July 2008 MarketWatch: Election Watch, Jumbo Issues Cool High End Activity?
We've seen a heightened interest in aggressively priced single family properties
in the below $800,000 range, while showings of higher end properties has noticeably cooled.
It could be that buyers in this price range are watching and waiting for the November Presidential election
to sort out, with all kinds of potential tax implications in play. Another culprit could be a pronounced
tightening of jumbo mortgage monies that many in this price bracket rely upon for purchase of properties.
Regardless of the reason, pricing remains paramount and and with the higher end activity cooling
but pricing remaining as it currently is, savvy buyers in search of higher end properties --
particularly riverfront or canal front with private dockage can dominate negotiations with
sellers desirious of getting a contract on their properties.
For the past 60 days we've seen appreciation instead of the depreciation we've seen
for the past 18 months, in what could be a significant sign that we've bottomed out and are slowly,
slowly returning to modest, sustainable appreciation at perhaps 3-5% per annum. Existing home sales
stats and Case-Shiller Index stats to be released this week may shed light as well, though Case-Shiller
only collates data for 13 markets, and as a result magnifies the import of overbuilt markets in California,
Arizona, Nevada and Florida as it does not include stats for areas of the country with more balanced
conditions.
With pent up demand expected to break open post-election this Fall, August to October remain
prime months for opportunistic buyers to seize the market and make properties of interest theirs
as competition remains slim! We've got great mortgage partners who keep us abreast of creative
products to make financing great buys a reality, whether you're a first time buyer -- like the soon to be eliminated Federally-based Neimiah program that enables sellers to gift as much as 6% of purchase price
for buyer downpayment and closing costs -- or a great new product than enables buyers to securitize
their assets in lieu of liquidation to fund a purchase -- meaning your money can remain where it is,
earning income for you while serving as collateral to fund a savvy real estate purchase.
Bottom line: buyers still rule the roost and there are great buys out there for buyers who have vision
and understand the fundamentals that support the inherent value in Vero real estate thanks to existing
zoning regs that forever limit supply and national demographic shifts and aging Boomers that will impact
demand for the next 15 or so years!
June 2008 MarketWatch: So Much For Sleepy Summer!
So much for sleeply summers in Vero -- our traditionally slow season has been buoyed by the start of pent up buyer demand activity -- with both aged properties reduced to market-appropriate prices to generate buyers and new listings hitting the ground running with aggressive prices reflective of current market pricing.
As predicted, the deep water dockage opportunity we alerted our buyers to earlier in the month took multiple contracts within 48 hours. While that sale was spurred by a seller reduction, the majority of contracts were not spurred to purchase by new price reductions, rather by the Buyers themselves seizing the day by presenting offers for purchase that were negotiated into successful contracts -- and in many cases set the market basement for the prices with their offers that secured the purchase.
Sellers remaining on the market truly wish to sell; we remain firm in our advice that summer will serve as the key months in which to approach properties -- as we've already seen that our tradtionally sleeply summer selling season will be anything but for smart buyers.
May sales volume continued to surge on the barrier island as begun in April, nearly 20% over volume of the year prior, indicating many buyers' concurrence that values have bottomed out and pent up demand is beginning to appear. We remain of the opinion that we'll scud around for a couple of months until inflation, increased demand and reduced inventories begin to put the smallest bit of precipitious upward pressure on pricing this Fall. Check out our BUY-rated list and you'll see the majority have sold .
Buyers interested in our recent high profile uxury property auction: call or write us for a post mortem and for our own short list of BUY-rated oceanview, oceanfront and riverfront estates listed from the high $900s to mutli-milions that we're watching as potential candidates genuine BUY-rated opportunities.
