Real Estate Blog

Written by Fred Hintenberger, P.A. exclusively for MyEhomes.com

The real estate market for the Tampabay area is still deteriorating and is expected to worsen for 2008. The new numbers that came out today are worse than expected. New home starts have hit new lows and are down by 9% from the previous month. Florida's growth rate is also falling off the cliff, it is less than half of what it was in 2001 & 2005 when Florida added over 400,000 new residents annually. Tampabay is only second to Miami when it comes to the biggest price decline in the United States. Miami leads the way with a 12.4% price drop, followed by Tampa at 11.8%, and Detroit rounds off the top three at 11.2%. We could experience a population decline in Pinellas County this year. There are a couple of indicators that show more families are moving out of the St Petersburg-Clearwater area. One of the indicators are the Van lines and moving companies which clearly show that there are more people relocating out of the area than into the area. Renting a moving truck through U-Haul from St Petersburg to North Carolina will cost you over $1,700 but less than $300 from North Carolina to St Petersburg. Another indicator is that student enrollments are way down and the school board will be closing down some of the schools. Bankruptcy filings are up 75% in the Tampa division of U.S. Bankruptcy Court and foreclosures are up over 100% in the Tampabay area. The upper end of the luxury real estate market is not immune in this downturn. Properties from the 500k to 5M are getting hit hard and are showing signs of slipping.  Last month Southerby's had their largest auction ever for the Pinellas-Hillsborough-Sarasota County areas. There was 79 luxury properties on the chopping block and less than half of them sold. Only the absolute properties secured bids at .20-.30 cents on the dollar. The majority of properties that had minimum bids did not sell, one of them located on Snell Isle on Brightwaters was valued at over 2.5 million with a minimum starting bid of 800k and it could not fetch a single offer. The major factors that are contributing to the real estate slow down are higher taxes, higher insurance rates, higher gas prices, tighter lending requirements, increase prices for food and consumer goods, and unemployment rate is on the rise. The consumers' are maxed out on credit and their disposable income is being gobbled up by the cost of living, which will eventually cause an economic slowdown. Don't be surprise if the stock market takes a big hit in the first week of the new year when all these numbers start to materialize. As an active real estate agent I aggressively work this market everyday and network with lots of individuals and business on a daily basis. I get to see things first hand, before they show up in statistics and effect the market. What I see is that the economy is in worse shape than it looks and will not get better anytime soon. We probably won't hit bottom until February 2009. This housing bubble might be worse than the tech bubble. We got to this point because people started getting greedy, bought more than they could afford, treated housing like a commodity, out of control speculators, financial irresponsibilities, and relaxed lending standards just fueled the fire. It pushed home prices to levels where it should never have been and now it is correcting itself to where it should be. It will take some time before we have more clarity and transparency in the real estate and financial markets. I tell people that the real estate market is like a big ship, when it makes a turn it takes a while to get there.