Sunday, December 04, 2005

A Tale of Two Cities

It was the best of times, it was the worst of times. As this applies to Cocoa Beach and Cape Canaveral, our current market is the best of times for buyers and the worst of times for sellers.

Like a carrot on a stick urging the horse forward, buyers are retreating just as sellers are coming to terms with the changed market. We have seen an incredible 124 price reductions of MLS listed properties in Cocoa Beach and Cape Canaveral in the last 30 days. Most notable was a developer's reduction of two pre-construction townhome units from $595,000 to $450,000, a drop of over 24%. Will we begin to see developers drop prices in unsold units to prices below what early buyers paid? Possibly. However this plays out, these signs do not point towards a continued bull run. My advice is to stay away from all pre-construction unless you plan to live in the unit. If you are purchasing, research recent sales and be aggressive with your offer and back up your offer with stats. Feel free to quote my stats here as they come from our MLS and are meticulously sorted to eliminate anomalies and mis-stated listings. If the seller is unyielding, move on to another property. There is a record inventory right now and it's increasing daily, so, there is plenty to choose from.

My object here is not to dissuade you from purchasing but to urge you to exercise caution and not to expect the quick profits of the last six years. I'm not predicting a drop in prices but I think it is possible, at least in some areas of our market, most likely new high-end condos. As always, Cocoa Beach is the best place in Florida to live and the coming months may present a good opportunity to acquire a special property. Contact me if you'd like to go out there and play this hand.

The opinions here are my own and, as you may have guessed, are not popular within my industry. I'm just calling it like I see it.

My flow of stats may be interupted in the coming weeks as we shift our MLS to a new system. I will resume the postings of stats as soon as I'm sure of the credibilty of the data.