May 2008 MarketWatch: It's Harvest Time for Low Hanging Fruit
Buyers began to at long last act upon leading economic indices increasingly indicating that our housing market has bottomed out in Indian Rvier County as the past week saw a frenzy of contracts flying for opportunistic values of at least 15 properties we noted, ranging from multi million dollar riverfront and oceanfront homes to condos in the $300K range. Many of these properties had languished on the market for years. It is important to note that the successful buyers were not spurred to purchase however by new price reductions, rather it was the Buyers themselves who seized the day and set the market basement for the prices with their offers that secured the properties' purchase. Another interesting note is that several high profile listings hit the market over the past month out of the box with aggressive list prices reflective of the price per foot of sales from the past six months -- an important sign that Sellers and their agents are increasingly recognizing the realities of our market.
And proving that properties priced well sell, and sell fast: an unbelievable opportunity for a sensational custom private dockage riverfornt estate hit the market last week as a short sale, priced barely over land value. As we predicted, it took multiple offers within 72 hrs and we're pleased to report that it was our savvy client whose contract was accepted by the Seller. Well done! Sellers remaining on the market truly wish to sell; we remain firm in our advice to clients that May and June will serve as the key months in which to approach properties -- as we've already seen that our tradtionally sleeply summer selling season will be anything but for smart buyers.
In April, sales volume on the barrier island surged a whopping 125%, reducing our bloated inventory down to 18 mos for homes and 15 mos for condos; pending sales, a forward looking indicator, also surged up 16% from February and up a whopping 75% from anemic December. All signs that after last May's stablilization followed by August's secondary tumble that our bottom has hit and that we will scud around for a couple of months until inflation, increased demand and reduced inventories begin to put the smallest bit of precipitious upward pressure on pricing.
April 2008 MarketWatch: Foreclosure Immunity on the Barrier Island?
A reminder to pundits opining that foreclosures that have yet to hit the books this year mean another year of pricing downturns: all real estate is local. The barrier island has been relatively immune from valuation dilution from foreclosures compared to Vero’s mainland, that has indeed been impacted, as several 2005-era projects seemingly purchased wholesale by investors now facing the likely prospect of foreclosure have seen values decline by as much as 40%. A 30% downturn in second home purchases is the major culprit to the island’s market malaise as supply simply exceeds present demand. Wall Street woes have no doubt contributed to the demand decrease, as have market downturns in key feeder markets along the Eastern seaboard. As the island’s sales are 80% cash, the island’s also been largely immune to the impact of the sub-prime mortgage mess… What’s the Rx to boost demand? Pricing needs to continue to correct, as Sellers’ listed over a year need to listen to the market response and reduce their pricing accordingly or take their homes off the market to reduce inventory supply to meet demand as less supply will begin to put stabilizing, then ultimately, upward pressure on pricing.
Pending Sales Up
The flurry of activity seen post-holidays has manifested itself in an up-tick of pending sales, our preferred forecaster of market movement as it is forward-looking and not backward looking as are closed transactions. Pendings are up 20% over January and February and up a whopping 80% over December. That said, we’ve seen and have heard much colleague anecdotal evidence that there is still a major disconnect between buyers’ and sellers’ perceived value of properties, with many an offer tendered but going nowhere as buyers continue to want bigger discounts than sellers are willing to provide. The good news is that if properties are priced to reflect current market conditions they SELL. Check out our BUY-rated list and you’ll see the majority have sold – and one of our picks slated for this month didn’t make it to publication as it’s already found a buyer… Pricing pricing pricing!
February 2008 MarketWatch: State of Movement
A recent Wall Street Journal piece detailed the fascinating results of the annual United Van Lines survey that often mirrors migration patterns in the country. Among findings: in addition to climate and quality of life, taxes appear to have a direct bearing on where folks are choosing to live, as states without an income tax – including Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming – are gained net domestic migrants. States with onerous state taxes like North Dakota and California -- home to the nation’s highest state income tax – ranked at the top of the out migration list last year with residents flocking to nearby South Dakota and Nevada.
