If condos were watermelons

How many legs does a dog have if you call the tail a leg? Four. Calling a tail a leg doesn’t make it a leg. Abraham Lincoln

I am perplexed at the level of denial that remains in our condo market. You would think that after watching prices decline for almost 2 years that sellers would have gotten the message. I am negotiating on behalf of buyers on two different condos this week. In both cases, the sellers are clinging to the belief that their condo is somehow worth more than other recent sales in their building even when the other units were more desirable. Folks, it doesn’t matter that your neighbor sold low because he was behind on his mortgage. Nor does it matter that you need to clear X dollars or that Mr. Smith got $XXX for his unit last year or that you spent a small fortune on new granite and stainless. Mortgages are more difficult to get than just a month ago and every time a lower sale closes, your unit is worth less. It’s unfortunate, but it is what it is. If you want to sell, don’t let a qualified buyer walk away because you have an irrational need to get more than the last comparable sale.

I grew up in watermelon country and every summer, the watermelon growers would set up roadside stands selling their melons. If farmer Ed priced his at $5 each and Farmer Cletus next door priced his at $4 , Ed had to match his price or watch his melons sit unsold while losing value until they were spoiled. As long as both farmers’ melons tasted equally fine, the lower price dictated the market. In particularly productive years, prices got really low when everyone had a roadside stand with lots of inventory. I can remember 10 for $1.

The current condo market is like one of those productive years. The market is saturated with inventory and prices have retreated. Cling to the belief that you’ve got a $5 watermelon in a $3 year and you’ll continue to hold it while your neighbors who’ve responded to market conditions sell their’s. There is also the risk that, as more melons ripen, the price will drop to $2. At that point, the $3 you turned down looks good. As silly as it sounds, condos are like watermelons. Deny it if you dare.

September Deals of Note

The deals continue to happen. Closed so far in the month of September;

a 1525 sq.ft. condo in an oceanfront building with this side ocean view for $212,000 or $139/sq.ft., exactly half the original asking price in February 2006 of $425,000.


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Also closed was a brand new 2032 sq.ft. condo in the building below with a view of the river across the street in Cape Canaveral for $238,000 or $117/sq.ft.


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Another 2/2 oceanfront condo with 1316 sq.ft. and the view below sold for $262,000. Originally listed for $329,000 in April this year.


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And my nomination for smoking deal of the month; a 2100+ sq.ft., 7th floor Constellation 3/2 unit that has been beautifully remodeled to like-new luxury status. Sold for $495,000. It was originally listed for $759,900 in February 2006. This unit has expansive ocean views and all 3 bedrooms have sliders that open onto balconies with killer views. The master opens onto the ocean balcony and the other bedrooms open onto a balcony with views across the Banana River to Merritt Island. Below is a shot of the kitchen which has the most beautiful granite I've ever seen.


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There are other listings that are pending that I suspect will break new ground to the downside. I will report on any of note as they close. If you're looking to buy, do your research, be careful and don't be afraid to offer low. If you're selling, don't deny the trend and don't make a mental line in the sand. It has proven to be costly. Next post will be on short sales, the new twist on foreclosures.

Bite in the Bight - 5 years later

The Canaveral Bight, the crescent of beach between the north jetty at Port Canaveral and the tip of the Cape, lined with rocket launch towers, has been off limits to fishermen since the events of September 11, 2001. The powers that be recently re-opened this area to recreational fishermen. I took the opportunity to fish with my friends Chip and Carol from Orlando on September 11, 2007. Along with hundreds of lesser fish and a few drag-screaming blacktip sharks, I managed this small tarpon on 15 lb. spinning gear. Back to the market next post.



This fish was released healthy to fight another day.

Year to Date Numbers

Here are the sales through the end of August and the current MLS inventory of properties offered for sale. Our condo inventory continues to shrink while single family home supply is almost unchanged. Single-family home sales have been robust with July and August being the strongest 2 month period so far in 2007. In the over-$500,000 condo market, 27 units have closed so far this year while there are 139 listed for sale, a 39 month supply at this pace. In the under-$500,000 condo market a total of 265 units have closed through August 31 with a current supply of 743, or a 23 month supply.

Closed 2007 MLS sales in Cocoa Beach and Cape Canaveral

Condos

• August____34___3 over $500,000
  
• July______39___3 over $500,000
  
• June______40___6 over $500,000
• May______35___2 over $500,000
• April______43 __3 over $500,000
• March_____36__2 over $500,000
• February___42__5 over $500,000
• January____28__3 over $500,000

Single Family Homes

• August___9
  
• July_____8
  
• June_____5
• May_____5
• April_____4
• March____8
• February__6
• January___3

MLS For Sale Inventory - September 6, 2007

• Condominiums______882 all prices
• __________________139 over $500,000
• Single family homes__172 all prices
• __________________72 over $500,000

Last week while mortgage lenders were dropping like flies and the main stream media was reporting that jumbo loans would now require a minimum 20% down payment, my wife closed an over-$500,000 home sale with a 100% mortgage. As always, take everything you hear with a grain of salt and get a second opinion even if you're certain of the first. George Bernard Shaw put it more eloquently than I, "Beware of false knowledge; it is more dangerous than ignorance."