State of the Union

Well, here we are in 2012. Where did 2011 go? As we reflect back on the last 12 months it’s clear that 2011 was a time of transition and renewal for the Tampa Bay Real Estate Market. While recovery has been slow, it appears that the housing market has turned the corner. Unemployment rates have dropped, new home sales are on the rise for the first time in 2 years, consumer confidence is improving, the real estate market seems to be stabilizing and mortgage rates continue to remain low.

Now let’s drill down to our local market. At the risk of sounding like an optimistic Real Estate Broker, I’d like to share some of the things that we’re excited about for 2012. At CENTURY 21 Beggins Enterprises, our December 2011 sales were nearly triple that of December 2011, a well needed blast to kick off 2012. Whew!

What I’m about to say next is dangerous. If I tell you the truth, you may mistake it for exaggeration and puffery, at the same time, if I don’t tell you; you could miss out on some opportunities. So I’m going to do the right thing and tell you the truth. The inventory of homes on the market countywide has dropped from a 27 Month Supply of Homes to a less than 6 month supply of homes on average. In the under $100,000 price range, inventory supply is down to less than 4 months. That means if sales continue at this pace, the under $100,000 inventory will be sold out and what’s more noteworthy is that unless banks release a ton of cheap foreclosed homes, this inventory won’t be replaced. You see, builders can’t construct more homes on lots for less than $100,000. So buy them while you can.

This will result in an increase in average sales price. If fewer inexpensive homes sell, the average sales price will go up. Please don’t give much credence to the average sales price statistic; it simply relates what price ranges are selling, not the value of homes. Value is determined by sales of similar homes, not average homes.

If you’re in the market, another thing you need to know is that as a result of the smaller inventory, “good homes” on the market are getting lots of attention often times receiving multiple offers and getting bid up above full price. Who would have thought that would ever happen again? Markets do correct and today’s low inventory definitely indicates that a correction is underway.

In a normal market, this environment would lead to an increase in prices, but don’t get too happy yet if your Selling. With nearly 70% of all home purchases using bank financing, the appreciation will be delayed do the appraisal rules. Appraisers justify current prices using past sales, so too often, even if buyers are willing to pay more to get what they want, many times lenders refuse to lend because the past sales don’t justify the contract price.

In any event, 2012 looks to be a more positive year for the real estate market in Tampa Bay. We’re excited to make the most of it and want to thank you for your business. Our Sales Force is excited and we’re ready to get back to work helping buyers and sellers understand the complexities of this market. Please consider the agent who sent you this newsletter to help you and your friends with real estate needs. They’re specializing in your neighborhood and have the full support of our organization. We can help with Loans, Title Insurance, Home Warranties, Short Sales, Foreclosures, and have a Special Program to help Investors learn the Art of Investing in Real Estate. Check out www.C21Beggins.com for a FREE Video Course with access to all types of tools to help Investors make great decisions.

May you have Fair Weather and Following Seas throughout 2012!

Craig Beggins, President

CENTURY 21 Beggins Enterprises