What a beach day it was yesterday. Light offshore winds and family picnics up and down the beach. Did I say HOT? It was hot. Certain areas of our market continue to be red hot, as well.
I can't seem to turn on the news or pick up a magazine without being confronted with the phrase "real estate bubble". For an investor in a hot market such as Florida, that phrase is sure to increase the heart rate. I just purchased another waterfront property myself this month. Am I crazy? Perhaps. I'm a little different from most of the profiled flippers in the money magazines in that I live and work in my market as an active real estate agent and know from first hand experience the trends of supply and demand in my market. I have access to statistics and I deal with buyers and sellers every single day. I think I have mitigated my risks by identifying the areas of my market that are most likely to give me a good return with the least risk. All property types in my market are not equal in their risk and likely return. Having said that, I could be wrong.
Mortgage rates took another drop this week and the national average is now at 5.65% for a 30 year fixed rate as reported by Freddie Mac. That's lower than the point at which we began the year. The predicted rise in mortgage rates is taking it's sweet time to happen.
MLS statistics this Memorial Day in Cocoa Beach and Cape Canaveral.
Single family homes___54
Contracts in the last 14 days
Single family homes___9
I don't want to keep repeating the same message in every update but the statistics keep pointing to the same thing; the under $500,000 range is where the action is right now in our market. We have a supply of 147 properties over $500,000 and had 6 sales in that range in the last 2 weeks. At that rate it will take almost a year to sell our current supply. Contrast that to our supply of 329 properties under $500,000 selling at a current rate of 23 per week and you see that we have less than a 15 week supply. If you're on top of numbers like this, it's easy to make decisions about where to invest your money here. You can still purchase very nice direct river condos with beautiful views of the islands like this for just over $300,000.
I could be wrong, but, I believe that condos in this price range in good locations are your best bet for continuing returns on your investment. If you'd like to know what's available out there, shoot me an email at firstname.lastname@example.org I promise to freely share my knowledge and perceptions of our market with you as my buyer in a completely unbiased manner. Cocoa Beach is small enough that, if you buy here, I'll probably be bumping into you in the grocery store, so, I want you to be happy to see me. Enjoy the holiday and don't forget the sunscreen.
Incidentally, updating an ongoing story, there are 35 MLS-listed, assignment-of-contract units active in Portside Villas today. Prices continue to rise at the same time that supply is increasing. This anomaly can be explained by the unprecedented under-pricing of these units at last years pre-construction prices and the ongoing optimism of the investors. Those who have already flipped have made incredible returns on their investments but the remaining sellers continue to increase asking prices. Is $262,500 too much for a brand new 1168 sq. ft. 2 bedroom condo walking distance to the beach and the Port? I'll keep you posted as this story unwinds through the end of the year.