Thursday, August 24, 2006
RE: The Definition Of Tumble
Palm Bay, on the east coast, saw July's median sales price decrease by 27 percent compared with the same month last year. Prices in Fort Walton Beach decreased by 24 percent, and prices decreased in Daytona by 17 percent.Earlier in the same article:
Florida and the Tampa Bay area mirrored the nation. The Tampa-St. Petersburg-Clearwater metropolitan area saw a 45 percent drop in the number of homes sold in July, compared with the same month last year. Median sales prices, however, rose 9 percent - a healthy increase, but the first time in years that the gain dropped to a single digit.Hoo-hah, a sales drop of 45% in July translates to very, very unhealthy price drops later. The happy talk about "you just have to wait longer to sell your home" palls after a period, and then the light of reality dawns, casting its sickening pallor over your wan and shaken countenance. That's when you slash the price and walk.
Those "healthy" 9% median price gains, at this stage in the game, combined with that steep of a sales number drop, means that only people with money and no ear to the ground are buying. Check out Tampa on the HousingTracker, which shows list prices and inventory:
9/21/2005: Inventory 5,913
25th Percentile: $195,000
50th Percentile: $287,500
75th Percentile: $438,385
8/21/2006: Inventory 16,032
25th Percentile: $199,000
50th Percentile: $265,000
75th Percentile: $379,900
Note the median drop in asking price is over $22,000, and look at how much the 75th percentile dropped in 11 months. True, this is now and those existing home sales figures represent the conditions of several months ago, but on 6/21 the median asking price was $270,000. The thing is, you have to have money to buy, and in this stage of the market asking prices are falling but median prices can still rise, because home sales are biased toward people with a lot of capital or high incomes.
All the high-tax states face the same thing. There is an imbalance in state funding that is now going to come into play. High property taxes make it rather expensive to hold property, and now it's going to be much less profitable to sell it.
Ever since Trump donated that block of land in NY to the government, the handwriting has been on the wall.
Right now is not a good time to be buying real estate in most of Florida. The odds that the prices will fall in the next year are too high. On the other hand, if the price you are looking at is already 40% down (and I am hearing reports of that in a very few areas), then there is probably not that much further to fall.
It's better to rent for a while anyway when you move to a new area, because then you can look around and figure out where you would really like to buy. If you are not going to get caught employment-wise, why not move into a rental and look? There's a lot of inventory and I would think you could find the right place for you in a year.
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