Sunday, October 20, 2013

State of the Market Oct 2013

As we approach the end of another record setting year for property sales in Cocoa Beach and Cape Canaveral we find ourselves at an interesting point in the recovery. At the peak of the boom in 2005, 805 condos closed in our two cities. Just three years later the number of property sales bottomed with only 371 condo sales that year. Prices continued to decline through 2009 and 2010 for most market segments and neighborhoods even as the number of sales was increasing. We saw 612 condos close last year and are already at 561 so far in 2013.

The price decline began slowing around 2011 for most properties and prices have been steadily inching upwards since. This is due in large part to the steadily decreasing number of available foreclosures and short sales. Of the 612 closed condos last year just over a quarter were either foreclosures or short sales. Compare that to the 25 total foreclosures and short sales available this morning in Cocoa Beach and Cape Canaveral.

Our condo inventory for sale has been hovering between 250 to 270 units since the middle of the summer. That's half what we had as recently as 2010. This hyper-low inventory means that there are not enough priced-right listings for the interested buyers. A big part of this is the large percentage of the properties for sale that are wildly overpriced. Many of the new listings are sellers who were waiting for the market to turn around before putting theirs up for sale. The market has definitely turned and is heading up but not nearly at a rate to justify the prices I'm seeing. The current scenario is unlikely to give many of these sellers their dream  prices.

For those of you looking to buy, now more than ever, you need to know what represents a fair price for the property you're looking for. Accept that you are not going to be able to purchase for last year's prices in most cases but be informed enough to be able to recognize the crazy over-priced listings. No need to get angry at the sellers who have unrealistic expectations. They are not trying to rip you off. They are just misinformed and in need of a reality check. Sellers, please have your agent do a current comparative market analysis for your property and price it accordingly IF you really want to sell. We expect you to price it above what you're hoping to get because you know that the buyer is going to expect to get it for less than asking. That's all part of the game. Buyers, forget the average selling price to last asking price ratio. Just because the average sold condo in September sold for 92% of last asking price doesn't mean that the one you want should sell for that price. You're not buying an average. You are buying one property and you should know what it's worth and what you are willing to pay to own it. Knowledge, it's not just for nerds

Cipolla's second fundamental law of stupidity:
2. The probability that a certain person (will) be stupid is independent of any other characteristic of that person..