August 2009 dog days of summer
An Important forward from Bonnie Fagoh
Message from the Broker: Craig Beggins, President, CENTURY 21 Beggins Enterprises
Where’s the Market Heading?
Nearly every day I’m approached by consumers and by far the most frequent question I’m asked: Is the market getting any better? Here’s my reply: No, the market is not getting any better, but sales are way up! This puzzles most people. If the market is not getting better, how can sales be up?
The ironic fact is that sales are up because the market is not getting better. Properties are selling cheap which is
creating more sales. As inventory declines, prices will creep up, and more buyers will be forced out of the market which will slow down sales. This is starting to happen. Our agents frequently comment that the best deals are gone.
Please allow me to elaborate. What is the best deal? It depends. A lower price is not often a better deal. Our 6 Tampa Bay area markets are experiencing relatively high sales volume (174 in June and 127 in July). With hundreds of properties going under contract each month, it stands to reason that the better ones are going first. With regards to real estate, better includes: location, condition, amenities and lastly price. Quite often, the lower priced properties are priced lower for a reason. They have inferior locations, they’re in poor condition, and/or they lack amenities. They should be priced less. So, what does the future hold? Who knows, but here are a few thoughts for you to consider:
We’re experiencing a lower ratio of short sale listings as compared to “normal” listings, and similarly we’re experiencing a higher ratio of “normal” contracts as compared to Short Sale Contracts. This tells me that “normal” sellers are pricing appropriately and attracting buyers and short sales with their associated delays are becoming less attractive to buyers. Banks seem to be foreclosing more and bank owned properties are slowly becoming more prevalent in our markets. This trend is bad for our markets. The problem is, that as lower priced properties sell and close, comparable sales are recorded on the public records. Appraisers use public records to determine value for homes that we sell. As more inexpensive homes sell, lower comparable sales are recorded which makes it more difficult for appraisers to justify higher values of homes that are in better locations, in better condition and with more amenities.
In closing, if you’re in the market for real estate, I’d encourage you to get with the agent who sent you this article and start learning the market with them now, and don’t be surprised if the one you liked last week is gone next week. If you’re thinking about Selling, contact your agent and take their pricing advice so we can get your property sold and closed while we still have good comparable sales to justify your value.
So, yes there are a lot of changes in this Real Estate Market. At the same time, there are incredible deals for those who are willing to invest the time to figure it out. We’re here to help.
Craig J. Beggins