After showing a prospect some downtown St Petersburg condos this afternoon, we sat down to sort through what we'd seen. He asked me, "What's going to happen with prices? Are condos going down more than houses?"
Other than not having a crystal ball, I can say that in both condos and houses some are going to do well and some are not. The average price change isn't going to help you. Let's talk about which building (or which neighborhoods) are likely to show more price drops than others. Despite the newspaper statistics you read, there are still some building and some neighborhoods where prices are not declining, and where they're actually going up.
Then we started to discuss the downtown St Pete condo buildings, one by one. They say Real Estate is Local - and it really is. Dig deeper to separate the mini-markets.
Sharon - I focus on a very small market area, normally 50-60 homes sold per year, but in 2007 only 25 homes sold. Nonetheless, when you really dig down beneath the numbers, it becomes clear that there was a two-tiered market. Homes below $400,000 gained value and those above $400,000 lost value. The differences were quite dramatic. This is the first time that our market has shown a bifurcation of values.
Gail - good for you for being aware of the bifurcation. Now you'll have to educate everyone you deal with.
Lance - it's always good to have a knowledgeable colleague if it's an area you're not familiar with.
Eric - that points out that statistics are what you make them.
Randy - exactly the point!
So, so true, but it seems the buyers are so nervous with the economy, they listen to all of your guidance, and still feel they should take another 5% off, to prepare for future. I prepare the buyer cma, and it is much easier to do when similar units have sold, but you need to try and get the prices of the units that are in contract, you just have to be so current. I know I am going off a little, but it is just when you get what the price is, will appraise for, is fair for both parties, that still both feel they are being cheated.
Joanne - yes, and some buyers decide not to buy because their "other advisors" are telling them that prices are going to drop much farther. We can only guide according to our experience.
When we say it is local, it is often not about the market in general. In one condo the developer is still selling a few units and they go for under $300K, however all resales in t he same building for for $500K+. The minute the developer walks out of the building, those under $300K are gone. The next budilding has all unit that are resale. These o a mini scale woudl be a totally different market