Where does the St. Pete real estate market go from here?
Before the hurricanes, I was ready to send my usual monthly market update with absorption rates, new listing numbers, and other fun stats. But those are all lagging indicators and, given the events of the last few weeks, they are unlikely to tell us where things are headed. So instead I am going to break down a few different parts of the real estate market and you skip to the parts that most interest you.
A couple of things to keep in mind...
Waterfront or near water - After looking at other communities that have experienced similar events, a predictable cycle emerges (assuming no other major event interrupts the pattern). In the short term, 4 -12 weeks, we will see a rush of rehab-needy homes come up for sale. Owners will cash their insurance checks and, for many reasons, they will not be able to do the repairs. They will just want out and will sell for what they can get. Then, at the 3-6 month point, we will start to see a pop of homes for sale that have been rehabbed. These are owners who could do the work, they want to get the most equity out of their homes but still want out of the area. At 6-12 months, we will see the stragglers of rehab-needy and rehabbed homes hitting the market. Finally, after 12 to 18 months, the market will return to a "normal" flow of homes.
Condos and townhomes - Pre-storm, it was a strong buyers market. Prices were falling, and inventory was rising. I am seeing in the higher-end condos an increase in interest. This has not fully panned out in the numbers yet. However open houses, phone calls and other indicators have jumped up. Likely this is from folks who were looking at waterfront and are now looking at other options. I do not expect there to be a dramatic shift in the market in the near future. With the one exception being condos near the water and first-floor units are going to be harder to sell.
Non-flood zone homes - Honestly, not much has changed. Once tree clean-up and power are fully restored, I expect the market to continue as it was before the storm. Last year was a heavy seller's market and this year has been balancing out into a neutral market. I expect that to continue until something changes in the market.
Interest rates - The average interest rate for a 30-year loan currently sits between 6.99% - 6.75%. Yes, the FED rate drop was a big deal but most mortgage lenders had been baking the drop into their rates for weeks before it happened. My only prediction is that whenever we do see rates hit the 5%'s again there will be a rush of buyers coming to the market with a potential price spike to follow.
Rental market - Rents have been stagnating for the past several months. This was mostly good news considering the sharp increase we had seen over the past few years. However, with the volume of displaced folks seeking housing, we are seeing more vacancies disappear. The general rule is this should cause a spike in rent. However, I am seeing most landlords not trying to gouge those in need, with some even lowering rents for those who have been displaced. At some point, this goodwill is going to fade and a lack of inventory will cause rents to increase. However, as the displaced folks move back to their fixed-up homes, the supply will lessen and rents should reflect that change in demand.
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Here is a 30-day snapshot of a few St. Petersburg areas:
OLD NORTHEAST
Active Statistics
Active Listings: 57
Pending Listings: 20
Avg. Days on Market: 80
Avg. Listing Price: $1,222,000
Avg. Listing Price per sq.ft: $612
Sold Statistics
Total Sold: 9
Avg. Sold Price: $1,090,000
Avg. Sold Price per sq.ft: $534
DOWNTOWN ST PETE
Active Statistics
Active Listings: 117
Pending Listings: 48
Avg. Days on Market: 107
Avg. Listing Price: $1,254,000
Avg. Listing Price per sq.ft: $696
Sold Statistics
Total Sold: 87
Avg. Sold Price: $995,000
Avg. Sold Price per sq.ft: $676
GULFPORT
Active Statistics
Active Listings: 12
Pending Listings: 5
Avg. Days on Market: 66
Avg. Listing Price: $462,000
Avg. Listing Price per sq.ft: $413
Sold Statistics
Total Sold: 6
Avg. Sold Price: $423,000
Avg. Sold Price per sq.ft: $385
Want info on a specific neighborhood? Email me at ao@aaronoetting.com and I will send it over!