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Current real estate sale and rental market conditions for the Pinellas County Florida cities of Clearwater, Belleair, Belleair Bluffs, Dunedin, Largo, Seminole, St. Petersburg, Pinellas Park, Palm Harbor, Ozona, Safety Harbor, Crystal Beach, and all beach cities. Monday, October 22, 2007 Glenn M. Humphreys Licensed Salesperson/Investment Specialist Professional Real Estate Management & Investment Services Incorporated Home Sales Stagnant …Still In the year since my last market update sales market conditions have gone from bad to worse. Listing volume is still at four times the normal level. The crashing of the sub-prime mortgage industry has only exacerbated the situation since sub-prime borrowers made up approximately 15% of the buyers market. There are 7,000 to 9,000 foreclosures predicted in Pinellas County by the end of this year, which will only add to the already high inventory levels. The bottom line is, if you don't have to sell right now don't even try. If you bought a condo or single family home with the intention of flipping it last year or the year before and it still hasn't sold, rent it for a year or two until the market finishes adjusting and the people who have to sell have their fire sales and move on. Buyers Marketè? In an effort to increase sales everyone from the National Association of Realtors right on down to the local board of Realtors are trying to convince potential buyers that this is an opportunity and that we are officially in a buyers market. With both median and mean home values down and an ever-increasing supply of inventory I still see this as a transitional market which will not bottom out until the end of next year or early 2009 at best. Let's face it, between 2001 and 2005 property values doubled while incomes and wages locally did not increase at all. It was investors driving the market and when they stopped buying the whole market stopped. With rental values at an all time low covering as little as 50% of actual costs don't expect investors to pick the market back up again any time soon. What does this mean for the homebuyer or investor? Well, for a relocating person or family it may be wise to consider renting for a year while the market continues to adjust. If you absolutely have to buy right now, there is a home for sale on every street, negotiate. Investors should consider staying liquid for the time being while we monitor the local market conditions. There will no doubt be opportunities in the near future, but unless something comes up that is an obvious deal now is not the time to invest. We may also see an emerging pre-foreclosure market in the coming year as we see Arm's adjusting upward. Rental Market Conditions Last year we saw the emergence of what I call "accidental landlords", those who bought properties to flip and got caught when the market turned and subsequently brought their properties to the rental market. The trickle has now turned into a flood. A huge percentage of the homes for sale now have a "For Rent" rider on the sign or are simply for rent and off of the sales market now entirely. This flood of rental inventory has caused rental values to decline.

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