Saturday, June 18, 2011

Things that make you go, "Huh?"

For your consideration, a few interesting new listings. Apparently denial is alive and prospering in the summer heat. At a small oceanfront building near the Pier we have two, both with 910 square feet and partially obstructed side ocean views from their tiny balconies; a 4th floor 2/2 asking $274,900 and a 3rd floor at $260,000. Last sales of side view units in this building over two years ago were at prices between $202,000 - $215,000. Two years later these new listings are asking over $100 per square foot more than recent sales of direct, east facing units in brand new buildings. These are in a 37 year old building in need of repair and have no garage. Weekly rentals are allowed but $300+ per square foot? Come on.

How about an original condition 31 year old Cape Canaveral 3rd floor direct ocean 2/2 condo with 1222 sq ft asking $350,000 or $286/sf? Wait, it has a garage and comes completely furnished with old furniture. Really?

How about a newer (1996) north side view 7th floor, 3 bedroom 2.5 bath unit with 2100 square feet asking $669,900. Before you spit out your coffee I'd like to remind you that it is fully furnished and has a 2 car garage. Surely that justifies $319/sf.

There are plenty of overpriced listings but some, like these, are so outrageous as to defy logic. If you want to sell, do your homework, know the market and price accordingly. The power of positive thinking is not going to make Sasquatch appear with a suitcase of cash ready to overpay for your condo. This post from 2009 still applies.

"I don't know whether I'd rather be shot as a crook or as an idiot." Mike Muckleroy speaking about Ken Lay's comment that he too had been hurt by Enron's demise as his net worth was down to less than $20,000,000.


  1. Huh?
    I've been watching ocean front listings pretty close for a while now and I find a lot of 30 + year old units, that look like 30 + years old, with side views listed for under $200/sq. ft, Remodeled units, which are still in 30+ year old buildings, appear at well over the $200/ sq. ft. price. You mention east facing, new units, in the $200/ sq. ft. range closing. Are these new and outside the MLS, or really big units with big prices?

  2. Ocean Paradise built 2008, unit 202, 2134 square feet, 3/3 closed Feb. 28 this year for $395,000 or $185 per square foot. I realize that square footage comparisons aren't really accurate with big disparities in size. Smaller units should command a higher dollar per square foot, all things equal, however, I can think of no small units in our area that would command anything near $300/sf. We have seen plenty of sales around and below $150/sq. ft. for nice side view units in oceanfront buildings.

  3. So as a prospective buyer, do you anger/insult the seller with a reasonable offer? Or wait until reality sets in, if it ever does? And thanks for another informative post! Anonymous II

  4. You said "reasonable". If a seller responds with anger or is insulted upon receiving a "reasonable" offer, that's their problem. I have had success getting a seller to reconsider their unrealistic asking price by providing comps that support an offer drastically below the asking. Unfortunately, most sellers who are asking well above what the comps suggest as reasonable are unwilling to accept reality.

    There are just as many unreasonable buyers who make lowball offers that can't be supported by the comps. A buyer who makes an offer well below what the comps show as current value should not be surprised at an angry response or no response at all. I have heard sellers say, after receiving a silly lowball offer, "I wouldn't sell to him now for any price."

    I do think it's reasonable for buyers today to expect to get a property for less than what the comps suggest as current value. In a declining market, a buyer is assuming the risk of further depreciation and should get a discount to assume that risk. I make sure to include that statement with my research when presenting offers.