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Bay area prices are up, sales down

By JAMES THORNER, Times Staff Writer
Published October 25, 2006

You wouldn’t know it by the moaning and groaning from home sellers and Realtors, but the Tampa Bay area seems to have escaped the worst of the housing market slump.

The National Association of Realtors reported Wednesday that U.S. sales prices of existing homes slipped 2.5 percent in September, the biggest year-over-year decline in nearly four decades.

How did prices in Tampa Bay’s housing market fare?

The Tampa-St.Petersburg-Clearwater market shrugged off the national trend and registered a 6 percent rise in the median single family home price to $227,400 last month, versus $215,200 a year ago. But don’t get too excited.

Speculators and investors that ignited last year’s housing market have largely bolted. They’ve become net sellers instead of net buyers.

What about the pace of selling Tampa Bay area homes?

Dramatically slower. Area home sales plunged 42 percent lower from a year ago. And the inventory of homes for sale is up a remarkable 188 percent .

If home prices are still rising year to year, why all the gnashing of teeth?

Statistically, prices are based on hard sales and disregard home sellers who have slashed list prices but still can’t move their houses into the “sold” column. That surplus of unsold homes makes further flattening of prices likely.

“It’s going to get worse before it gets better,’’ said Craig Beggins of Century 21 Beggins Enterprises in Hillsborough County.

Why are local home prices still going up?

They’re not. Not really. Prices continued to rise last fall and into the winter, but have retreated the past 5 months. Pinellas County appears to have taken the biggest hit. Prices in Hillsborough and Pasco counties have held steadier, depending on the neighborhood.

Comparing the market from September 2005 to September 2006 makes prices look healthy, but it ignores volatility in between.

How is the rest of Florida doing?

Across Florida, the volume of sales is off 34 percent. Statewide, the median home price dropped 1 percent. The Realtors association partly blamed high property insurance costs. Be grateful you don’t live farther south.

Sarasota-Bradenton held the sorriest record in Florida with a median price decline of 16 percent to $290,000. Ocala, where homes are relatively cheap at $168,000, reported the most modest drop-off in sales.

What about nearby states?

North Carolina and South Carolina, two competitors in the home relocation sweepstakes, are doing better. Sales are off just 4 percent in North Carolina and 12 percent in South Carolina. (Some other nearby states do not report their monthly numbers.)

Is the housing market starting to creep back into balance?

After shooting up dramatically for 15 straight months, the inventory of unsold homes on the market in Pinellas, Pasco and Hillsborough counties dipped by 1 percent from August to September, from 37,323 to 36,984.

That improvement mimics a national trend. Nevertheless, that’s nearly triple last year’s 12,860. Some speculate inventory has fallen as homeowners tire of trying to sell their houses and offer them up for rent.

What’s the story with condos in St. Petersburg and Tampa?

The story’s not so happy. Year to year, sales are off 46 percent and median prices fell 10 percent from $173,100 to $155,200.

What’s the longer term prognosis for housing?

Depends on whom you talk to. David Lereah, economist for the National Association of Realtors, thinks we’ve bottomed out. A growing consensus of housing experts predict sales will pick up in the spring.

The Federal Reserve has curtailed rapid-fire interest rate increases, a pause that’s keeping mortgages affordable. Brad Monroe, president of the Greater Tampa Association of Realtors, said buyers have been fence sitting, hoping for further price cuts.

“You don’t know when prices have bottomed out until they start heading back up,’’ he said.

[Last modified October 25, 2006, 21:25:34]