The current market is in a state of flux as prices are still moving upwards in the Vero Beach-Sebastian area, just not at the rate we saw in 2012 and 2013. Inventory is creeping up as well, yet sellers seem overly optimistic and if truth be told, some agents either don't do their homework or just take the listing at any price! Builders are increasing there level of inventory and pricing has increased as well. Take advantage of the builder prices now before they move any higher! The barrier island is still strong, especially on the higher price range. Priced right, the barrier island inventory doesn't last long. Land prices have also moved up and some larger parcels might show up on the market now as most were bought at 25 cents on the dollar in 2009 and 2010, so some of the investors might want to cash in. Last, for those investors waiting on the banks to let loose of foreclosed inventory, be careful as they are slowly letting some on the market,but at retail prices!
Current trends are showing inventory still dropping 23-28% from last year which was down almost 50% form the previous year! This is leading to increasing prices as well. This is exemplified by increasing sales price per square feet for Mainland properties up to $100 per sq ft and Barrier Island non waterfront up to $228 per sq ft. Mainland properties have an average of only 3.5 months supply and an average of 115 days on the market. Barrier Island non-waterfront has a 10 month supply of inventory with an average of 140 days on the market. Last, Barrier island waterfront has a 17 month supply of inventory with a 250 day on average days on the market. As such, overall market strength is continuing with inventory still very low and diminishing with prices steadily increasing.
Builders in the Vero Beach, Sebastian FL area are starting to get it! They are supplying inventory and can't build them fast enough as buyers snap up the homes during construction or as a presale. I have a CSP, Certified New Homes Sales designation from the National Home Builders Association and use it to educate my buyers why one builder may more suitable to them than another or why one is more expensive than another. We have a few regional and national builders in our area, but predominantly more small custom builders, so different levels of customization and pricing. Who is building where and what price range is becoming very important with the lack of resale inventory in our area. If your agent doesn't know who the players are and where they are building, it will be tough to find the product as most builders are not spending huge marketing dollars right now.
Builders, where are they? In the Vero Beach and Sebastian area right now there is a limited supply of builders and thus, inventory. Existing home inventory is down 35-50% depending on your source, so new product is starting the take up the slack and could do so more. As of now, mainland builders are DR Horton, GHO and Maronda with Paradise Builders entering the area. My small local builders are having a hard time gearing back up unless they have the cash reserves to build specs all cash, which means very few. Lines of credit from lenders are very hard to come by, so maybe private partnership lending? Just a thought. End users, based on the interest in lot purchases are increasing, have construction perm financing with a few local lenders, but the small builders are missing the boat right now having existing inventory.
More news about the strengthening new home sales. Read this new article about builder confidence http://rismedia.com/2013-06-17/builder-confidence-hits-7-year-high-new-home-sales-rising/. Locally, I have several builders, developers and investors trying to tie up land and lots before prices increase too much. Last year you could buy finished lots at the $10,000 range, now 20's and 30's depending on location. Little exisitng inventory will further increase demand for new product and builders are supplying spec homes, as long as they last!
The days of sweetheart deals for foreclosures and short sales seem to be over. Lenders are placing the foreclosure on the market at retail prices. When I have a conversation with a buyer and tell them they can buy the foreclosure with no warranty, no repairs and the lender may not even turn the power or water on, it is a very short conversation. Buying a home where the seller has maintained the home, will fix repairs required by the inspection and has power and water on, it becomes an even shorter conversation. Short sales where the buyer must wait until....? for an answer from the lender at the price they will agree to sell it at, which is now retail pricing. Buyers are starting to understand that we are getting back to normal. Last, you can't blame the lenders, they have been taking the hit for several years now and have stockholders and investors to answer to.
Reading all the articles on the lack of inventory? Our local market listings are down almost 50% leading to buyer unhappiness about selections available and price increases. Now, I am seeing more and more builders and developers inquiring about land and lots availablity. New home product inventory is very scarce too as the specs being built are being snapped up by buyers and small local builders are having a hard time securing financing from the lenders for builder lines of credit. The regional and national builders are able to have funding to build the spec homes and are selling at a brisk pace with ever increasing prices. Therefore, buyers are still limited in selection for new homes, but their prices are not much higher than resales now and buyers will pay a premium for new with warranties. Sounds like 2002 all over again!
Just received a great email from Trulia regarding For sale by owners and the pitfalls. Have to pass on as I just had a seller who wanted to wait to put home on the market as a family member was interested. I explained to the seller that the family member was going to have to be approved by a lender and needed 20% downpayment plus closing costs. Family member did not realize this and declined to purchase. Luckily, we did not have to keep off the market while family member researched this. Another example of a real estate professional and helping your client. Enjoy the Trulia article regarding "Hazards of For Sale by Owners". http://pro.truliablog.com/sellers/top-hazards-of-fsbo-during-the-market-recovery/?ecampaign=anews&eurl=pro.truliablog.com%2Fsellers%2Ftop-hazards-of-fsbo-during-the-market-recovery
#4 Lesson learned for agents, buyers and sellers. Agents,never let your clients forget, referrals are always appreciated! Agents, referrals should make up at least 1/3 of your business! Clients, please let everyone know how good a job your agent did for you.
Clients, everywhere we look throughout the country, we hear about the lack of inventory and increasing prices. Another article in RISMedia Daily e-News [email@example.com] comments on the lack of inventory in New York and Miami. Also noting the bidding wars going on for buyers who end up losing out on multiple offers. In our local "little cities by the sea", Vero Beach, Sebastian and Indian River Shores, we are encountering similar situations. IF... they are reasonably priced listings in desireable areas. Now, in our area inventory is down 40-50% from last year and increasing prices and buyers are complaining too. The quote in RISMedia "now is the perfect time to sell before more sellers get into the market" is becoming much more true. Sellers need to be realistic, we are definitely not at 2004-2005 levels, but closer to 2001-2002 numbers in my opinion. Sellers and buyers, pay heed. Agents of course want to sell, but these are not just agents making up the numbers to make a commission.