Rich Cornelius

With home pricing fluctuating wildly, it's always good to know where we've come from (most owners know what their home was worth at the height of the market), know where we are right now, and forecast where we are going. Sellers all too often OVERPRICE their home at the outset thinking they are giving themselves negotiating room and are left emptyhanded 3 -4 months later when they are following the market down in terms of pricing.

Here's a little "foresight" into where your home value was, is, and may be in 2010 and 2011. In the example below, I will use a foreclosure in my neighborhood (to protect the guilty who over-mortgaged themself).

1) First, visit Zillow.com and type in your address. Click on home details, scroll down, and select "5 YEAR GRAPH"...the peak of the housing market was in mid 2007 and the graph will show the highest price. Zillow says the highest value in 2006 for this home was $366,000.

2) Per a St. Pete Times article on December 30, 2008, citing the National Case-Shiller Index, values in Tampa Bay have fallen 30.5% from the peak in July of 2006 (Value #1). That makes the value at the end of 2008 at $254,370 (which is extremely accurate for my neighborhood)

3) An article "Economists: US Home Prices Likely to Fall Another 10 Percent" by Barry Wood, Voice of America, 10/22/2008, forecast an additional 10% value loss for 2009. That puts the homes appr value at $229,000 towards the end of 2009.

4) Research from the University of Michigan on the real estate sector of the US Economy, 11/20/2008, forecasts "Prices will bottom out in late 2009...and then edge up by just 1 percent during 2010." The 2010 value of the example home wwould then be $231,000.

5) If we resume our historical real estate growth, "median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005" according to the National Association of Realtors. Let's assume this is correct, although I see this as highly unlikely given our present circumstances. The value in 2011, at 6.5% annual growth, would be $246,000.

If you are selling and you are able to lower your price, do so. Otherwise, you may be a homeowner until 2011, over 2 years from now.

The latest on the citizen-initiated 1.35% Property Tax Cap...


WPBF.com

Tax Cap Removed From 2010 Ballot

Florida Supereme Court Knocks Tax Cap From Next Year's Ballot.

POSTED: 7:47 am EST February 1, 2009
UPDATED: 9:29 am EST February 1, 2009

TALLAHASSEE, Fla. -- The Florida Supreme Court has knocked a proposal for a property tax cap from the 2010 ballot.

In an opinion posted Friday, five justices said the ballot summary was misleading. Two justices dissented.

The proposal is a citizen initiative that would cap property taxes at 1.35 percent of the highest taxable value of a home, business or other real estate, although voters could approve exceptions.
Petition sponsors said tax cuts ordered by law last year and through another state constitutional amendment passed in January 2008 don't go far enough.

I discovered this video gem and couldn't help but share it. If only I knew about this gentleman during the run-up.

Essentially, Peter Schiff was seeing into the future as he did the whirlwind of financial talk-shows in 2006 and 2007. Not only was he right, he was EXACTLY RIGHT!

What's so comical are the "EXPERTS" who predicted 10% real estate gains, picked Merrill Lynch and Bear Stearns as best-buy stocks, and prophesied expanded wealth in the financial sectors.


http://www.liveleak.com/view?i=b0a_1232747931

So, in the future, listen to Peter Schiff!

Despite the tumultuous end of the year, the real estate market in the Bay area finished slightly stronger than anticipated. Home sales ticked up and supply decreased slightly, which is the right formula for stabilization. Condos are still sluggish, with relatively undiminished supply and flat demand.

What is amazing is that Beach homes through out Pinellas County that sold in December closed at 70% of their original list price. That's a full 1/3 discount. Other property types in and around Pinellas that sold in December averaged 82% - 85% of their original listing prices.

Distressed properties are here to stay and make up appr 1/3 of our sales. 2009 is a peak year for "Pay-Option ARMs" to reset and will cause a secondary wave of foreclosures as owners' payments double, triple, and quadruple when the loans "re-cast" themselves.

If you absolutely need to sell, do yourself a favor and set your price AGGRESSIVELY. No matter how nice your property is, it is hard to compete with properties being sold at 10% - 25% discounts unless you are VALUE-priced. Below is a graph to showing the AVG PRICE of available vs sold homes in Tampa Bay from OCT 07 - DEC 08...on average, the SOLD PRICE has decreased appr. $5700 PER MONTH!!! Essentially, you are paying "the market" $6000 a month to sell your property.

Despite the tumultuous end of the year, the real estate market in the Bay area finished slightly stronger than anticipated. Home sales ticked up and supply decreased slightly, which is the right formula for stabilization. Condos are still sluggish, with relatively undiminished supply and flat demand.

What is amazing is that Beach homes through out Pinellas County that sold in December closed at 70% of their original list price. That's a full 1/3 discount. Other property types in and around Pinellas that sold in December averaged 82% - 85% of their original listing prices.

Distressed properties are here to stay and make up appr 1/3 of our sales. 2009 is a peak year for "Pay-Option ARMs" to reset and will cause a secondary wave of foreclosures as owners' payments double, triple, and quadruple when the loans "re-cast" themselves.

If you absolutely need to sell, do yourself a favor and set your price AGGRESSIVELY. No matter how nice your property is, it is hard to compete with properties being sold at 10% - 25% discounts unless you are VALUE-priced. Below is a graph to showing the AVG PRICE of available vs sold homes in Tampa Bay from OCT 07 - DEC 08...on average, the SOLD PRICE has decreased appr. $5700 PER MONTH!!! Essentially, you are paying "the market" $6000 a month to sell your property.