A maintenance reserve: What an idea!

In the midst of our country's major financial crisis and with daily news casts about both public and private credit debt, it is refreshing to see a condominium community that has wisely put money aside since its inception. So while other complexes defer projects due to a lack of funds, FalmouthPort in Falmouth, MA just goes on about its business.

Falmouthport is a waterfront condo community on Cape Cod. Since it was built in the late 1970's, the Association Board with its professional management company, have managed the property in a highly professional manner.

Three points need to be highlighted:

1. The Board knew from day one that even though the complex was new, the day would come when repairs would be needed.

2. A Long-range Repair and Replacement plan was adopted and money was set aside.

3. The funds were invested conservatively. When stocks were rising wildly, the fund did not grow as fast as some would have liked. When the market tanked, however, the fund was barely touched.

What spurred this entry? Today the main road was repaved. No, there was not just a top coat applied; the old road was removed and a new one put in its place. And most important: there was no special assessment.

Now that summer is winding down, it's time to do all those things that you wanted to do but somehow didn't get to. Although many of the summer activities will soon give way to special fall events, there is still time to take advantage of some summer activites.

Click here for information on Lobster on the Lawn Mondays in Falmouth, MA. There's still time.

                                                      Dec. 31, 2008     May 15, 2009     July 31, 2009

• Units on the market                          56                         76                      68
• Average sales per month                  4.5                         3                        4
• Our absorption rate*                12.4 Months           25.3 Months    17 Months

*Absorption Rate: The number of months that it would take for all condos presently on the market to be sold. A balanced market is around 5 months.

• Sales % of original list price                   85.3%            85.2%                  89.5%
• Sales % of list price (at time of sale)      92.7%            94.57%                94.1%

Here are some statistics by price range: 

                               0-299,000        300,000-399,000       400,000-499,000      500,000+                        

Listings                    14                              19                              18                       13

Sold (6 mo)               9                                 6                                4                         5

Pending                     5                                 2                                1                         1

Average Days on Market (sold)

                                   188                            257                            92                      267

Positives:  

•1.      The fact that the number of condos listed for sale is down 11% is a good sign.

•2.      The absorption rate is also down.

Negatives:

•1.      The average sales price is down 10% from the same period a year ago (2008: $407,812;  2009: $367,576).   

•2.      In the past six months, 53 condos have come on the market while just 22 have been sold. 

Conclusion: The continued downward pressure on sales prices means that the buyers' market continues.

Tomorrow I will post the statistics for the three upper Cape Cod towns combined: Falmouth, Mashpee and Bourne.

The downward pressure on the sales prices of Cape Condos continues as the challenges of getting financing continue.

The very same condo that I mentioned in May had a new buyer and a new lender and fell apart again at the last minute. This time it was about the buyer's income. Needless to say, the bank (in this case Citizens Bank) had preapproved the buyer, received all the information requested in a timely manner, and gave no indication of a problem until the day of the final commitment when they issued a "declination letter."

Another condo in a very well managed, well funded complex that has never had a special assessment, is under agreement with a strong buyer. The buyer is putting 20% down. Yesterday, the date of the final commitment, the lender (Provident) could not meet the original commitment date because their underwriters are backed up. The commitment is now due next week. Stay tuned.

Needless to say, this continues the downward pressure on condo prices because buyers are reluctant to get involved.

On the bright side, however, I do have a closing today on a very nice condo. Bank of America is providing the financing for this one.

We recently had the sale of a condo at Sea Oaks in Mashpee, MA fall apart over the condo associations refusal to answer four questions that required an opinion or judgement.

The mortgage provider had sent a form to the association's management company, American Properties Team of Woburn, MA. American Properties provided a comprehensive form that failed to answer four questions. Neither the lender or APT would budge.

There are several questions that I am attempting to get answered:

1. Can a condo be purchased with an FHA backed loan at a property managed  by APT or any association whose attorneys refuse to allow them to answer questions requiring an opinion? (i.e. is the maintenance reserve adequate?)

2. Do all lenders use the same form?

3. Which lenders will accept the pre-prepared form provided by the association?

I will keep you updated.

An Overview of the 2009 Falmouth Condo Market (Through May 15)

                                                                  December 31, 2008        May 15, 2009

• Units on the market                              56                                   76
• Average sales per month                       4.5                                  3
• Our absorption rate*                             12.4 Months                     25.3 Months

*Absorption Rate: The number of months that it would take for all condos presently on the market to be sold. A balanced market is around 5 months.

