It's unsafe to call a Tampa Bay housing recovery without the presence of two good omens: Homes sales have to start rising. And home prices have to rise in tandem with sales.
For the past nine months the gods have smiled on home sales. Measured year to year, sales have risen every month since August, thanks in part to investors buying foreclosure homes.
What has been lacking are signs that prices have stabilized after the housing market's three-year, 40-percent depreciation.
Based on April home sales, we might be observing a price stabilization trend, particularly in Pasco and Pinellas counties.
From February to April, prices of homes sold conventionally — those unencumbered by foreclosure or mortgage defaults — stopped dropping. Prices have actually inched up in some places in those three months.
Assuming that trend is a statistical false start, Pasco County offers further proof that a price floor is materializing. Since February, homes sold via short sale — when a bank lets a homeowner sell for less than the mortgage debt — have collected almost the same prices as conventional sales.
Why is that significant? Short sales can take months to negotiate. Banks rarely write off such losses willingly. To compensate for the nuisance of lengthy negotiating, buyers of short sale homes expect a large discount.
But these days, at least in much of Pasco, banks are short selling for close to full market price. In February, Pasco short sale homes even fetched more than conventionally priced homes, $82 per square foot versus $79 per square foot.
What's that mean? Regular homes are priced so attractively that banks can't undercut them on short sales. Put another way, non-short sale homes are considered bargains if the alternative is months of short sale red tape.
Either way, it's a sign that prices for non-foreclosure homes probably won't fall much lower.
Pinellas shows much the same short sale phenomenon. In April, Pinellas short sale homes sold for 89 percent the price of conventional homes. Hillsborough County isn't so lucky. Short sale homes collect only 80 percent of conventional sales.
The Tampa real estate company Home Encounter crunched all these numbers and predicted a "market rebound" in Pasco and Pinellas later this year. Alas, Hillsborough's higher per-square-foot prices will postpone a rebound for two years, according to Home Encounter.
For balance's sake, let's toss some cold water on our theory. After all, real estate folk have been hyping recoveries since 2006.
One hitch is foreclosure homes. Once banks repossesses a house, they've been selling the properties for little more than half the market price in Pinellas and Hillsborough. (Pasco is better off. Banked-owned homes are capturing about three-quarters the money of conventionally priced homes, lending more support to the theory that a recovery is near is that county.)
Also keep in mind that Home Encounter's forecasts have suffered the slings of outrageous fortune. Last year it predicted Pasco/Pinellas real estate would mend in early 2009. Then came the financial crisis of September 2008. All bets were off.
But after three years in which home prices had as much traction as a bobsled after a freezing rain, it's a relief to think the runners could be skidding to a stop.