Wednesday, February 13, 2008

If I had a million dollars...

Serendipity. Look for something, find something else, and realize that what you’ve found is more suited to your needs than what you thought you were looking for.
- Lawrence Block

Our market dynamics have shifted somewhat as we've moved into the second month of the new year. Our reduced inventory of condos would seem to suggest a recovery in this part of the market. The inventory of MLS-listed condos in Cocoa Beach and Cape Canaveral has dropped 17% from the high in May of 2006. However, when we compare the rate of sales we see that things aren't as rosy as that number alone indicates. In May of 2006 there was an inventory of 1047 condos with a previous month's sales of 53. Our February inventory is 866 with January sales of 23. That means that even with a higher number of listings in May 2006, the months of inventory was 19 compared to our current 37 months worth of inventory at January's sales rate.

The sales that are closing now have shifted heavily to the under $200,000 range (10 closed sales in Jan.) with the over-$500,000 condos barely moving (2 closed in Jan.). Looking at the current MLS inventory, we have only a 26 month supply of sub-$200,000 condos compared to a whopping 65.5 months of over-$500,000 condos. Add the dozens of not-listed new luxury condos to the MLS inventory and the real supply of half-million dollar plus condos is probably over seven years worth. That is not promising for those hoping for a sale. Even with a swift turn-around, that is simply too much inventory to absorb quickly. The sales that are happening in this price range are at substantial discounts to recent levels. Buyers with cash and the knowledge to spot the deals are picking off the few bargains as they appear. The bulk of the sellers in this end of the market remain firmly in Lala Land wondering why their overpriced luxury condo hasn't sold. Thanks to the Barenaked Ladies for the title which seemed appropriate.

The more difficult decision is usually the right one. -Unknown