Wednesday, November 28, 2012

More trend examination

Rise of the full moon Nov. 27, 2012
Being a numbers guy I'm constantly doing mental math and looking for patterns in everything. At restaurants I'm silently estimating average ticket, seating capacity and rate of table turn and doing an estimated daily gross instead of just enjoying my meal. It's a curse. I spent a good part of the Art Festival last weekend trying to estimate hourly take for the Kettle Korn guys who had a line at almost all times waiting to shell out $5 or more for bags of yummy Kettle Korn. Let's just say that they had a good weekend. Finding myself this morning without any scheduled property showings, I thought it was a good time to once again crunch the details of the recent sales and try to determine some of the current trends. I used the most recent completed month, October, for closed MLS-listed condo sales in Cocoa Beach and Cape Canaveral. Not surprising is the continuing reduction in the percentage of cash sales nor is the continuing shrinkage of distressed sales. Selling price as a percentage of asking price remains high as does the high number of quick sales and full asking price sales. Stats from those sales are below.

Total condo and townhomes sales - 55
Distressed (short and foreclosed) - 25% - down from 34% in September
Financed with a mortgage - 47%
Cash sales - 53% - down from 75% just a year ago.
Sold in less than 30 days on market - 44%
Sold for full asking price or more - 24%
Average selling price as a percentage of asking price - 96%

The busiest price range was between $100,000 and $200,000 with 40% of all sales falling in that range. 35% of the sales closed for less than $100,000 and 25% closed for more than $200,000.

Condo inventory this morning stands at 286 units with an additional 50 single family homes for sale in the two cities. Only 11% of the active listings are distressed. With the current dynamics it is more important than ever to be well-informed if looking to buy. With so much competition for the priced-right listings (almost half selling in less than a month and a full quarter selling for full asking or more) buyers need to know how to identify those listings. Throwing out random lowball offers isn't working right now. The lowest discount to asking in October was 15% and was a sale in which I represented the buyer. Just throwing out an offer that was 85% of asking would not have succeeded. We were able to show the seller that their asking was unreasonably high and produced solid comps to justify our reasonable offer. By knowing the market and doing our homework and then demonstrating the reasoning behind our offer we were successful in our purchase.

Low offers without justification have very little chance of success in this market. Conversely, knowing what the current market is paying for properties with specific criteria, basing an offer on that knowledge and providing substantiation with the offer is a recipe with a very good chance of success. For unique or low-supply property types, buyers may have to try another strategy. Your buyer's agent, if he's good and if he's doing his job, will know what tack to take. As always, knowledge is power. Have questions? Call or email me.

"There is no excellent beauty that has not some strangeness in the proportion."  ______Francis Bacon