Overpriced Bank Owned Homes Hit Tampa Bay. Video.

The Madness Fire Is On And Banks Pour Oil On It

overpriced_bank_owned_homes_REO_St_PetersburgYesterday James and I went to a listing appointment.  We researched comparable sales and market stats and the market value for the home we will be listing is between 250k and 280k.  And at the high point of this range I would be a little worried about the appraisal.  If you plan on financing a home your deal can easily go south because the appraisal is not high enough, even if both you and the seller agree on the price.
The mad part is a few days before our listing interview with the seller, another home was listed a couple houses down. It is a deed restricted community and all homes are very similar in size and specs.  Well, the “competition listing” is a bank owned property and it is listed for $309k! The condition and market value scream $250k maximum.  So, what’s going on?
Day_on_the_market_REOs_Tampa_Bay

I still very often get requests from prospective buyers to show them foreclosure homes. The truth is the days of when you could get a great deal buying a foreclosed home are gone. We shifted into a seller’s market.

Regardless of how we got there and if it was done artificially, we are there. Inventory is less than 4 months and that is a clear indication of a seller’s market.  The prices are increasing at a rate of 15% annually, in some pockets even faster.  Homes in move-in ready condition receive multiple offers and bidding wars are bringing back the taste of 2005-2006.

Yes, you may get a good deal buying some foreclosures, but you have to buy 20 of them if the asset management company (if you have a connection there) is willing to package them for you.  But trying to make offers on single bank owned homes right now is tough for several reasons:
Bank_Owned_Homes_in_St_Pete– Banks started to list their homes high, often above market price (crazy!)
– Condition is often questionable, no property disclosures are provided and you have to rely only on your personal inspection.
– If repairs have been done they are often done poorly, the cheap way, just to make the property look better (not like a dump), be able to pass inspections, and be able to justify the increased list price.
– You will be bidding along with a dozen or two other investors and buyers who still think bank owned homes are a good buy.
– The amount of paperwork is stupendous

I don’t want to discourage you from buying a bank-owned home.  I am simply frustrated about the road banks are taking in this market.  Taking a quick look at MLS data I can tell you that about 60% of bank owned homes in St Petersburg have been on the market for over 30 days – they are overpriced!  After accepting some bailout money they are now also trying to play the market and help drive the prices up and create a buying frenzy.  Not cool!

So, what’s next?  I don’t have a crystal ball, yall!  But if we continue to see prices rise at 15-25% a year, in 2 years we will be in the same situation we were in 2006.  And you well know what happened next.

What Can You Buy In St Pete for $300k?

Or, welcome to the seller’s market.

listings_in_St_Petersburg_FLI couldn’t believe my eyes!  I sat down in front of my laptop blinking in awe at the numbers.  39!  Yes, there are only 39 homes (single family houses, as of 4/4/13) for sale in St Petersburg in the range between $275k and $325k.  This is a sweet spot for many families these days, folks looking for a nice home, maybe with a pool, 3 or 4 bedrooms and somewhere between 1700 and 2500 sq.ft.  With the ever rising demand for homes in St Pete this number is very low, and it’s no wonder multiple offer and highest-and-best scenarios are so common these days.

Another interesting fact about these 39 houses is that only 10 of them have been on the market for more than 100 days.  This means majority of the homes in this price range sell within first 3 months.  This is good news for sellers.  Only 4 of these homes are in distressed position: bank owned or short sale.  And with the median price of homes in Pinellas up by 10% over the past year many home owners will see the values slowly climb out of the up-side-down position.

So, if you are looking for a house in St Petersburg in the range of $275k – $325k, what can you buy?  Glad you asked, here’s a list just for you!  Ready to look at some of them?  Give us a call (727) 417-4495!

High-end and luxury leases in Tampa Bay

Beautiful Downtown St Pete

Beautiful Downtown St Pete

Relocating can be exciting and also exhilarating.  Often you will have accumulated a lot of personal items and if you have a family, well… the amount of your treasured possessions triples or quadruples.  Your mind is restless, you need to call movers, learn about the area you are moving to and find that leasing agent who will help you find the right place for the right money.

