to start the negotiation process.  Unfortunately, the customer's top three home choices had all been sold!  What's the saying?  "You snooze, you lose!"

An agent has a listing that is 200K below market value,  the agent is going to incrementally increase the price on the listing.  This agent feels now that the prices have "bottomed,"  slight increases are justifiable as the house is already below market value.

One of our builder sales representatives has three customers who have successfully sold their homes up north.

A Realtor had a customer who made two huge low ball offers on two different properties and both sellers turned them down.

If you can pass these stories along, maybe the buyers will realize that NOW is the time to buy, that prices are at the bottom, and that offers need to be respectable.  This will help get the message out that the Sarasota/Bradenton area market has "perked up."

Financing Solutions with David Reed

When $5,000 means almost $30,000

Visit Reed's Website

In the current market, sellers are often encouraged to make some sort of contribution to help sell a property, such as paying a portion of the buyer’s closing costs. In fact, I’ll wager that this tactic is the most common. “Seller to pay $5,000 of buyer’s closing costs!” the listing reads. But how do you stand out if such seller contributions are common in your market?

One way for your listing to rise above the competition is to translate that same $5,000 into nearly $30,000 by permanently buying down the buyer’s interest rate. Here’s how it works:

On a 30-year fixed-rate mortgage, one discount point (which equals one percent of the loan amount) will typically reduce the interest rate on that mortgage by a quarter of a percent. Two points will reduce the rate by half a percent, and so on.

Say the loan amount is $250,000, one point equals $2,500 and two points equals $5,000.  A 6 percent rate means a monthly principal and interest payment of $1,499 while 5.50 percent (that’s after buying it down two points) yields $1,419 payment, or an $80 per month savings. Not much at first glance compared to paying for $5,000 worth of closing costs is it? But, the interest on the life of that loan is very significant.

At 6 percent, the buyer pays $289,640 in interest over the life of the loan. However, a 5.50 percent loan results in interest charges of $260,840; a $29,000 difference! Now, the buyer gets a $29,000 interest credit from the seller instead of $5,000 in closing fees.

Suddenly that same $5,000 stands out amongst the crowd of seller contributions. “Seller to buy down $29,000 in interest payments for the buyer!” $29,000 to the buyer and no additional expense to the seller; talk about a win-win!

Work with the lender and your team leader to make sure that you are marketing the buy down accurately and according to your local board’s marketing standards.