Tuesday, July 25, 2023

Rising Tide of Inventory

Inventory of homes and condos for sale in Cocoa Beach and Cape Canaveral continues to increase. There are a total of 176 condos and townhomes and thirty single family homes for sale in the two cities. The median days on market for the current inventory of condos is at two months. Considering that over 80% of the condos closed so far in July sold in the first four weeks on market it seems that the majority of the current inventory is probably overpriced. There is less indication of widespread overpricing among single family homes with median days on market of current inventory at 39 days. 

Cash continues to dominate the condo market with 70% of the closed condo sales in July going for cash. I expect the over-priced listings to continue to languish while fairly priced new listings pick off the buyers. Anyone with a condo listing older than four weeks is advised to look at recently sold prices of comparable units and to adjust their expectations and asking price accordingly. Buyer mania has cooled and hoping to set a record selling price is not producing results for those who are still trying except for those few with extraordinary properties. Realistically priced units are selling.

"I would exercise caution with pre-construction condos and be aggressive (low) with offers. We have shifted from a seller's market to a buyer's market in high-end condos in a very short time." __Larry - March 4, 2005

Friday, July 14, 2023

Does This Make My Butt Look Big?

(This is a repeat of a post from 2009 that is still relevant today. As I've mentioned in recent posts, there are condos that will not satisfy any lender's requirements regardless the loan officer's eager optimism and buyers and their agents may be wasting their time looking at them.)  

Does this make my butt look big? Everyone knows there is only one correct answer to this question no matter who is doing the asking. There is another popular question that also has but one answer. That question is one that is posed to loan officers and mortgage brokers every day, "Do you foresee any issues with my getting a loan on this property?" Day one in loan officer school the class is asked this question and then instructed to shout in unison, "No, not at all." over and over until the phrase is firmly imprinted on their brains. Then, when "the question" is posed by an actual borrower, the neuro lingual programming takes over without any conscious thought and "the answer" comes forth confidently. Doesn't matter that the Florida condo that the borrower is asking about is 1800 miles away from the lender's office or that the last Florida condo loan that the loan officer did was in 2006. "We can do it" he says with a confident smile. Right. He can do it until he can't and that usually doesn't becomes evident until well down the road towards closing.

All borrowers who are buying a Florida condo would be well advised to talk to a lender in the market in which they are purchasing. There are issues with Florida condo loans that lenders will not encounter anywhere else. A great credit score and previous relationship with a distant lender might not be enough when the hurdles to closing start appearing. A good local lender who is active in our market will have knowledge about Florida-specific loan issues and will likely have encountered many of the sure-to-happen problems with previous loans. That knowledge allows him to be proactive rather than reactive in addressing these issues. Anticipating and working to solve an issue before it presents itself can be the difference in making a closing date or not.

Disclaimer: I'm not saying out-of-area lenders can't close deals here. It happens all the time, but, from plenty of personal experience, I can say without hesitation that the odds of having problems are increased when the lender is not local. Just don't expect a loan officer to admit that his performance out of state may be compromised by lack of local experience. Remember the NLP "answer" from class. I can close deals and represent buyers anywhere in the state of Florida but I don't venture outside my market because I can't do the best possible job for my client in a market I don't know. Greed and false confidence encourages many realtors and lenders to venture out onto the thin ice, often to their client's detriment. Be skeptical when yours fearlessly claims proficiency in an unknown market.

You may leave here for four days in space
But when you return it's the same old place
The pounding of the drums, the pride and disgrace
You can bury your dead but don't leave a trace
Hate your next door neighbor but don't forget to say grace 

___________Barry McGuire - Eve of Destruction, 1964