A St. Petersburg Times report mentions a term used by Realtors. In the business it's known as "absorption" and it represents the ratio of sales to listings in the market. It is calculated by dividing the total monthly sales by the total number of homes on the market. In the Tampa Bay area in February, it was 5.4% meaning about one in every 20 homes on the market found a buyer, or 2,225 out of 40,896 single-family homes and condominiums. During the peak of the 2005 boom market the equivalent figure was running over 50 percent. At that time half the listed homes sold in a given month. Realtors have been unable to find a worse absorption rate in the historical data.
This implies home values are likely to stagnate or fall this year. While the Florida Association of Realtors reports that home prices fell 2% in the Tampa area in the past year, declines have exceeded 10 percent in many neighborhoods. The buyers market is already well in place with the figures additionally distorted by the premiums required for a successful sale which can include paying buyers closing costs as well as selling at the reduced prices.
Another figure indicating the character of the boom time market is that roughly 25% of homes bought were "non-owner-occupied", in other words, bought by 'investors'. Many of these investors used riskier loans in hope of quick sales, and many could default as properties await buyers. The situation is further worsened by the 'hidden home inventory' which includes sales by-owner, new construction and condo conversions and bank initiated home foreclosures. A sign of the desperation comes from one agency's report of an area condo converter offering a 12 percent commission, four times the normal rate. Another comments, ""The buyers are on the sidelines waiting for the blood to continue to rise."
This implies home values are likely to stagnate or fall this year. While the Florida Association of Realtors reports that home prices fell 2% in the Tampa area in the past year, declines have exceeded 10 percent in many neighborhoods. The buyers market is already well in place with the figures additionally distorted by the premiums required for a successful sale which can include paying buyers closing costs as well as selling at the reduced prices.
Another figure indicating the character of the boom time market is that roughly 25% of homes bought were "non-owner-occupied", in other words, bought by 'investors'. Many of these investors used riskier loans in hope of quick sales, and many could default as properties await buyers. The situation is further worsened by the 'hidden home inventory' which includes sales by-owner, new construction and condo conversions and bank initiated home foreclosures. A sign of the desperation comes from one agency's report of an area condo converter offering a 12 percent commission, four times the normal rate. Another comments, ""The buyers are on the sidelines waiting for the blood to continue to rise."
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