Friday, November 09, 2012
The trend is your friend (sometimes)
Click on charts for larger easier-to-read versions.
The trends of recent months remain firmly in place. Sales held strong through October (55 condos and 9 single family homes) even as the inventory depletion continued. At October's rate of sales it will take just five months to sell the entire MLS inventory.
Distressed listings (short sales and foreclosures) in Cocoa Beach and Cape Canaveral are now at their lowest point since 2007 when there were none. Of our total residential inventory of 325 homes and condos there are only 32 short sales and foreclosures offered, 10%. Only one of those is a single family home.
2013 should be an interesting and different year for real estate sales in our market. I expect selling prices to continue their slow increase as a side effect of the low inventory and diminishing distressed listings. We should also see far fewer total sales next year unless some as-yet-unknown source of properties falls on our market. The rumored backlog of bank-owned properties predicted to flood markets has yet to appear here on the beach. At this point I see no reason to think that we will see any significant number of new bank-owned listings here. County records show quite a few REO properties in other parts of our county but they include very few in Cocoa Beach and Cape Canaveral. Personal anecdotal observations seem to indicate far fewer unit owners behind on condo fees than in recent years. This from daily conversations with owners, board members and property managers. That would support my hunch that there are not a lot of pre-foreclosure or future short sale condos hiding out there.
Buyers need to realize the changes in our market and adjust their expectations accordingly if they hope to purchase a property here. Those hanging their hats on paying no more than the lowest price already recorded for a comparable property will likely be disappointed. Unless there are multiple units selling at the exact same price, only one buyer buys at the absolute bottom. Everyone else has to be content with buying near the bottom. At current prices, missing the absolute bottom by a few thousand dollars does not a bad deal make. Buyers with reasonable expectations (swift decision making doesn't hurt) are still being occasionally rewarded with smoking deals.
“Markets aren’t completely efficient, but they are mostly efficient. Easy money tends to be rapidly removed by the largest, fastest, most connected participants. In other words, someone other than you.” __from Mortality Sucks