Rapid Changes in Pinellas County Commercial Real Estate
Posted by Buddy Sauter and Associates at 1/27/2009 8:54 PM 
Categories: Inventory, Pinellas County Commercial Real Estate, 1031, Buyer
Categories: Inventory, Pinellas County Commercial Real Estate, 1031, Buyer
The market is changing rapidly since the first of the year and I wanted to give a little overview. If you find this helpful, please subscribe (look on the LHS of the page a little lower for the subscription box. Once subscribed, or occasional posts will come straight to your email).
Get comfortable with the assumption that the market is defined by what properties are actually selling for and not what the asking prices are. If you are a seller in this market, that can be a hard pill to swallow, but it is the undeniable truth. If you are a buyer, you need to pay even more attention. Missing this point means you will also miss the buying opportunities,
Next, get comfortable with the fact that the market is in decline. This means that the market price for a property is less tomorrow than it is today. Not by much, but that is the trend. So the real likely selling price for a property is less than what one sold for today and much less than what is being asked.
What does this mean to us here in Pinellas County?
Properties here are selling for much less on average than the average asking prices. The differences vary by sector but are now so large that the issue can not be ignored. In some sectors, the differences render many list prices meaningless.
The following chart shows the percentage differences between the Ask and Sell prices here by Sector.
Obviously you better keep this in mind when buying property these days. For some time now I have been advising my buying clients to get comfortable making low offers. The folks who have been following that advice have gotten some great deals. The folks who are uncomfortable offering more than 10% below the asking price simply will not benefit from this buying opportunity.
The chart below gives the same information in a different way.
So if you plan to write an offer on industrial space and it is priced like the rest of the market, then write an offer 35% below the market and expect to settle in during negotiation around 25% below asking.
One more thing. This is a bad market. If you are selling. Price it low and get it sold. Otherwise you will be pricing it lower tomorrow.
Source: Florida Gulf Coast Commercial Association of Realtors
Get comfortable with the assumption that the market is defined by what properties are actually selling for and not what the asking prices are. If you are a seller in this market, that can be a hard pill to swallow, but it is the undeniable truth. If you are a buyer, you need to pay even more attention. Missing this point means you will also miss the buying opportunities,
Next, get comfortable with the fact that the market is in decline. This means that the market price for a property is less tomorrow than it is today. Not by much, but that is the trend. So the real likely selling price for a property is less than what one sold for today and much less than what is being asked.
What does this mean to us here in Pinellas County?
Properties here are selling for much less on average than the average asking prices. The differences vary by sector but are now so large that the issue can not be ignored. In some sectors, the differences render many list prices meaningless.
The following chart shows the percentage differences between the Ask and Sell prices here by Sector.
Obviously you better keep this in mind when buying property these days. For some time now I have been advising my buying clients to get comfortable making low offers. The folks who have been following that advice have gotten some great deals. The folks who are uncomfortable offering more than 10% below the asking price simply will not benefit from this buying opportunity.
The chart below gives the same information in a different way.
So if you plan to write an offer on industrial space and it is priced like the rest of the market, then write an offer 35% below the market and expect to settle in during negotiation around 25% below asking.
One more thing. This is a bad market. If you are selling. Price it low and get it sold. Otherwise you will be pricing it lower tomorrow.
Source: Florida Gulf Coast Commercial Association of Realtors
the coments seem like a financial broker advsing his clients to sell all their investment portfolio when the market is off by 40%. When in reality, good brokers are not advising them to do that. Better advice would be to look forward and if it is near bottom, see if you can hang on a bit longer.
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Thanks for the comments. You are absolutely right that holding is best if possible. Unfortunately, there are many who don't have that choice. And if you are in a position where you must sell, better to make a concession and get it done.
The real intent of my comments is to illumininate the actual situation in Pinellas county. The market is likely closer to a bottom that people realize and the only way to see that is to look at the selling prices, not the listing prices. The big difference between the two will drive a correction in listing prices going forward.
I expect in the months ahead the listing prices will continue to come in line with the selling prices. The buyers will step in and the cycle will repeat.
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