Monday, March 22, 2010
Tracking the decline
North jetty, Sebastian Inlet
Another Cocoa Beach, Four Seasons non-waterfront unit with garage closed last week for $110,000. This particular unit had been on the market for a year, priced well above the comps until right before Christmas when reality finally set in and the price was dropped to a number in line with the market. With several sales every year of these particular units in that popular complex, I thought it would make a good subject for a micro review of the history of the decline. I have restricted this review to sales of non-waterfront units in Four Seasons with identical floorplans and garage.
Looking back to 2004 (MLS sales only), the year before peak prices for these units, there was one sale for $188,900. The market was red hot at the time and prices were notching up on all property types with every subsequent transaction. The next year, 2005, the peak of the mania, saw four sales of these units; $195,000, $215,000, $220,000 and $222,500 (the all-time high). Prices remained strong through 2006 even though there were subtle signs that the party had ended. There were four sales that year; $198,000, $200,000, $200,000 and $215,000.
The fading of the bloom was becoming obvious to most by 2007 when only one of these units closed for a shocking $159,000. Cautious buyers re-entered the market in 2008 and purchased three units for $150,000, $159,000 and $165,000. Long-time owners were relieved that the decline appeared to have abated with a year of steady prices. The joy evaporated when two units sold early in 2009 for $132,000 and $133,500.
The seller of the unit I mentioned in the beginning listed his unit early in 2009 for $157,900 shortly after the two sales in the low $130s. It sat there along with several other over-priced units for the remaining nine months of 2009 with no action in the complex. The sellers began lowering their asking prices late in the year and 2010 hit the ground running with three closed sales as of today, March 23. The highest price was $130,000 for an above-average, totally remodeled unit and the other two went for $103,000 and $110,000, the lowest prices in the complex since 2002 and only about double their brand new price in 1980. There is only one of these units actively for sale today, listed 20 days ago and hoping for $135,000. Hope springs eternal.
"If only. Those must be the two saddest words in the world."