Finding a luxury or high-end rentals in Tampa Bay area can be challenging. Both sale and rental inventories are down and this situation is slowly driving the prices up.

Lease homes with updated kitchens

Lease homes with updated kitchens

Last week we helped secure a rental for one of our clients who is relocating from overseas to Florida.  He works for a big corporation and is fortunate to have his company pay the relocation fees and the cost of lease.  However, if was up to the client to choose the place. With a budget of $3500 per month we spent a few days looking at houses and when found nothing exciting decided to look at condos.  We were fortunate to help him secure a lease in a newer condominium complex in Treasure Island.  He was well within his budget and got a beautiful 3 bedroom 3.5 bath condo, with nearly 3,000 sq.ft, expansive balcony intracoastal water views from the 4th floor.

Securing a lease and negotiating most favorable terms is not always simple, especially when dealing with luxury and high-end rentals in St Petersburg.  Representing our clients with their best interest in mind and taking care of all the little details is what we do best.  And our clients appreciate it.

Looking for a nice rental option? Relocating to Tampa, Clearwater or St Petersburg?  Corporate relocation?  Beach front home rentals?  We do it!  Call us now (727) 417-4495, or view rentals here: http://www.hometeamtampabay.com/rentals/

Rolling Out Our Monthly Newsletter w/VIDEO

Hey! It's Ilya and James - The HOME Team

Hey! It’s Ilya and James – The HOME Team

We are officially starting our monthly newsletter.  Frankly, I don’t know what kind of information would perk your interest on a regular basis, yet we’ll try to provide only high quality content.  We are Realtors, so naturally we want to share news related to real estate in St Petersburg and Tampa Bay area.  But we are human too, so we will share things from our day to day lives, information about local restaurants, parks, neighborhoods and more.  So stick with us and feel free to share your thoughts in comments below or send us a private message.

If you are reading this but did not receive our newsletter in your email, please send us your contact info here and we’ll add you to our email newsletter list.  Close to 2,000 people read it, and so should you!

As always, if you know anyone looking to sell or buy a home, let us know, we’ll appreciate a referral.  Our clients love us!  You can find our reviews on Trulia, Zillow and Yelp.

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4 things that will help you sell your home

And Why The Most Important One Is Marketing (watch video below)

location-st-pete-marketingLocation, location… location?  Wait a minute? Really?  Yes, you’ve heard it many times, but, in my opinion, it’s an overrated statement and often not true for several reasons.  If the buyer is an investor they care more about their rate of return or net profit rather than location.  When buying a house in St Petersburg, location is more important for primary home owners and long term investors because in theory properties in good locations will appreciate more or at least will hold value better over the years.  And of course location is important for simple reasons like wanting to live in a safe and appealing neighborhood where you and your family can have a comfortable lifestyle.

However we need to remember, today’s real estate market in St Pete and other parts of Tampa Bay is very dynamic.  You have seen the drama unfold in the past 10 years where we went up, then down and going up again.  I’ve seen great neighborhoods go down and less than desirable ones coming back to life.  It’s hard to say with a 100% certainty that today’s prime locations will remain prime 10, 15 or 50 years down the road.

Price.

Good marketing gets buyers in the door and the right price and condition sell. Pricing your home correctly is almost an art. You don’t want to price high and then chase the market down yet you don’t want to give it away either. Do adjustments quick, within a week or two if you don’t have traffic, don’t wait, and don’t let your listing get stale. Ask your agent to research comparable sales, take into account your condition and location, ask for the best marketing and you will sell your home quick.

Condition.

Let me be honest, if your house looks, smells and feels like a dump – you will limit your pool of buyers and sell below market value. Use common sense; if you can afford it, hire a staging company. I’m not even going to mention de-cluttering, painting and sprucing up – there’s enough about it on the web via Google Search. Or my older articles:

Top 5 home staging tips

Tips on curb appeal

7 selling tips you will like

OR  all articles here: Selling and buying tips.

