The typical condominium in the Vultures Database™ is down an average of -26 percent, or $172,601, through February 29 compared to an average drop of -25 percent, or $169,160, on January 31, according to the Condo Vultures® report .
North Bay Village experienced the deepest individual market drop as discounts plummeted from -25 percent in January to -30 percent in February. Exclusive Fisher Island experienced the second deepest monthly drop in pricing as discounts jumped from -15 percent in January to -18 percent in February, according to the data.
Six markets experienced a -2 percentage point drop in month-over-month pricing. Palm Beach dropped to a -32 percent discount; Miami Shores to a -30 percent discount; North Miami Beach and Hollywood to a -28 percent discount; Fort Lauderdale to a -27 percent discount; and Coconut Grove to a -26 percent discount.
“While the average discount has deepened, the latest numbers also show that eight of the 28 submarkets tracked in the Vultures Database™ experienced no pricing change and/or even a strengthening in pricing in February,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “We are nowhere near being able to call the bottom but obviously a leveling off in discounts in nearly one-third of the South Florida submarkets in the Vultures Database™ is something that needs to be monitored.”
The markets that experienced a leveling off in discounts in February are Aventura at -28 percent, Key Biscayne at -24 percent, Pompano Beach at -25 percent, Wilton Manors at -29 percent, and West Palm Beach at -25 percent.
Miami Gardens strengthened from a -27 percent discount in January to a -25 percent discount in February.
During that same period, the average discount in Bay Harbour Islands strengthened from -27 percent in January to -26 percent discount in February, and discounts in Dania Beach decreased from an average of -25 percent on January 31 to -24 percent on February 29.
As the overall discounts have deepened, the number of distressed condos available in South Florida has increased slightly.
The Vultures Database™ is now comprised of 3,015 South Florida condominium units east of I-95 from Palmetto Bay to West Palm Beach that have been reduced in asking price by at least 10 percent or $100,000 from the historical high amount.
In January, there were 2,927 condominium units in the Vultures Database™. The month-over-month change in February represents less than a minimal percentage increase, according to the report.
“Don’t be surprised to see the Vultures Database™ inventory grow this summer when the bulk of the new product in downtown Miami and downtown West Palm Beach comes online,” Zalewski said. “Speculators who opt to close – if they can get financing – are likely to immediately put their units on the market for sale hoping to sell off to one of the numerous all-cash discount buyers looking for value.”
Sales of properties in the Vultures Database™ are off the pace of 2007. In the first two months of 2008, 154 properties in the Vultures Database™ have sold, resulting in an average of 77 transactions per month. By comparison, there were 1,181 properties in the Vultures Database™ that closed in 2007, resulting in an average of 98 transactions per month, according to the data.
Fewer properties are closing this year but the average discounts are deeper. The average price drop necessary for a property in the Vultures Database™ to close is -36 percent, or -$302,737, in 2008. In 2007, the average price drop was -29 percent, or -$257,102.
There have been 22 properties in the Vultures Database™ that have closed at a price that is discounted by at least -50 percent off of the historical high asking price. One unit in Miami Beach closed at a -75 percent discount for a purchase price of $65,000, and another property in Miami sold at a -72 percent discount for a sales price of $50,000, according to the data.
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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