The "Mexican Standoff" continues with an edge towards buyers

I'm surprised everyday waiting for the other shoe to drop and an article to come out telling us what most Tampa Bay area Realtor's already know. Absorption rates (Inventory Turnover) has been dropping since it hit a peak of 59% back in June 2005. The absorption rate is determined by dividing the total number of units sold in a month by the total number of listings in MLS. It looks like it may have bottomed out in January 2007 at 4.2%!! because last month it improved slightly to 5.4%. That means we how have about an 18 month supply of homes on the market with thousands being added every month. Up until now the sellers have been standing firm and the buyers have be waiting for prices to drop, hence the above mentioned "Mexican Standoff". Who will break first is everybody's guess but it would seem that the buyers have the statistics on their side. The condo market in Pinellas is even worst with a 3.5% asorption rate in February 2007, which rebounded a tad from a low of 2.8% in January 2007. On the bright side for sellers is that interest rates have dropped a little and are now around 6 1/4% which helps and will most likely go even lower by the end of the year with the economy continuing to slow. However, we haven't seen the worst of the foreclosures yet which will put more strain of home prices. Having said all that, sometime later this year and into 2008 will be a good time to buy. Lower rates and lower home prices will be too tempting for buyers who have been sitting on the sidelines for over 2 1/2 years. The pent up demand for homes is growing everyday and will finally burst sometime in the next 2 years. Until then buyers and sellers will continue to just sit and stare at each other. To see more statistics go to Tampabayrealtor.com/stats