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Realtors' Economist Expects Spring Turnaround

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By CARLOS MONCADA | The Tampa Tribune

Published: October 4, 2007

CLEARWATER - Sales are still declining but inventory has stabilized, and the slumping Tampa Bay area housing market should turn around by the end of spring, the National Association of Realtors' top economist said Thursday.

"The inventory, I believe, is topping out right about now,'' said Lawrence Yun, referring to the record number of homes for sale in the region. "Certainly as we move into spring there will be less inventory. With the pent-up demand, it will be imminent.''

Speaking to about 200 members of the Pinellas Realtor Organization, Yun also said that home prices that have been flat or slightly down could start to rise again by late next year.

"The expectation is that prices will remain stagnant through the spring of next year," he said. "From the spring of next year, prices will move away from the negative or the stagnation."

Yun was the featured speaker at the association's What's Happening in Your Marketplace event. He based his optimistic predictions on factors such as the Bay area's strong job market, baby boomers buying second homes, property tax and insurance reform and pent-up demand among those now renting.

What has been most detrimental to plummeting real estate sales, Yun said, is consumer confidence, shaken by media reports about credit woes and a housing bubble.

"The demand, in my view, has been depressed due to the confidence issue," he said. "There are more people with jobs with higher wages than before. There's higher wealth than before. But people are not making that commitment to buy."

Looking long term, Yun predicts that real estate in Florida and the Bay area will outperform the nation in price appreciation. But don't expect a return to the heady price gains seen from 2001 through 2005, he said.

"I do anticipate that Florida home prices will easily outpace the national price growth over the next 20 years," he said. "But 20 percent to 30 percent price increases over a one-year time span probably will not happen."

Locally, Yun expects housing prices in nearly built-out Pinellas County to fare better than in Hillsborough County, where new construction activity is stronger.

"Generally, areas where they're running out of developable land will see stronger price increases over time," he said.

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