Tuesday, February 17, 2009
Pharaoh Has Arrived
Ancient Egyptian temple in Florida? No. Just a corner of the new Dinosaur Store and Museum on 520 in Cocoa Beach just west of A1A.
This morning I was reading a draft of a post from one year ago in which I was parsing the reduction in the Cocoa Beach and Cape Canaveral condo inventory and whether or not it signaled some recovery in the market. My conclusion then (Feb 2008) was that there was no indication of recovery. Even with January sales holding steady at the previous 2 years' levels and inventory 17% lower than the high point set in May 2006, the Feb. 2008 absorption rate was at an all time high. Fast forward to February 2009 and the trend is intact. Condo inventory has dropped to two thirds of the May 2006 peak but sales have resumed their slowdown with January 2009 condo sales almost 40% behind January 2008. It seems likely that this trend will continue.
Take-away action points:
Sellers, continue to reduce your expectations and treat all offers as an invitation to negotiate no matter how crazy low they may be. Emotional responses can be costly.
Buyers, be bold but try not to let your schadenfreude show during negotiations. No matter how obvious a seller's desperation, it is possible to destroy your chances of getting a deal with ungracious negotiation tactics.
The most difficult thing in any negotiation, almost, is making sure that you strip it of the emotion and deal with the facts.