Sunday, March 22, 2009

How Soon is Now?

Late afternoon vapor trail from the launch of shuttle Discovery last week.

In the week since my last post, five more condos have closed in the Cape Canaveral and Cocoa Beach MLS. Out of the five, four sold within 19 days of being listed. That, ladies and gentlemen, is evidence of aggressive pricing. As I've been saying, price it right and it will move.

A few aggressively priced active condo listings selected from the MLS this morning. Several are short sales;

3 bedroom, 3 year old, 1562 sq.ft. no garage in Cape Canaveral - $132,500
3 bedroom, 3 year old, 2424 sq.ft. 2-car garage Cape Canaveral - $180,000
2 bedroom, 5 year old, 2055 sq.ft. 4th floor direct river Cape Can. - $239,900
2 bedroom, older 2nd floor, direct river, 1244 sq.ft. w/garage
__and boat storage in south Cocoa Beach - $150,000
4 bedroom, 7 year old, 1670 sq.ft.. 2 car garage Cape townhome - $230,000
2 bedroom, 2nd floor, nicely remodeled direct ocean Cocoa Beach - $245,000

In addition to these listings there has been a slew of price reductions on unsold new units this month, but, until the new complexes are down to the last remaining units, I can't recommend taking the risk of the related association uncertainty in these complexes. One developer added 16 new luxury units to the MLS in the last week at prices ranging from $399,000 to $1,700,000. We now have an inventory of 101 condos asking over $500,000 in the Cape Canaveral and Cocoa Beach MLS. I expect price reductions to continue in this over-crowded and slow-moving segment of our market. Sales in the 11 weeks since Jan. 1 in this same (over-$500,000) price range total 3 units, 2 of them at the Meridian.

While prices continue to deteriorate in all price ranges, inventory, especially in the sub-$500K range, has dropped considerably from it's high three years ago. We are now over 30% below our peak inventory levels set in May of 2006. Deals are still there but they are disappearing quickly when the price hits the sweet spot. Competition for the deals in the sub-$400,000 range is keen.

The national average for 30 year fixed rate mortgages according to Freddie Mac's weekly survey dipped below 5% this week. That's good news for borrowers IF they can meet the ever-increasing requirements for a loan. If you're shopping for a condo, talk to your lender before you look at properties. That lender you've always worked with may not be able to write a loan for a Florida condo and/or your down payment requirements may be different than you think.

"If past history was all there was to the game, the richest people would be librarians."
__________________Warren Buffet