Saturday, March 30, 2024

Longer and Lower

The average time it takes to sell a residential property in Cocoa Beach and Cape Canaveral has been rising steadily since December when the average time between listing and accepted contract was 69 days. By the end of February the time to sell had doubled to 138 days. During the same time the average selling price as a percentage of original asking price had dropped to 90% from 94%. 

Looking at the current for sale inventory, the median time on market is 109 days for single family homes and 106 days for condo and townhome units. In addition to taking longer to sell and at a lower percentage of original asking price, condo fees have been rising steadily in response to higher master policy costs and funding for newly required structural reserves. The median condo fee for units closed a year ago was $500. Median monthly condo fee for units for sale in oceanfront complexes is $785 and for all currently-listed condos it is $642. The number of units in older two story buildings with lower fees that aren't subject to the new legislation is keeping this number misleadingly low.

Condo units contracted since first of February had a median time on market half as long as the unsold inventory. That suggests to me that newer listings have been pricing more competitively and have been picking off the existing buyers while older listings have clung to prices that the market is rejecting. I would encourage hopeful sellers to examine their asking prices and weigh them against recent selling prices and adjust accordingly. Inventory continues to grow while the impact from the new reserves remains unknown for many condo complexes. By the end of the year when all affected complexes must be in compliance, the median condo fee is certain to be higher than at present and substantially so in many cases. The impact on the total condo market does not look to be positive except for units in one and two story complexes. The much-lower fees make these units attractive in comparison.

This month marks the 20 year anniversary of this blog. I started writing it in 2004 on a whim and soon realized that I enjoyed it. There was a lot to write about then. There were lots of new construction condos and mortgage money was there for the taking  for anyone regardless of their assets or income or lack of same. We now know how that worked out. By late 2006 the signs were there that the end was near. The market began crashing in earnest in 2007 and we endured eight years of distressed sales after prices collapsed. In 2007 there were zero distressed sales (Foreclosures and short sales). The peak was 2010 when 56% of all residential sales in Cocoa Beach and Cape Canaveral were distressed. It took six years to work through all the short sales and foreclosures and by 2016 we were back to a single digit percentage (5%) of distressed sales.

The rest of 2024 looks to be eventful for our local real estate market with the looming condo inspection deadline and the proposed changes to the fundamentals of how real estate is transacted. I look forward to the outcomes and will continue to report on both. Happy Easter, everyone.

"Being famous on social media is like being rich in Monopoly." _Terry Hayes

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