Sunday, May 16, 2010
Our MLS condo inventory in Cocoa Beach and Cape Canaveral appears to have stabilized at around the 600 unit level having been below that number for the last seven months. In May 2006 inventory was close to the peak at 1047 units while today, four years later, we stand at 581 total MLS-listed condos and townhouses in the two cities ( short sales and bank-owned units are down to 19% of the total). With monthly sales running at almost the same level as sales in 2006, and 45% less inventory, there appears to be a dynamic building that, absent a flood of new inventory, could impede continued price erosion. This is not a bottom call, just an observation of market conditions that haven't existed for some time. There is still an unknown quantity of underwater and otherwise troubled owners who are not yet represented in the actively for sale numbers but we know from the stats that a significant number of the distressed owners have already been shaken out in the brutal decline of the last three years.
The predicted higher mortgage rates have not materialized so far. Rates have been in a steady retreat since March with the average rate for 30 year fixed rate mortgages back below 5% this week. I was made aware yesterday of new mortgage money available for Florida condo loans to qualified borrowers with 25% down. Those of you paying cash need to get your proof-of-funds documentation together before offering. All foreclosures and many other sellers are going to require proof of funds if you offer cash. Proof of funds documentation is usually an account statement in your name (account numbers can be blacked out) showing liquid funds in excess of the purchase price or a letter from your banker stating the same. Don't grump. This is no different than having to document credit worthiness when applying for a mortgage and is just part of the process.
"There is nothing wrong with change, if it is in the right direction."