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In market tug-of-war, homes don't move
Tampa Bay area home sales keep probing new bottoms. September's totals were off 39 percent from the none-too-spectacular sales of September 2006.
By James Thorner, Times Staff Writer
Published October 15, 2007
Tampa Bay area home sales keep probing new bottoms. September's totals were off 39 percent from the none-too-spectacular sales of September 2006. That part about probing bottoms sounds proctological, but the market is about as savory as a barium shake. Why aren't people buying? Prices have retreated up to 20 percent. Builders are giving away the kitchen sink, along with Jacuzzis and hard-wood floors. Banks are dumping repossessed homes at discounts. Many blame high property taxes and insurance. The argument has a ring of truth, but also weaknesses. Sales are hurting to varying degrees all over the country, including areas where you can insure your house for $500 a year and taxes are lower than ours. Atlanta, anyone? Taxes, while high, are predictable. If property values rise, taxes march in lock step. Insurance is a different story. Hurricanes bushwhacked us in 2004-05 and insurance companies jacked our rates. But many of us, away from the water, at least, still pay only $75 more a month. One of the best explanations comes from Lennar Homes president Stuart Miller. Buyers are everywhere, he said, but they're "unmotivated." But why? The answer may lie in market psychology. Many buyers wait for home prices to strike bottom, whenever that might be. They assume prices have room to fall, so why buy a diminishing asset? On the other hand, sellers resist lowering prices. A home sells for $290,000 and the guy down the street asks $340,000 for the same model. Needless to say, the latter home rots on the market a year. Dig deeper. Many of these sellers are straightjacketed: They siphoned off home equity to install pools and buy cars. They owe more on the house than they can sell it for. We're witnessing a buyer-seller standoff complicated by tighter mortgage lending, high taxes and ballooning insurance. Sounds like as good an explanation as any. James Thorner can be reached at thorner@sptimes.com or 813 226-3313. Read his (Un)Real Estate blog at blogs.tampabay.com/realestate.
[Last modified October 15, 2007, 06:19:24]
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by Don
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10/16/07 12:41 AM
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Alot has to do with all the Yuppies buying into Mortgages they cant afford.With interest rates they were too stupid to realize.Now they want Govt help? Ive got an 8 grade education,and I owe nothing. Comfortable and laughing at all the know it alls.
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by Alex
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10/15/07 01:35 PM
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Diane hit the nail on the head. I moved here from NJ 16 yrs ago for that reason and I have friends who moved to SC and TN for that same reason now.
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by lisa
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10/15/07 01:31 PM
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The markets never gona get better...because people are done working for their houses, until they're dead! Thats what this insurance hike is causing....It's causing deaths!!
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by Melinda
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10/15/07 12:48 PM
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Home prices have more or less doubles since 2000. The tiny 10% drop from these inflated prices does NOT indicate a 'correction'. Until prices return to the point where 1st time owners can enter the market, things will not improve much.
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by Harry
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10/15/07 12:31 PM
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The last point if perhaps the most salient of this predicament: "Buyers, lured by teaser rates and irresponsible lending practices drew equity out of their homes that did not exist!". And we should condone this behaviour by bailing them all out? Ha!
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by Bruce
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10/15/07 12:23 PM
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Most of us will not sell and buy up until the tax issue is put to rest. That is what is keeping the market down. I guess the realtors and real estate lawyers have no clout in Tallahassee.
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by bill
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10/15/07 11:16 AM
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How about a simpler explanation?The market was saturated. Buying binge is over and it will take time for the market to adjust. Also, the general economy is levelling and customers are wary. A wary buyer is a smart buyer.
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by mikey
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10/15/07 10:52 AM
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Mr Thorner, Your metaphor stinks. No pun intended!
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by frank
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10/15/07 10:36 AM
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WHO CARES?????????????WAKE-UP TO REALITY
REALTY!!!!
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by Alex
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10/15/07 10:33 AM
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Tree Huggers like yourself James are excited about the current conditions. If you stopped talking about it maybe consumer confidence would improve. Stop putting it on the front page of the frigin paper everyday you idiot and it will improve.
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by Raul
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10/15/07 10:31 AM
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The writer does not get it. The reason houses are not selling is because of too much supply and little real end user demand. For a while this was masked by the speculators which made things worse as those houses are coming back on the market.
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by Chip
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10/15/07 10:08 AM
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Stuart Miller should be in MENSA. No kidding buyers are "unmotivated." How many people want a $3000/month mortgage payment? How many young teachers, nurses, firefighters, police officers, or small business owners can put down $60K? Get real, Stuart.
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by Diane
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10/15/07 09:37 AM
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Or, why buy a 1000 square foot box in Florida for $250,000 when you can have 3500 square feet for that same price elsewhere.
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by ed
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10/15/07 08:30 AM
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Four reasons tighter lending standards, high prices, insurance and save our homes making newcomers unwelcome.Very simple, take your head out of the sand.
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