PROView - January 2009 - (Page 6) the final decision from a bank. Agreeing with Wazio, Purtee adds, “their reluctance may come back to haunt them soon. Those who now hold off on purchasing a home may miss out.” A Shift in Consumer Preferences Condo versus Single Family Homes “Sand Key is completely built out. Clearwater Beach is largely built out. The condo craze we saw in recent years had a limited effect on that particular market as relatively few condos were added to the inventory.” Fortunately, he says, we’re not seeing new condos coming to the market in the foreseeable future. “We went through investor-owned units. What we have now is a correction of prices.” “Today, we are seeing those same brand new luxury condos available with amazing discounts.” —Garges Purtee, Keller Williams Realty The majority of those who are interested in buying property right now seem to be looking for single family homes. While the single family home market somewhat has stabilized in the last six months or so, the condo market continues on a declining path. According to Purtee, there are several reasons behind the sluggish condo market. She refers to the first reason being consumer preferences now turning away from condos. “We’re now returning to consumers having a fundamental belief in the value of land. A condo loses that perspective.” Purtee also points to the make up of the condos that flooded the market a couple of years ago. “With high land value, increasing building costs and lower density allowed, the result was large floor plans with skyrocketing price points.” Purtee says that the condo glut hit right as the market went into its downturn. Developers were trapped by their high costs and simply were not willing to sell below their cost. “Today, we are seeing those same brand new luxury condos available with amazing discounts.” Geographical Differences All geographical areas may not be created equal. While median price, price class distribution and the number of listings provide an overview of the marketplace, countywide statistics may not paint an objective enough picture of what’s happening in specific parts of the Pinellas County marketplace. Wazio specializes in the condo market in Clearwater Beach, Sand Key, and the Belleair area and he points to the fact that while some areas may have seen too quick of an expansion of condos, others have not. Purtee agrees with each area being different. She points to how some areas may fare differently from others around the county. “The barrier island communities are their own microcosm market. Because of the desirability of the beach, the appeal of this area should rebound faster than inland in spite of the fact that the Tampa Bay market as a whole, as Forbes Magazine predicts, may still lose value in 2009.” “Condos, particularly along the beaches stalled first so it only makes sense that following the largest price drops those areas may be first to rebound and return to a more stable market,” according to Wazio. Who Buys Today? So, besides the buyers “in waiting,” who is currently buying condos? According to Wazio, the majority of his customers are from the Northeast and the Midwest. Asked whether he’s seeing an issue with people being stuck with homes to sell up north, he paints a picture contrary to what maybe most may have. Wazio says that his buyers are end-users, in other words people who fully intend to live here or own the property as a second home. Gone, though, are the investors hoping to make quick deals. “Many would-be buyers waited during the boom market. Now they’re ready, and they have the cash available to act.” Purtee agrees. “As the market began to show indications it was on a downward spiral, we saw people and corporations cashing out.” She says that in many cases, individuals got their assets out of the market before the tumble began. She points out that currently there is a huge amount of cash on the sidelines and the question is now where they will “park the cash.” (See CONDOS, page 20) 6 PINELLAS REALTOR® ORGANIZATION January 2009
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