Tuesday, March 25, 2008

Math quiz

Good morning, Ukraine.

Remember those questions in the math section of the SAT or similar tests, the ones that went something like; Complete this sequence; 1, 2, ?, ? I'd like to submit a similar question to you. What is the next number in this sequence; 685, 648, 658, 595, 495, ?

Here's another sequence completed; 519, 529, 515, 500, 440, 390, 370, and the final number, 340.

Those sequences are actual histories of asking prices (in thousands) of individual condos, the last example taken all the way to the eventual selling price this month of $340,000. In my example, the sequence could be correctly completed in two ways, either 1, 2, 3, 4, a linear progression or as 1, 2, 4, 8 an exponential progression which these listing histories more closely resemble. My question would probably be more illustrative phrased as "what picture does this sequence of numbers paint?" The picture it paints for me is a hopeful but foolish seller being dragged kicking and screaming to reality. That first sequence beginning with 685 is an as-yet-unsold 2 year-old luxury penthouse condo on the river. That last drop yesterday of a full $100,000 tells me that reality is rapidly approaching. For other sellers playing this foolish game of chasing the market down, the final number in the sequence may turn out to be zero if they run out of cash while hoping for the white knight. Best of luck to those of you trying to sell. When you get it priced right, you'll probably be hearing from me.

MLS inventory March 27, 2008 Cocoa Beach & Cape Canaveral

Condominiums_______867 - 50 under $100,000
over $500,000________126 - only 4 sold since New Year's Day
Single family homes___139
over $500,000_________53

It's been 4 weeks today since I began geographic tracking of this blog's readers. We have had visitors from an amazing 48 states and 42 countries outside the United States. The shot at the top shows the location of the visitors from Europe in the last 4 weeks. Bigger dot means more readers. If you're one of those and have never emailed me, I'd love to hear from you and know what you get out of this blog or, even better, what you'd like to see. Thanks for tuning in.

Believe what you want, but don't believe it around here.
- John Candy

Wednesday, March 19, 2008

Where are the deals?

"What will you do if it's up? Change your diet?"
"No, change my doctor."
___92 year old having her cholesterol checked

A relevant edit would read, "What will you do if it doesn't sell? Lower your price?" "No, change my realtor."

One would think that with our tremendous inventory, deals would abound. That, however, is not the case. The level of denial and wishful thinking remains high. Many sellers are still of the mentality that there just may be an uninformed buyer who will breeze into town and snap up their over-priced listing without noticing that other similar properties are selling for less.

A couple of cases to illustrate the point: I showed a unit this week that is listed for $597,500. I sold the identical unit one floor higher for $445,000 a few months ago. In fact the last three sales in this building were all under $500,000. Wishful thinking will not make that unit worth over $500,000 and will certainly not make it appraise for more than the recent identical comps. Could I make my case and reason with the seller to accept an offer for $445,000? Possibly. I've done it before, but, it makes more sense for my buyers to approach a unit that is already priced closer to the comps.

Case number 2: A new listing in a popular oceanfront building hit last week for $429,900. Seems a little crazy considering that two identical units on the same floor are under contract for $290,000, your's truly on the buyer's side of one. The unit owner is aware of these units as this building notifies all owners of pending sales. I have buyers for this unit but with such unrealistic expectations, a deal is unlikely to materialize.

There are hundreds of similarly mis-priced listings. There are deals out there but they are buried within the over-1000 listings currently active in Cocoa Beach and Cape Canaveral. If you're looking, be careful. You don't want to be the angel that the Matrix-dwellers are hoping for. Be aware of the recent sales and the other similar listings and be able to recognize the ones that are priced right. Know when a lowball offer is appropriate and know when something is priced right. Your expectations of price may be just as unrealistic as the seller's. Best bet; find an animal of a buyer's agent who knows the market and be patient.

"Will it sting?"
"Well, it might sting a bit, but you won't mind too much"
"Well, actually, I would mind if it stings"
______Five year old being offered eye-drops.

Wednesday, March 05, 2008

Less is More

March has started with a bang with 21 residential contracts executed in the first 12 days in Cocoa Beach and Cape Canaveral. This is on the heels of a February that exceeded February 2007 in closed sales. Certainly not evidence of a bottom, but, encouraging nonetheless. Closed sales so far in March worth mentioning are;

Emerald Seas 3/2 closed for $340,000 - was asking $529,000 June/2006
A small Cape 3 BR beach cottage, 2 blocks from the beach $148,000
Canaveral Sands direct ocean, 2nd floor 2/2 furnished sold for $270,000
and, drum roll please, a Solana Lake 2/2 sold for $235,000 after being purchased one month earlier for $195,100.

MLS inventory March 12, 2008 Cocoa Beach & Cape Canaveral

over $500,000________124
Single family homes____139
over $500,000________51

Closed sales in February

over $500,000________2
Single family homes____9 (3 were foreclosures)
over $500,000________1

In memory of John D. MacDonald I will close with a quote from John Maynard Keynes, who Travis McGee fans will recognize as the namesake of the boat of Travis' economist friend, Meyer.

"The market can stay irrational longer than you can stay solvent."