Road Trip 2/12 to 2/19/2008
It's our last night in San Diego, after our first road trip for the year. I am out looking at real estate first-hand, and have been coast-, to-coast since December. In my travels I have specifically looked at the markets in Florida and California, looking at coastal towns in both trips.
Florida was a little more difficult, since it has, depending on your viewpoint, two or three coasts. That being said, and my view being that Florida has two coasts , I will base my assessment of the market thusly.
What I found at the end of the year in Florida was disturbing. This was not from the standpoint of the number of single family homes on the market. These seemed to be moving at a slow, but steady pace, across most price ranges. Days on market are increased, like most of the country, which for current conditions seemed pretty normal. So what exactly did I find so disturbing?
It was the number of condos on the market, and the large number of vacant projects that was so perplexing. There are so many condo towers going up, and no occupancy to be found. When I did a search through the papers, I saw a lot of property at seven figure price tags. Then, there were HOA fees that were several thousand dollars a month, topped by huge property tax rates, and high insurance premiums were the rule, because of hurricane, flood, mold, and termite coverage needs. And still the projects continue to grow into the Florida skylines. I kept wondering how many people were available to buy such properties. Then, I did some reading up on Dubai. Foreign investment targets are definitely in vogue for such projects.
California is starting to really show many of the same problems of the rest of the country. New business segments are springing up to help people get their homes turned gracefully over to the bank, so they can avoid foreclosure and bankruptcy, and get a new start. The California coast line is already largely built up. There are projects inland, and complicated real estate laws which make simple closings difficult. There are some single family homes closing in escrow, and I know the real estate attorneys have to be happy.
On both coasts things are precarious and not easing up. On the California side things are, as one local paper put it, becoming catastrophic.
Is it time to panic? No! In times like these that is the last thing to do. Rates are low, and there is a lot of property to be bought. The thing that has to be done is to look at the ways people will legitimately qualify for a purchase, and help them do so. On the sell side, it is important to make the property you are offering as desirable as possible. Be patient, and be active. There is always a buyer for any given property. The pool of available buyers has changed, so we all have to change to be able to close the deal. That means all of us: Sellers, Agents, Brokers, and Buyers.
All the best,