Saturday, November 04, 2006

The Big Chill

It's a chilly market out there, people. Motivated sellers have been progressively chopping prices as they probe for the magic number that will generate an offer but buyers, for the most part, have frozen in their tracks. We have reached a take it or leave it point for many sellers. Contrary to popular opinion, most sellers are not in trouble and many are quite willing to ride out the downturn. If you didn't catch my story on the "alternative universe" earlier this year take a moment to read it. It's about the underlying market chugging along while the speculator market grabs the headlines and gets the reality shows. As the chief economist of the National Association of Realtors, David Lereah, is fond of saying, there is no national housing market. Heck, there's not even a Cocoa Beach and Cape Canaveral housing market. For the record, I'm not impressed with Mr. Lereah's self-serving rhetoric but he is right on at least one point, that there are markets within markets that operate on their own and separate dynamics.

While there may be scores of pre-construction condo sellers who are in very real trouble, the same can't be said for the average seller of existing condos and single-family homes. There is a trickle-down pressure on all properties when one segment becomes sick, BUT, there are many sellers that can continue to enjoy their beach homes while waiting out the market. The ones who must sell are starting to price their properties aggressively and deals are being made. The bottom appears to have been passed at Portside as the last of the super deals have been scooped up and all offerings there at the moment are priced considerably above the recently contracted units. There are currently no 2 or 3 bedroom units offered under $200,000. Like the guest gurus on CNBC are fond of saying, "It's a stock picker's market." There will always be individual issues within a market that move in a direction opposite that of the market. Do your homework or talk to someone like me who does it for you.

MLS stats for October 2006 - Cocoa Beach & Cape Canaveral

single family homes____8
condos & townhomes___20

single family homes____140
condos & townhomes___995

Cocoa Beach and Cape Canaveral are almost equally divided on condos sold or listed but Cocoa Beach has the majority of single-family home activity. Of the 20 closed condos, only 1 was for more than $500,000, and 12 were under $300,000.

In a bizarre move this week, the National Association of Realtors launched a 40 million dollar advertising campaign themed "Now is a Great Time to Buy or Sell a Home". Think about that for just a second. The body of the ad targets buyers only but, apparently, NAR didn't want to alienate sellers in the process, so, the "or sell" was added to the header as an afterthought. Beware statements from organizations and people that stand to benefit from your acceptance of their declarations. As I'm fond of saying, do your homework. Now might be a good time to buy or sell but it's not because someone spent $40,000,000 saying it. Personally, I think it's a better time to buy than sell and only for specific properties that are priced below recent sales.

Deal of the week; a 2 year-old, 3/2 townhome at Canaveral Woods with garage for $243,000. It's still active as of this writing.