I don't know about you, but I am tired of hearing about the bubble bursting. IT IS NOT! Are there more properties for sale? You bet! There are several reasons for the increase in the number of properties listed and they are not all bad.
First of all, over the last 24 to 36 months there has been a tremendous amount of new construction of single-family homes, condos, etc. These properties were purchased as investments, second homes, and as owner occupied. Over this period of time people experience changes in their personal lives - death, divorce, job relocation, etc. The investor on the other hand has held his or her property for the minimum of one year and by selling now, will reap a more favorable capital gains tax rate. Throw in the fact that the average sales price in Pinellas County climbed by over 26 percent (TWENTY SIX ) in the last year (12/04 - 12/05), profit taking is part of the recipe for a market glut.
Several other factors contributing to the rise in the number of properties for sale are those low teaser interest rates of 1.25 percent, higher carrying costs and reduced monthly or annual rental rates.
Mix all this together and you have a temporary market glut. I expect it to be short lived - 6 to 8 months. Keep in mind that the average selling time is going to increase. Instead of 30 to 60 days, you should expect 90 to 120 days. With interest rates still affordable, I expect sales to pick up and remain steady.
In fact, sales at Sand Key Realty increased in January and February of 2006 versus the same period last year.
So now you see why the bubble hasn't burst. It's just good old capitalism at work - buy low - sell higher.
Ric Cornelius is the Broker/Manager of Sand Key Realty Sales and Rentals, Inc. Sand Key Realty has three offices with 40 agents. One office is at 740 S. Gulfview Blvd., Clearwater Beach, 727-443-0032; the second office is at 2701 Gulf Blvd., Indian Rocks Beach, 727-595-5441; and the third office is at 309 Belleview Blvd., Belleair, 727-461-4200.