May 2013 -- The first two months of 2013 show condo sales trailing 2012 by 14%. Condo prices are on the rise. The average price of condos sold rose 4% in 2012 and are projected to rise 7% in 2013. While the absolute bottom of the market has passed it remains near the bottom and there are still bargains to be found. Record low prices and interest rates remain a huge inticement for condo buyers.
Condo Sales. The chart to the right illustrates the number of condo sales in January through February compared to the previous 9 years. The comparitive number of sales highlight the growing condo market . Although this years's condo market is slightly down from 2012, it remains one the second highest in 7 years.
Why the 14% dip in condo sales this year? Lack of inventory, and fewer short sales and foreclosures seem to be at the root of slower sales this year. Also, banks continue to require 25%-30% down payment on condos used as rentals and second homes. More difficulty in obtaining loans dampens the number of sales and cools the market for both buyers and sellers. Lenders are applying these safeguards to help prevent a repeat of the 2005 bubble. Lenders hope is this action will sustain a more healthy growth.
Condo Inventory. Condo inventory has fallen steadily since July 2006 when it hit its high of 5,047 condos for sale. The lowest number of condos for sale this decade occurred in February 2004 when condo inventory fell to 1,175 units. Current inventory is only slightly above that record low. However, the last two months has seen an increase in inventory. This recent trend is noticable as it is the only upward mometum in inventory in the past two years.
Effect of Inventory on the Condo Market. With fewer inventory, sellers often have multiple buyers seeking the same prices and are not motivated to offer the deeper discounts seen in previous years. Less negotiated discount exerts upward pressure on prices..
Will prices continue to rise slowly? Continued low interest rates and falling inventory have initiated a slow recovery of prices and will sustain it in the foreseeable future. Improvement of other global economic pressures which continue to exert downward pressure on condo prices should slowly improve. Low Interest rates are critical to continued condo market growth. National economic forecasts say they are expected to remain at record lows for at least the next 2 years.
Expect your offer to be one of several being considered. It surprise many to hear that there are usually just a dozen or so foreclosed condos along 40 mile stretch of beach between Fort Walton and Panama City Beach at any one time. Only about 3-4 are located within a gulf front complex The number of foreclosures have been falling since last year and continue to shrink in number.
Expect the property to sell at-or-above list price. With so few foreclosed condos and an ever shrinking inventory, buyer pressure is high and multiple offers are typical. The result is that about half of all foreclosures sell at or above the actual list price.
Watch for value, ignore hype. Many potential buyers loose their value perspective in the 'auction atmosphere' surrounding the sale of distressed property. Competitive drive to win can tempt buyers to push offers above value. While there are good deals to be had, expect surprises as you push through the foreclosure process. Watch for value, and ignore the hype.
Expect an Unusual Experience. Another emerging problem with bank owned property means is that you may be under contract to purchase a property, but the property will be transferred (usually in bulk) to the ownership of another bank or entity before you close. When this happens - you loose. The property does not close and you loose your time, effort, and cost of inspections, surveys, and sometimes other costs.
Please let us know if I may assist you in obtaining detailed information for properties located in any of the following cities or regions below.
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