If you will ask me to sell your home I will most likely give you suggestions about bringing your home to “sellable” condition.

Marketing.

marketing-st-pete-homesMarketing is a very (if not the most) important aspect of selling your home. It is simply a selling strategy that takes effort, time and money. What marketing does for you as a seller is helping you sell your home quicker and for the highest possible dollar amount. The home sale marketing strategy is often very simple – create a great presentation and get as many qualified eyeballs on your home as possible. That’s it! There’s a whole lot more to the sales process and closing the deal, but that’s a separate topic. Marketing is presenting, explaining value, features and potential gains. Marketing is the first point of sale. Marketing is a smile. Marketing is smart technology. Marketing is art. Hire someone who understands marketing, please.

The Home Team blog, Re/Max Metro

Communication, Baby! With VIDEO

And Why It Is Important In Real Estate

I believe one can get a degree in communications.  What to say, how to say it and when to say it can pretty much determine your communication success not only in business but also in your private life.  We must remember who we are trying to communicate with, why we are trying to communicate with them and if we are speaking their “language”.

A lot has been said about tonality, positive energy and voice level when speaking with clients but sometimes I observe a communication break down between a professional and their client. This usually happens when professional lingo is being used in the conversation. It’s often not intended (though some use it to appear superior and knowledgeable… not a good move!), but it raises a wall and makes the client feel stupid (sorry to be harsh here).  They will not admit it so they won’t ask you what it was you just said.  It can cause stress, distrust and lost business.

In real estate industry there are many terms we use daily and sometimes can forget that our first-time buyers or sellers have no idea what we are talking about.  It is our goal to make sure we communicate clearly with our clients and if a professional term has to be used in our conversation we explain the meaning.  A simple Purchase Contract has many of such terms and I enjoy explaining them to buyers and sellers for their peace of mind and appreciation of being educated.  After all, we are not just sales people, we are real estate professionals, advisers and consultants.

Watch this VIDEO to see James give an example of real estate lingo text messaging!

Need someone who speaks your language? Call us today 727-417-4495

The Mortgage Debt Relief Act is Renewed for 2013

So Breath Normally, St Petersburg Resident, You Are Good For This Year!

If the Mortgage Debt Relief Act would not have been renewed for 2013, it could have created a serious damper on the real estate market recovery and growth this year.  Fortunately for many home owners planning on going through a short sale this year the Act has been renewed.  Even if you will receive a 1099 form you will not be taxed on that amount. Phew!

Since 2007 when Act was initiated it helped thousands of families to avoid paying taxes on the virtual income they haven’t really received.  The money is lost for the home owner and for the bank.  However, many of the banks got bailed out, the homeowners didn’t.  In some cases (like HAFA short sales) the sellers are offered some cash from the lender, but often the sellers have to bring some money to closing, which can be a challenge for the sellers.

Despite many efforts by lenders to simplify and speed up the short sale process, it remains to be tedious and often very frustrating.  Too often Realtors put tremendous amounts of time and paperwork into processing a short sale only to see a deal fall apart because of un-cooperating lender.

Need more information about processing your short sale?  Call us now:   727-417-4495

FHA loan – deal maker or deal breaker?

Obtaining an FHA loan for purchasing a home in St Petersburg is a huge advantage for home buyers.  The downpayment is very low, only 3.5%, the loan is guaranteed by the government and is assumable by future buyers, which can be a great selling point down the road when rates go up.

At the same time requirements for procuring such a loan are quite strict.  I won’t go into every detail, you can learn about them on the Federal Housing Administration website, but the following issues must be passed by the FHA appraiser/inspector: building codes, durability, safety and security and site hazards.

I’ve had a buyer just recently face insignificant issues like surface termite damage, pealing paint and uncovered electrical outlets, which almost cost them a deal. If it is a traditional sale you are dealing with, very likely the seller is motivated and will address and fix/repair the issues. But if you are working with a short sale or a bank owned property you may very well be down on your luck.

