After two consecutive months of strengthening prices, the average asking price for a residence in the Vultures™ Database took an unexpected fall in value in October, according to a new report from Condo Vultures® LLC.
The average asking price for a home being tracked in the Vultures™ Database was down by 21 percent, or $185,510, through October 31, according to the Vultures™ Database Report for November. In August and September, the average price drop was 20 percent.
"Buyers and sellers are equally confused,” said Peter Zalewski, a principal with the Bal Harbour-based consultancy Condo Vultures® LLC and the broker/owner of sister company Condo Vultures® Realty LLC. “Buyers are witnessing big price drops yet are uneasy purchasing in a market where the bottom is still unknown. At the same time, sellers want to unload their properties but at no more of a discount than absolutely necessary. Both buyers and sellers are searching for signs of the market’s bottom.”
From a product perspective, condominium units in the Vultures™ Database are now down an average of 20 percent, or $145,184, and single-family homes and townhouses are off 22 percent, or $278,608, through October 31. In September, condo asking prices were down 19 percent, and home prices were off 21 percent.
No one knows when the moment of action occurs for a seller or a buyer in a market like this but the data offer some insight. According to the Vultures™ Database, buyers and sellers tend to make a deal once properties fall an average of 28 percent, or $253,132. Since January, 866 properties tracked in the Vultures™ Database have sold once pricing reached these thresholds.
Don’t be surprised if the thresholds change in the upcoming weeks and months as new product is being dumped on the market. In October, the Vultures™ Database grew by 20 percent to 4,460 residences, up from September when the inventory stood at 3,712 units.
Condominiums account for 70 percent, or 3,112, of the entries while the number of single-family houses and townhouses equals 1,348, or 30 percent of the total database.
The total price drop for all properties in the Vultures™ Database is more than $931 million. Properties in the Vultures™ Database have been on the market for an average of 457 days, up from 449 days through September.
One reason for the increase in inventory is that the submarkets tracked by the Vultures™ Database have changed, resulting in a net gain of one additional area. West Palm Beach and Palm Beach are now both being tracked while the Unincorporated Miami-Dade County submarket has been eliminated from coverage.
“The changes were made to better focus our resources and research,” Zalewski said. “The bulk of West Palm Beach’s new condo towers are scheduled to become available in the first quarter of 2008. We are taking steps to assist buyers who are in that market looking for data and deals.”
Condo Vultures® uses the Vultures™ Database to better identify areas and/or condominium towers where sellers are more likely to negotiate on price given price reductions or the amount of time on the market.
The Vultures™ Database is comprised of condominium units, townhouses, and single-family houses that have been cut in price by a minimum of 10 percent or $100,000, or have been for sale for at least 100 days. The database tracks properties east of Interstate 95 and/or U.S. 1 from Pinecrest north to West Palm Beach.
The combination of West Palm Beach and Palm Beach accounted for 56 new entries to the database. West Palm Beach has 44 properties that have fallen by 22 percent, or $106,334. Palm Beach has 12 properties that have fallen by an average of 26 percent, or $189,383.
Palm Beach’s average price drop ranks it as the fourth weakest market based on discount off the historically high asking price. West Palm Beach’s discount ties it for the No. 17 position with Indian Creek Village and North Miami.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com.
Copyright © 2007, Condo Vultures® LLC
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