Sales Meeting Recap

Wednesday at my office is sales meeting day. It's a chance for all of the agents to declare "I have a new listing on Sunset Key" or "I have a pre-qualified VA guy looking for a $250,000 condo" and we help each other out. Then our office manager or the president of our company gives us a recap of the last month, quarter, year, etc. compared to the same time periods of years previous. There are two important things I took away from today's sales meeting.

1) Months of Inventory (MOI) at Coldwell Banker Schmitt is less than MOI at every other real estate company in the Florida Keys. This is because we sell our properties in an average time of 9 months while the average of all sales in the Keys is 24 months. The principle reason this happens is our global and national marketing tools are so much better than the competition that we just turn it around that much faster.

2) The average sales price is continuing to decline (now down to aprox. $416,000/unit). This is most likely due to the tremendous backlog of short-sale and foreclosure sales. There has been an uptick in the $1Million+ market and an even larger one in the $500k-$1Mil. This is averaging out against a melee of distressed properties selling at or around $200,000.

But what we can't decipher from numbers, equations and interpolations is the feeling in the market place. Every week I get one or two phone calls from potential buyers curious about the <$200,000 range and guess what - it's gone! Unless you are going to pay in cash and don't mind a serious fixer-upper then you may have missed the boat. Example one - Salt Ponds Condominiums: filled with working class owners and renters, there are eight units under contract between $150,000 and $200,000. Then there are two units for sale at $235k and $250k. If you want a unit in the Salt Ponds Condominiums then you have to pay $235,000. This is tremendously different than just 12 months ago.

Perhaps a better example is Smurf Village on Eagle Ave, Harriet, etc. Everything that is for sale is under contract except one that has been on the market for four days and has ten offers on it already. I'm not a big fan of Smurf Village but it represents a great opportunity to own real estate with a yard in Key West for prices not available anywhere else. The market is hot and listings go under contract in a weeks time. The sellers (usually bank owned) will take a lower cash offer than a higher offer based on financing (which would include appraisals, inspections, etc.).

It'll be interesting to see when the bank owned properties will start holding out for higher prices in these market areas. It looks like we are on pace to really lower the MOI through out the Keys and Key West which would change the supply vs. demand equation. My guess would be that we still have a 18 months before supply gets to half what it was at it's peak. The demand however, I don't have the foggiest idea when that will truly return.