Buyers who are set of using an FHA or VA loan must pay close attention to the requirements and condition of the properties they intend to make offers on.  Consulting with your mortgage broker and real estate agent will save you headaches.  Watch these two videos for our comments.

Looking back at 2012. How did St Pete real estate market do?

Yes, it is 2013 and January is quickly gaining speed!  But some of our clients are starting to wonder, how did 2012 do in terms on real estate?

We’ve made a couple videos for you to sum up 2012 real estate market activity in St Petersburg and all Tampa Bay.  Take a look and you’ll have answers to these questions:

  • How did the Tampa Bay real estate market perform in 2012?
  • Did the prices go up or down and by how much?
  • What are the statistics on real estate inventory in St Pete?
  • What is the #1 question we get asked as Realtors?

And many more. Watch here now!

Uncertainty – The Watchword for 2013

By guest blogger/writer Jared Diamond

The real estate forecast for 2013 is cautiously optimistic.  Modest gains are expected in leasing, rents, and pricing across the nation.  Quick profits will still be a distant dream for developers and investors who have been hoping to make a killing, after all, the recession continues and taxes and prices are rising for everyone in a variety of sectors.

Low Inventory

However, the decimated housing market is expected to witness a turnaround in many regions, certainly in states with low taxes and financial discipline (this could be Texas, Florida, Oklahoma, and several others).  Housing prices seem to have hit rock bottom and are now slowly rising. This rise is primarily due to the decline in number of properties for sale rather than surging demand.  Low inventory is an indicator that recovery is on and means that the number of buyers is more than that of sellers.

Hedge Funds

Tampa Bay has also been witnessing this firsthand.  The number of homes sold in the area rose 35 percent from the year before while sale prices were up by an average of 9 percent.  According to Todd Bezemos, a community housing coordinator of rent to own homes listing service HomeStarSearch, says “the reason for an increase in prices is partly due to recent large purchases in the area chiefly by big company hedge funds.”

Investors and buyers are making a beeline for property in the region leading to bidding wars.  Inventory in Hillsborough County was at 7,000 listings this September as compared to 12,000 a year ago.  It is estimated that these listings are barely enough to last four months.  “Tampa Bay ranks just behind Orlando in the national survey on outlook for real estate markets for 2013,” says Bezemos.  He adds, “This ranking takes into consideration factors like investment, development, and home-building potential.”

Project Delays

Construction is also starting to look up with the number of permits sought for single-family homes running into the thousands this year.  Now, the problem faced by the construction industry is an acute shortage of labor.  The years of this housing slowdown has led many workers to opt for other career options and many people have flat out stopped looking for work because the opportunities are just not there.  Construction hiring has been reduced to half of what it was during the boom.  And this boom was partly caused because of social engineering and federal regulations which reduced the standards of home ownership leading to this mess (there are a couple of other reasons but these are some of the major ones).  The lack of labor can cause delays in the completion of new projects and thus, hold up the region’s economic development.

Also, Florida home values are still eons away from the prices they hit in 2006.  At the current rate, it might be 2017 at the least before we see those prices again. Single family home sales in Hillsborough are still 20 percent lower than those seen in 2004.

There are many welcome and positive developments taking place in the housing market.  But this should not be mistaken for an imminent boom―not even close.  The high unemployment rate and other economic problems including the unwillingness of banks to extend credit can prove to be high hurdles for a healthy housing market to manifest itself.

Many also see excess supply of housing units as the core problem and feel that a slowdown in construction helped the housing market regain its footing.  They feel that the resumption of unfettered construction will once again cause home prices to slide.  The owners of multiple underwater properties are waiting on the sidelines to unload their investment at the earliest opportunity and when this happens, it will curtail the upward movement of housing prices.

Nothing is for Sure

The market stabilization seen in 2012 was also due to the low interest rates and increased buying by investors.  Whether this will continue next year is something that only time will tell.

Jared Diamond is a real estate credit consultant with Amerifi Home Loans in Los Angeles CA. Outside his profession, Jared writes on a variety of personal-finance and real estate topics. Jared holds a B.A. in Economics from Ohio State University.