• Sales % of original list price                   85.3%                              85.2%
• Sales % of list price (at time of sale)      92.7%                              94.57%
• Median Sales Price                              $339,950*                       $278,750*

*The median sales price for the first 4.5 months of 2009 is down 18%

Here are some statistics by price range: 

                               0-299,000        300,000-399,000       400,000-499,000      500,000+                        

Listings                    18                              22                              21                       13

Sold (6 mo)              10                              3                                1                         4

Pending                    0                                2                                2                         2

Average Days on Market (sold)

                              246                            195                            13                       470

Conclusion: Since there have been more condos coming on the market than have been sold, there is still downward pressure on prices and the inventory remains high. Buyers are clearly in control and will stay in control until there are three consecutive months with more residences being sold than come on the market.

The key to selling in this market is to price the property correctly.   

This one bedroom, free standing condo had been on the market for nearly a year. The sellers decided to enter into a short-term lease with a couple who was renovating their home as long as they could continue to market the property. The tenants moved in and tastefully decorated their temporary home. The next buyers who came in bought it!

Instant Convert

I became an instant convert. The current market certainly requires that homes be priced properly and effectively marketed, but staging seems to have a larger role than ever before. Statistics show that staging a home can increase the selling price by up to 7%, but there are still skeptics everywhere.

HGTV states on its website that "in a cold market, a properly-staged home can sell in half the time." It now offers several series that focus on staging and it will have a separate staging special, "Staging Secrets and Myths," on Sunday, April 12 at 8:00 PM.

Clutter, Clutter Everywhere

Occupied homes present a unique challenge. It is the opposite of home decorating. A home decorator helps home owners to personalize the home to their own tastes and needs. A home stager, on the other hand, depersonalizes the home so that buyers can more easily visualize themselves in the space.

 Since this can be threatening to sellers, and therefore dangerous to the welfare of the real estate agent, I have made special pricing arrangements with talented stagers to provide 1.5 hours with my sellers to provide them with a "to do" list. I provide this at my expense and use it as an incentive to secure listings.

For the most part, it's simply a case of "packing now" rather than waiting until the house is under agreement. In other cases, it requires some serious sprucing up. In either case, the result has been very encouraging.

Painting on a Blank Canvas

Vacant homes and condos offer a unique opportunity. Local furniture stores will, for a fee, stage a home as long as it is not occupied. I recently listed an updated, adorable 2 bedroom 1056 square foot ranch condominium that was vacant. The first two open houses and several showings resulted in two primary comments: 1. I'm not sure my furniture will fit in here; 2. Since it was built in the late 70's, it's too old for me.

Bring on the Stagers!

I called a stager and told her that I wanted to give buyers an idea of the real size of the rooms and to make the home feel more current. The owners agreed to a two month staging agreement and the furniture was delivered.

The results have been amazing. The most enjoyable aspect for me has been seeing the look on the people's faces as they entered the condo. Of course, an offer will be even more enjoyable.

You can view the staged condo and take a virtual tour at www.273seawardbend.com.

We had another winter storm today, and although we did not get the foot of snow that some off-Cape communities received, we got a mix of ice and snow that made the roads quite treacherous. The good thing about a day like today is that it creates some unplanned "free time" to get some nagging projects done.

So what project did I get done: I prepared my 2009 Boston Red Sox schedules for mailing. Even with a winter wonderland outside, the home opener is just 34 days, 17 hours, and 35 minutes away (as of this writing). There is hope!

You're probably asking yourself, "why in the world would comedian Ray Romano would ever consider buying a luxury condo in Cape Cod?" First of all, Mr. Romano is no stranger to Cape Cod. As a matter of fact, Mr. Romano was the Celebrity Guest Conductor for the 22nd Annual TD Banknorth Pops by the Sea concert back in 2005. Need more reasons why you might see the "Everybody Loves Raymond" guy purchase a Cape Cod condo? Take a look at...(read the rest of this entry)

I love Cape Cod and I love golf. In most years, "winter golfers" who have all the cold weather gear can get out once or twice during January and February. Not this year! Between snow and cold, my clubs have been stored away.

Today it's going to be sunny, 37 degrees, with no wind. To those of you in warmer climates that may seem unbearable, but to those of us with pent up golf demand, it's worth a shot. Falmouth Country Club here we come!

Isn't it amazing what you can do when you have to? It's kind of like real estate...