Saturday, July 30, 2011

Not really for sale

Reasons for fishing numbers 8 and 9, above and below. Grill not necessary.

There are any number of properties advertised for sale that are not really for sale. There are owners in situations who may need to demonstrate to someone like a bank, a relative or a court, that they are trying to sell a property when, in fact, they have no intention of selling. In most cases these kinds of "not really for sale" properties are overpriced to discourage actual inquiries. Another type of "NRFS" property is one with multiple owners with one owner unwilling to sell. That owner's unwillingness to sell may not be known to the others until an offer actually arrives. The list includes relatives, in-laws and ex-spouses. They can all have the power to prevent a sale.

There are other listed properties that aren't really for sale without that fact being known to any of the participants, like the short sale listings that have no chance of being approved because the deficiency is too big to fly or the seller can't or won't provide satisfactory documentation to the bank. They are on the market but can't be purchased. Then there are sellers who think they want to sell but have an unrealistic idea of their property's worth. Their idea of value may be based on a neighbor's sale in the past, coffee shop talk, misinformation from their listing agent or just fantasy. Whatever the case, the condo owned by the guy who "will not sell for less than X dollars" is not for sale if X dollars is much above market value.

A decent portion of our MLS inventory matches one of the above descriptions of "not really for sale", most in the unrealistic expectations category. Since there is no good way to determine which listings fit one of these categories I have used the total Cocoa Beach and Cape Canaveral MLS inventory numbers to calculate our burn rate. Understand that, since there is an unknown number of "NRFS" properties included in the inventory, the months supply numbers are actually less than the numbers below.

First: Condo and townhouse MLS inventory. Using the most recent three months closed sales compared to today's total inventory we find that we have just a six month supply of units priced below $200,000, our most active market segment. For units priced between $200,000 and $400,000 we have a 13 month supply. Once we get over $500,000, we have enough units currently for sale to last for 42 months.

Total single family home inventory is 80 properties. The most active price segment is under $200,000. Today's inventory in that price segment will be gone at the current sales rate by mid-October. Between $200,000 and $400,000 we have a 6 month supply, enough to last until the first of February. There are enough houses asking over a half million to last for 19 months without factoring in the "NRFS" listings.

If you're looking in the active market segments you are probably already aware of the dearth of decent listings. The burn rate tells us that this is not getting any better. A good strategy at this point is to have your wants and needs well defined and to be aware of the competition for good properties. Good ones don't last long. We listed a really nice Snug Harbor home in July that was under contract in 5 days and closed in eight. A smoking deal Michelina short sale this past week had three offers on the first day. I've seen several other closed sales in the month of July that qualify for smoking deal status. Good deals are out there for attentive and ready to move buyers. I'll detail the standouts in my next post on the July wrap-up.

"Politics is when you say you are going to do one thing while intending to do another. Then you do neither what you said nor what you intended."
__Saddam Hussein