Condominium units in the Vultures Database™ were down an average of -25 percent off of the historical high asking price through January 31, and single-family houses tumbled by a combined -26 percent for the same period, according to a new report from Condo Vultures® LLC.
At first glance the price drops appear significant when compared to the December average discounts of -22 percent for condominiums and -23 percent for houses.
A closer look, however, reveals the dramatic swing in discounts is the result of a methodological change in the way the data for the Vultures Database™ is compiled.
As of January, the Vultures Database™ is now comprised solely of South Florida properties east of Interstate-95 / U.S. 1 from South Miami north to West Palm Beach that have been reduced in asking price by 10 percent or $100,000. Previously, the database included properties that had been for sale for at least 100 days.
“As more coastal properties languish on the market for longer periods of time, buyers are finding it increasingly difficult to decide where to look and how to proceed given the quantity of would-be deals available in South Florida,” said Peter Zalewski, a principal with Condo Vultures®, a Bal Harbour-based real estate consultancy.
“This realization has prompted our organization to sharpen our research focus in hopes of better identifying the deep discounts that are to be had.”
The change in methodology has resulted in a -12 percent drop in the number of properties in the Vultures Database™. As of January 31, there were 4,317 properties in the database compared to 4,915 on December 31, 2007 for a net decrease of 598 units.
The total discount in asking price by South Florida sellers in the Vultures Database™ changed from $1.004 billion in December to $918 million in January.
The Vultures Database™ is currently tracking 2,927 condominium units and 1,390 single-family houses and townhouses. Condos have slipped by an average of -$169,160 and sat on the market for 553 days without selling. Houses have fallen by an average of -$299,716 and been for sale for 522 days.
Oakland Park in northern Broward County and Cutler Bay in south Miami-Dade County are experiencing the biggest price drops of any Florida market, with the average decrease being -32 percent.
The caveat is both markets together have a combined 17 units that are being tracked in the Vultures Database™.
Palm Beach (-31 percent), Pinecrest (-29 percent), and Palm Beach Gardens (-28 percent) round out the top five biggest drops by market. These three markets have a combined 16 units for sale.
Aventura, Bay Harbour Islands, Hallandale Beach, Miami, and North Miami are the first areas in the rankings where the quantity of units for sales combined with the deep discounts creates a critical mass.
All five markets are tied for the No. 6 rank of having the largest price drops based on an average decrease of -27 percent off of historical highs, according to the data.
Miami has 1,136 properties that have experienced an average drop of $182,305. Aventura has 170 properties with an average discount of -$164,477. Hallandale Beach has 316 properties that are down an average of -$138,385. North Miami has 84 units that are off an average of -$129,802, and Bay Harbor Islands has 10 properties off -$148,900, according to the data.
Not surprisingly, waterfront cities with sand are experiencing the smallest discounts.
Pricing in Fisher Island is off -15%, or -$757,000, for the nine area properties in the Vultures Database™, ranking it as the smallest discount of the 34 submarkets that are tracked.
Working up the rankings from the bottom based on average discounts are Bal Harbour (-21 percent), Indian Creek Village (-22 percent), Eastern Shores (-23 percent), Miami Beach (-23 percent), and Key Biscayne (-24 percent).
According to the data, a property in the Vultures Database™ won’t sell until the asking price has fallen by 32 percent off of the historical high.
In January, there were 70 properties in the Vultures Database™ that sold for an average discount of -$259,220. In 2007, the average price drop was 27 percent, or $258,089.
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. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.
Copyright © 2008, Condo Vultures® LLC
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