Despite modest tax reform passed in our January 29 referendum and legislators’ promises of more to come, Florida’s two tiered tax system created by the Save Our Homes amendment may well be benefiting neighboring states of North and South Carolina, among the top five states of net in migration last year, despite having a state income tax Florida lacks. While much needed insurance reform has made the cost of coverage far more affordable for full and part time property owners, legislators would be wise to heed the call for continued tax reform to be sure that Florida remains among the top destination states as it was in the annual survey.
Activity Buzz Continues
The flurry of activity we’ve seen and heard of from colleagues can showed no signs of slowing down, as buyers from across the country – and globe – have decided to seize the day and make the market theirs by scooping up at often great deals properties that suit their needs. In many cases pricings are rolled back to 2004 levels and list to sell ratios remain very soft, but buyers, buoyed by our low density, low profile growth policy are confident that our already finite pool of housing product will not be diluted in the future by sprawl and that investment in Vero real estate will return to modest and sustainable appreciation by year’s end. Inventory levels remain about the same, as sellers hopeful for a market turnaround listed properties for sale; as a result we see pricing flat or perhaps down 5% by end of year until inventory levels reduce to meet demand. Oceanfront of any kind and condos remain among the softest property types, while pricing in the under $600 for homes and $1.5-2M range for riverfront homes remain particularly robust, with properties of any type over $3M taking often well over a year to find a buyer. Of condos sold last month, more were in the $2M+ range than any other,perhaps signaling that only buyers at the very high end are not off put by post-storm escalated monthlies that have deterred many buyers, with fees acting as a rock pushing down the valuations of lower priced units….
Januuary 2008 MarketWatch: Buyers Flock To Vero
What a difference a few weeks can make in this heavily psychological phenomenon we call the real estate market. Buyers were an endangered species last Fall through our typically slow holidays. Fast forward to January 2008,
cold weather across much of the nation and whammo! buyers are back big time, seizing what we believe
to be bottom market pricing producing bargains galore of all housing types and products. For months, we've seen pent up demand across the globe via record breaking hits on our Internet site; our own experience with buyers from across the globe since the new year evidences buyers' willingness to buy, reinforced by
similar scenarios expressed to us by colleagues. We've written multiple contracts this week and continue to have calls from clients making plans to come to town now through March specifically to preview properties for purchase.
What does all of this activity mean for buyers and sellers? Buyers, get off that fence -- seize the
market,</b> as the truly good deals are getting scooped up - let us help you figure out which is the best deal to suit your needs. Sellers: re-evaluate your pricing if you're already listed, or ask us for a market valuation estimate to see if our current momentum just might not be the right environment in which to sell your property. Rates will continue to decline as the year progresses, having a stimulative effect on the market as it continues to pull out of its malaise and returns to more moderate --but sustainable -- appreciation toward the end of this year.
December MarketWatch: W Spells Recovery? |
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TRENDS/ANALYSIS: W for Recovery?
Most analysts agree that housing recoveries resemble Ls or Vs – a sharp downturn followed by a flat period (L) leading to eventual recovery or a sharp downturn followed by an equally sharp upturn (V). We contend that our current recovery’s a hybrid, looking more like a W, as our decline appeared to recover in June and July (a V) but then turned downward again at the start of the fourth quarter but again shows signs of recovery (another V, making a W)…Why the W?
Perhaps because this housing downturn was fueled by speculation, loose underwriting standards and Fed interest rate tinkering while other housing downturns had more fundamental economic roots like unemployment and job related issues tied to overall economic growth…
Subtle Changes: Some Properties Are Selling FAST
Yes, inventory remains bloated and sales remain scant, but last month we saw the start of a significant change to sales data: in the past 12-18 months, virtually all sales took over 120 days to find a buyer. Last month, however, only 50% of sales took 120 days to sell, while 20% of sales sold within 0-30 days and another 20% sold within 31-60 days. Proof that buyers are indeed ready, willing and able to scoop up properties priced to reflect current market conditions.
