Dania's Tampa Bay Real Estate Blog

In recent months we have all witnessed the continued strife of U.S. debt management, the unstable Euro, governments threatened with bankruptcy and roller coaster stock and commodities markets wildly driven by fear and speculation. With so much uncertainty, many of us are asking how can we best protect our money (which continues to decline in value vs. many world currencies). Certainly, the real estate market has had its own deep fall. Here along the waterfronts of Tampa Bay we experienced incredible 40% - 45% declines (with prices now hovering at 2000 levels). But as bad as the real estate market has been since 2006, this year, 2011, has been very stable. In fact, inventory is down significantly and sales of waterfront and luxury homes have been more brisk than at any time in the last 5 years. You might wonder, why is that - especially given the current economic climate? I believe there are three reasons, (1) a significant number of buyers are confident that prices are at or near the bottom, (2) interest rates are at lows that have never before been seen and (3) large numbers of people no longer trust or believe in the stock and commodity markets and want to put their money in significant assets they can feel and touch. This shift in perception about real estate is actually borne out by data - a number of econometric research models show that key indicators - the combination of current average U.S. Income, historically low interest rates and housing prices at pre-bubble levels - make this the best time ever to buy a home. What I'm seeing now in 2011 is a back to basics movement, not driven by real estate speculators or flippers, but by people who are buying properties to hold and use for the long term. Are there still waterfront foreclosures? Sure. Are there still luxury short sales? Absolutely. But along the waterfront of Tampa Bay, distressed sales are way, way down. Most waterfront and luxury sales today are traditional sales with price points that are very close to those of comparable short sales. So, is now a good time for you to buy a waterfront or luxury home? Only you can answer that from your own financial point of view. But from where I stand, conditions have never been better for buyers than they are right now.

Posted by Dania Perry on October 8th, 2011 7:41 PMPost a Comment (0)

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Recently there has been a great deal of national discussion regarding a "double dip" in the real estate market and whether or not we have indeed seen the bottom (or near bottom) of the residential real estate market. One important thing to keep in mind is that the national statistic for "New Housing Starts" is not the best barometer of the health of the real estate market. In fact, it is a terribly flawed housing indicator in 2011. Why? The simple reason is that builders, generally speaking, cannot build for a lower price than the housing inventory currently on the market. That is, most builders cannot compete against the prices of comparable existing homes for sale. Interestingly, this could be on the verge of changing, at least with respect to waterfront homes for sale in the Tampa Bay market. Waterfront Buyer confidence is up and inventory is down - significantly - from a year ago. We are even seeing much higher sales activity for multi-million dollar estates. Along the waterfront, the availability of bank owned and short sale properties is dramatically lower than 12 months ago. Lower overall inventory and fewer bank owned/short sale properties have clearly driven a stabilization of prices for waterfront and beachfront homes in Tampa Bay. Recently released government economic data called the "housing affordability index" indicates that right now, after the huge fall in home prices over the last 4 years, homes have NEVER been more affordable to American home buyers than they are right now! Have we reached the price bottom of the residential waterfront real estate market here in Tampa Bay? No one knows for sure. But the way inventory is being snatched up, there are a lot of people voting that way with their wallets.

Posted by Dania Perry on June 6th, 2011 9:42 PMPost a Comment (0)

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Dear friends, colleagues, sellers and buyers. After more than a year of thinking about it, I have come to the conclusion that I can truly add value to the Tampa Bay real estate discussion by sharing my observations and, from time to time, my opinions. Of course none of us has a crystal ball (if we did, we'd never make mistakes), but I do think I can offer some meaningful insights - particularly with respect to the waterfront and luxury residential property markets in the Tampa Bay area. For starters, I am the #1 Century 21 real estate agent east of the Rocky Mountains (and currently, #2 in all of America). In addition, I am the #1 waterfront realtor in Tampa Bay and #1 in Pinellas county (which covers St. Petersburg, Clearwater and surrounding communities). So, with all of that aside, what do I want to talk about today?

Seemingly everyone I speak with wants to know where the real estate market is headed. Is it going up (should I keep my house for now? Should I buy now)? Is it going down (Should I sell my house? Should I hold off on buying)? The answer is a complicated set of national, international and local factors that are sometimes at odd with each other. At a high level, the value of a home is driven completely by the economic s of supply and demand. In a market of fewer homes for sale and many buyers, housing prices rise (we only need look at the frenzy of buying in Florida during the early 2000s to know this is true). Likewise, in a market of many homes for sale and fewer buyers, housing prices will fall (in Florida, property owners have endured this pain from 2007 - 2009). But what causes an environment of many homes for sale and fewer buyers? In today's Florida market the answer is very simple. We are still suffering the effects of the banking crisis from 2008. The crisis itself enabled the historically deep recession which resulted in very high unemployment, layoffs and cutbacks, triggering a huge number of risky loans to go bad - which of course led to the large number of foreclosures and short sales to hit the marketplaces. This has produced in a very high supply of houses and dramatically lower prices. Normally, when prices drop sharply demand increases. Unfortunately (and ironically) the banks have tightened lending so much that very qualified people with excellent credit cannot get loans. The net effect is that even as prices have fallen demand has not been able to rise. The inability of falling prices to be met by demand have caused prices to fall even further - creating a market imbalance. A person might ask, well how can you know this to be true? Well, one strong indication was the very recent flurry of market activity we observed when major banks were compelled to freeze foreclosures. An unexpected and significant spike in cash buyers came looking for waterfront properties immediately on the heels of the freeze announcement.

Locally in Tampa Bay, there have been other factors at play as well. Traditionally, the late spring and early summer months are higher sales volume months for single family waterfront and luxury homes - as buyers look to relocate in anticipation of the coming school year. This year however, the oil spill occurred just as we were entering these months. People who were planning to buy, delayed their decisions - resulting in a lower sales volume throughout the period. Now that the crisis is eliminated and everyone understands that Tampa Bay has not been effected, those buyers who held off their decisions are now back in the buying market (pent up demand). The net result is that we are seeing the best late summer and early fall buying activity we have seen in years.

So, getting back to everyone's question, "Where is the Tampa Bay real estate market headed as we enter the fall of 2010?" In the short term (next six months), we see the local residential waterfront and luxury home market remaining stable with prices staying mostly flat. Prior to the oil spill (which was clearly a special cause situation) selling activity on the waterfront had been steady, prices steady and the inventory, while higher (as a result of foreclosures and short sales), was moving.

Here in Tampa Bay, prices today are at roughly 2002 levels (adjusted for inflation, they're at 2000 levels) and present excellent value and opportunity for people who are looking to buy and hold onto a home. Since financing is a critical requirement of most residential sales, we believe that buyer demand will increase as lending institutions take a more rational yet conservative approach to mortgage lending. We expect that there will be a measured softening of underwriter loan requirements (which clearly went from one extreme to the other in the wake of the mortgage crisis) and a return to the credit verification and lending practices of the early 1990s. We also believe there will be a greater emphasis on mortgage insurance over the next five years.


Posted by Rick Perry on October 21st, 2010 10:57 AMPost a Comment (0)

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