Here at www.condosaletrends.com, our only job is to take the data and present the trends so market participants can make informed investment decisions. So, no cheerleading, no anecdotal evidence. The data takes us to where the data takes us. We only track the sale of condo units within the 75 buildings along Thomas Drive and Front Beach Road (20,000 plus units) that are in our database. The analysis covers this particular segment of the market.
The number of real estate sales over a defined period does not by itself tell us if the bottom is near. However, the number of sales is a major factor in how supply and demand affects the market and merits analysis. Be warned, the following analysis is not for the faint of heart.
Our goal in this post is to look at the number of sales in order to gleam knowledge, based on empirical data, as to “what the hell is going on” around here. The “number of sales” or the “percentage of sales compared to listings” is not meaningful without comparing it to something.
The following table illustrates the number of arms-length condo sales from buildings in our database. The Palazzo auction sales are not included because they would skew the trend. What we really want know is how the auctions of unsold developer units may be affecting the larger condo resale market.
The August 2008 sales were down about 30% from the August 2007 sales and were trending downward from the 2008 May, June, and July numbers. The next table shows the number of sales from June 1, 2008 to September 15, 2008 compared to the same time frame in 2007. Because of the short time frame, the sales are broken into ½ month intervals. These are the reported numbers as of 3:30 pm 9/17/2008.
There were only nine reported sales for the first two weeks in September 2008. There were only three reported sales during the second week in September. Granted, there may be one or two additional sales within this time frame that are reported in the coming days. The data indicates that the trend in the number of sales is downward and steeply downward since late August. We will have a better idea of the sales trend in October after all of the September data is in.
The Palazzo auction resulted in 48 sales. As of 9/15/2008, public records indicated that 42 have closed. There are anecdotal reports that Palazzo has additional post auction contracts which have not closed. There are anecdotal reports that Sterling Breeze has 35 contracts based on some auction-type pricing, however none have closed. Ocean Reef with 162 total new units (only eleven units have closed since opening in March 2008) is holding an absolute auction for 31 units on October 18th.
It appears that the process of transferring 1,200 plus unsold developer units to private ownership is adversely affecting the number of sales within the larger resale condo market. In other words, those buyers who are financially able and willing to buy appear to be bypassing the Realtor/Seller relationship typical of most resale transactions and opting instead for the perceived discounts offered by the auctions or directly by the developers.
The data indicates that the number of sales of existing properties will continue to decline to levels we have never seen. Resales just can’t compete in terms of age and price with all of the unsold developer units.
Put on your spurs and hold on tight. This is going to be a wild ride.