We saw evidence of this recently, as two properties we alerted clients to as the very best choice for them in terms of pricing and locale both took contracts within days of our notification. So listen up, buyers: when we call a property BUY-rated, it will sell – and soon.
Where did our rebound go? Robust sales activity of the past several months that reduced inventory to its lowest point in 18 mos came to a grinding halt in September and October, typically a slow period for our market. Here's the real question: is the slowdown seasonal or symptomatic of erosion in our recovery as buyers continue to wait on the sidelines? For the first time in 18 mos, condo sales outpaced single family home sales on the island and our two tiered market becoming more prevalent, as 41% of inventory is priced below $700,000 while nearly 20% is priced over $2,000,000. The middle section of the market in the $800-$1.8M range continues to struggle, leaving this key 'move -up' section of our market stalled. Inventory is fairly evenly spread across the island, with the Indian River Shores area having the largest number of both condos and single family homes for sale -- a function, likely, of being the small area on the island where our tough density laws have placed the majority of our condos.
A glance at our scant sales -- only 10 houses on the island -- also show our two tiered market, with sales only under $625 and OVER $2M. Good news: pent up demand appears to be strong, as our web traffic since Oct 1 is up a whopping 56% from browsers across the globe, many of whom have currency stronger than our dollar. The $64,000 question is however, when and how much of it will convert to buyers, as pending sales reveal scant activity continuing across the island....
With its finite product supply and predominance of cash buyers, the island remains the stronger segment of the Vero market, yet condos throughout the entire area remain by far the softest type of housing product, a result of diminished buyer demand from overbuidling on the mainland and escalated fees on the island after the '04 storms. Tax reform appears likely to be passed, perhaps accelerating our return to more balanced market conditions. Tax reform of some sort appears likely to be passed, perhaps accelerating our return to more balanced market conditions. As the old adage says "Bells don't ring when you hit a bottom..." it's tough to time a market: once you think it's there, you've likely waited too long.
Our advice to savvy buyers remains unchanged: seize the market and make it yours.
Regardless of your wish list or price point, there are sellers ready, willing to deal on their properties -- give us a call to help you sift through what can be an overwhelming number of choices to help you make your best buy for instant equity in this rare buyers' market.
Buyers, you remain in the driver's seat!
Our August BUY-rated picks are all fabulous opportunities for savvy buyers, priced below market value in communities with established appreciation -- a savvy buy for instant equity. (These are not our listings; we've no vested interest in them, just find them great opportunities)
Our listings are all fabulous deals, too, The River Penthouse, an unbelievable riverfront penthouse that lives like a single family home with its 3,500 sq ft but offers the sweeping views and luxury of carefree, concierge living that only a penthouse could provide...
PS: Check out our full roster of BUY-rated picks. Many have sold or been reduced further!
Market fundamentals including population aging trends and in-migration continue to combine with Vero's relative affordabilty compared to other seaside communities and tough height and density regs to insure solid return on investment.
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Bottom Line: don't let bloated inventory levels and price corrections overshadow our strong market fundamentals -- it's a rare buyers' market, and truly a great time to get more for your dollar in Vero:
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After an initial price correction last year, average pricing in the County is UP from last year: prices are in fact appreciating, albiet not at the double digit levels we'd grown accustomed
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Sales levels remain HIGH ( '06 set to be 3rd highest year of sales on record), as mortgage rates remain historically LOW
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Florida will remain among those states with the highest in-migration thanks to generations of boomers turning 60 until 2015
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These factors will combine with Vero's relative affordability compared to other coastal communities to support investment in Vero Beach real estate.
A Northeastern transplant myself, I understand the questions and concerns that impact your decision making. Whether you plan to live in Vero and work elsewhere, live and work in Vero or enjoy your Vero property as a retirement or second home, it would be my privilege to send you additional information on Vero Beach, sample listings or to alert you when properties of interest hit the market.
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