This is one insider's unpolished take on the current state of the Cocoa Beach and Cape Canaveral, Florida real estate market. I am a licensed agent and partner with Walker Bagwell Properties. My sometimes blunt opinions here are not welcomed by the real estate mainstream. Whatever. Hopefully my insights will allow you to make better decisions about your participation in this market.
Larry Walker - 321.917.5786 - condoranger@hotmail.com
Friday, March 19, 2010
Eye candy
Four thousand words for your viewing pleasure.
"What's another word for Thesaurus?" __Stephen Wright
Sure looks like less inventory makes for less sales. But my question would be--is reduced inventory a a direct reflection of sellers pulling units because of little interest from buyers. If yes-what would generate that situation. overpriced,mortgage problems,short sales being held by banks until price recovery-- ya right,as though thats going to happen in the near term--or are the majority of units still available in less than desirable locations or condition. Also why no drop in HOA fee's. Seems to me reduced property price (overall value in general)should reduce any association fee's by the same percentage. I know of several couples in the northeast that would buy property in your beautiful state if HOA's fee's were lowered to match price reductions.I could not justify paying $6,000 per.on property that has lost %50 of it's value. I would be a willing buyer if all things were equal.
Our reduced inventory is simply that the number of new listings hasn't been keeping up with the unseasonably strong sales since September. The bulk of the older listings are over-priced which is why they haven't sold. The priced-right listings are selling, usually quickly.
Expecting maintenance fees to mirror property value is unrealistic. Maintenance fees are used to maintain the building, pool and grounds, pay for everyone's water, sewer, cable and garbage, pay common electric, insurance on the building, management, association employees and sometimes reserves. The only one of those items that is related to variations in market prices of units is insurance. Insurance is usually based on replacement cost not market value. Right now, selling prices of some condos are below replacement cost. If an association in one of those complexes were to reduce insurance coverage to match market prices, thereby reducing fees slightly, there wouldn't be enough coverage to rebuild in the event of total loss. Not prudent.
In your example you are saying a $3000 per year reduction in fees would trigger your purchase while a recent $300,000 reduction in price wouldn't. Does not compute.
I do believe that it does compute for the average couple looking to buy. I think the key word is "average" I'm not talking about higher end property with a 300K price reduction. I'm talking about the average joe with a good stable retirement income and a recovered--somewhat--401k. A mortgage can be paid off or structured in different ways,but those fee's are no different than a tax and we all know those never go down but up. Lower those HOA's and yes I would be more willing to pull the trigger. But then again--I'm the average "norm" the guy that pays attention to his costs. That average couple can live very well. I would not believe that Maintenance,pool and ground contracts would not reflect the down turn in the economy. These outfits would be adjusting the number of workers and other costs just to stay in business. Associations should be looking for the better price thus reducing fee's and that goes for insurance "costs" not "coverage" So we agree to disagree--thats what makes the world go round. Thanks for your thoughts
Sure looks like less inventory makes for less sales.
ReplyDeleteBut my question would be--is reduced inventory a a direct reflection of sellers pulling units because of little interest from buyers. If yes-what would generate that situation.
overpriced,mortgage problems,short sales being held by banks until price recovery-- ya right,as though thats going to happen in the near term--or are the majority of units still available in less than desirable locations or condition. Also why no drop in HOA fee's. Seems to me reduced property price (overall value in general)should reduce any association fee's by the same percentage. I know of several couples in the northeast that would buy property in your beautiful state if HOA's fee's were lowered to match price reductions.I could not justify paying $6,000 per.on property that has lost %50 of it's value. I would be a willing buyer if all things were equal.
Our reduced inventory is simply that the number of new listings hasn't been keeping up with the unseasonably strong sales since September. The bulk of the older listings are over-priced which is why they haven't sold. The priced-right listings are selling, usually quickly.
ReplyDeleteExpecting maintenance fees to mirror property value is unrealistic. Maintenance fees are used to maintain the building, pool and grounds, pay for everyone's water, sewer, cable and garbage, pay common electric, insurance on the building, management, association employees and sometimes reserves. The only one of those items that is related to variations in market prices of units is insurance. Insurance is usually based on replacement cost not market value. Right now, selling prices of some condos are below replacement cost. If an association in one of those complexes were to reduce insurance coverage to match market prices, thereby reducing fees slightly, there wouldn't be enough coverage to rebuild in the event of total loss. Not prudent.
In your example you are saying a $3000 per year reduction in fees would trigger your purchase while a recent $300,000 reduction in price wouldn't. Does not compute.
I do believe that it does compute for the average couple looking to buy. I think the key word is "average" I'm not talking about higher end property with a 300K price reduction. I'm talking about the average joe with a good stable retirement income and a recovered--somewhat--401k. A mortgage can be paid off or structured in different ways,but those fee's are no different than a tax and we all know those never go down but up. Lower those HOA's and yes I would be more willing to pull the trigger. But then again--I'm the average "norm" the guy that pays attention to his costs. That average couple can live very well. I would not believe that Maintenance,pool and ground contracts would not reflect the down turn in the economy. These outfits would be adjusting the number of workers and other costs just to stay in business. Associations should be looking for the better price thus reducing fee's and that goes for insurance "costs" not "coverage" So we agree to disagree--thats what makes the world go round.
ReplyDeleteThanks for your thoughts
There are 221 listings this morning in Cocoa Beach and Cape Canaveral with condo fees of $325 per month or less.
ReplyDelete