Home prices now affordable, but fear keeps many from buying

Every time you hear someone say "I got a great deal on that place" - they bought it when headlines read like this...


Home prices now affordable, but fear keeps many from buying

TAMPA – Aug. 17, 2009 – Homes haven’t been this affordable in decades. Real estate agents have plenty of business. Desirable properties can be had for less than half the price of two years ago.So why aren’t sales booming? Fear.

“I had a deal fall through the week before closing because the buyer lost his job,” said Joe Perez, a real estate agent with ERA The Polo Group in Tampa.

People worry about losing their jobs in this economy, worry values will continue to freefall. Primarily, first-time homebuyers and investors are buying. The first group is motivated by a government incentive. The last by the desperation of sellers of distressed properties.

Home prices in the Tampa Bay metro area are more affordable now than they have been over the past 20 years, according to Moody’s Economy.com. The median home price in the Tampa-St. Petersburg-Clearwater metro area was $139,400 in June, down 22 percent from $178,700 during the same month last year.

A bright spot this week came in a report from the Florida Association of Realtors. Sales of existing homes for the most recent quarter shot up 24 percent in the Tampa-St. Petersburg-Clearwater area compared with a year ago. But prices continued to slide, with the median price falling to $137,000.

Industry watchers say brand-new homeowners are to thank. First-time homebuyers are taking advantage of the deals, which include an $8,000 government tax credit. Home sales were up 21 percent. There were 2,848 sales of existing homes in June, up from 2,346 a year ago. But given how affordable homes are now, sales should be much higher, said Chris Lafakis, an economist who covers the Bay area for Moody’s. There are still tens of thousands of for sale signs dotting lawns across the Bay area.In the first quarter of 2009, Moody’s affordable housing index for the Tampa area was 195.7. That means that a family making a median income of $58,000 could afford to buy a home for nearly double the median home price. (The median home price for the area was $142,000 during the first quarter.) The area’s affordability index reading has never been higher since Moody’s started tracking the index in 1973.

For perspective, consider the second quarter of 2006, when the index peaked at 94.6. “Affordability has nearly doubled since the peak of the housing market.”

“Given the prices, more people should be buying,” Lafakis said. “Consumers expect home prices to go down more, so many won’t buy.” Also, Lafakis said, buyers are concerned about the overall economy. Unemployment is expected to keep rising until the second quarter of 2010, when Moody’s expects it to hit 12.9 percent.

Jack Rodriguez, president of the Greater Tampa Association of Realtors, said real estate agents are hopeful that sales are rebounding. Many are swamped with business, especially distressed properties. Those sales are dragging down prices, he said, which translates to bargains for buyers.

“Prices haven’t been this low in a very long time,” he said.

Nancy Otten, a real estate agent with Keller Williams Tampa Properties, said she’s been amazed to find apartment-to-condo conversions for as low as $20,000 a unit.

Deals abound even for more expensive homes, Perez said. He pointed toward a 2,400 square-foot home with a pool in the North Dale neighborhood of Tampa. It’s in excellent condition, and the price is just under $200,000. A condo on Clearwater Beach (with a water view) is for sale for just under $300,000. Units like it sold for between $700,000 and $800,000 during the housing boom, Perez said.“I’ve been in this business for 28 years, and some of these prices are lower than when I started,” he said.

Even so, Perez said he’s hearing from worried buyers who don’t want to miss out on good deals but also don’t want to get in over their heads.

“Confidence is a problem, but I think that will go by the wayside if prices start going back up again,” he said. “You’ve gotta take a chance sometime in life.”

Copyright © 2009 Tampa Tribune, Fla., Shannon Behnken. Distributed by McClatchy-Tribune Information Services.

Find Your Florida

Note the info regarding the investors in Naples - there has been investing like that here as well: One partnership bought five properties in Old Palm - with a long-term mindset.

There’s Value in Real Estate, if You Find Your Florida

By PAUL SULLIVAN
Published: August 7, 2009

<-(Photo by Chester Higgins Jr./The New York Times) Greg Rand, managing partner at Better Homes and Gardens Rand Realty.

THE last thing most people are thinking of investing in right now is real estate. The collapse of residential values stung almost all homeowners. And the commercial market, from offices to shopping malls, is full of uncertainty as unemployment rises and consumer spending continues to be weak.

“Florida is in a storm right now,” said Greg Rand, managing partner at Better Homes and Gardens Rand Realty. “It’s overdeveloped, overspeculated and overleveraged.”
Yet there are those who argue that this is a once-in-a-generation opportunity to buy property. Greg Rand, managing partner at Better Homes and Gardens Rand Realty, a brokerage in the suburbs north of New York, even has a theory to guide investors. He calls it “house rich.”

Read on, or perish... http://www.nytimes.com/2009/08/08/your-money/08wealth.html?pagewanted=1&_r=1

Luxury homes sales up in South Florida

We've been witnessing this from the front lines since the end of last year...

Luxury home sales on the rise again in South Florida
Luxury homes are selling again in South Florida -- a promising sign of new life in the housing market.

BY MONICA HATCHER
mhatcher@MiamiHerald.com
Patricia Delinois' Blackberry is buzzing again. After a long, dreary drought, her Sunday afternoons are filling up with open houses.
Delinois, who handles very expensive real estate, says a flurry of new activity is providing hope that the luxury home market has a pulse again, after taking a beating in recent months -- albeit with kid gloves.
"We were having open houses and nobody would come," said Delinois, president of Century 21 Premier Elite Realty. "Now, we're getting five, six, 10 families coming through. I'm really praying and keeping my fingers crossed this is a permanent thing."

You know you want to finish this: -> http://www.miamiherald.com/business/story/1167851.html

Six rules every real estate investor should know cold

Ken Rosen has been investing in Florida real estate for 40 years - in this piece he outlines the six rules he has for every investment. Print them, and pull them out every time you make a real estate investment decision...

Real estate investor shares six great ideas
After decades in South Florida real estate, Coral Gables investor Kenneth D. Rosen put his principles into a book to help buyers in good times and bad.

BY MATTHEW HAGGMAN
mhaggman@MiamiHerald.com
Kenneth D. Rosen has been a real-estate investor in greater Miami for 40 years. All the while he employed a formula for buying property, but he did it intuitively. Not until he was asked to give a talk before a Realtor board several years ago did he actually write down his investment principles.
In the past year, he expanded on those notes by putting into book form what he calls his ``Big Six'' investing guidelines. His book Investing in Income Propertieshas even caught the attention of an Egyptian publisher and is being translated into Arabic.

Keep reading -> http://www.miamiherald.com/103/story/1168012.html

Using the internet to your advantage

While it's no surprise that most people have learned to use the web to start or complement their real estate searches, the information they're arming themselves with is:

Homebuyers gain an edge with Internet searches

By JIM WASSERMAN McClatchy Newspapers

Published: Thursday, Aug. 6, 2009 - 5:09 am
SACRAMENTO, Calif. -- In the colorful, centuries-long history of house hunting, when have so many buyers come to the table knowing so much about prices, neighborhoods and school test scores?
Probably never. Credit an average 16 weeks spent browsing the Internet before buyers contact a real estate agent to get serious. Fifteen years into the World Wide Web, home searches once defined by riding around in agents' sport-utility vehicles - a process in which agents knew all and a buyer knew little - have been thoroughly recast.

More-> http://www.sacbee.com/845/story/2087686.html

Hot Off the Press!

Mark's Tillinghast Circle Listing in Old Palm Gold Club was featured in the July/August Issue of Palm Beach Illustrated Magazine.