August 2017 Market Conditions - Expert Analysis

 
 

Headlines:  

Housing Inventory Still Near All-time Low
      
Homes Still Cheaper Than 2006
The next-generation bomber built in Melbourne and next generation rocket facilities being built in Merritt Island are having a major boosting effect on Brevard's economy. For-Sale Inventory still hovers near all-time lows, frustrating buyers and raising prices. Single-Family prices are breaking out above the trendline. Single Family prices are 187% above the bottom; condos are 139% above the bottom.

Anticipating soaring inflation, money is rushing to real estate. Blessed by good weather, Florida has grown more than New York, and grew the best economy behind Texas. Spurred by yet more government intervention, interest rates on 30-year fixed-rate mortgages still provide an unprecedented buying opportunity. Will higher mortgage rates make ownership more, or less, affordable than today? Rises in interest rates will drive up your monthly payments!. Home ownership will get very costly as mortgages rise from today's artificially low interest rates, then add price increases detailed later in this report..
Hire a Realtor with market perspective to guide your investment. Richard Webb at Coldwell Banker Paradise, has bought and sold Brevard properties since 1997. Call me. you can benefit from that experience.
Lock in that 30-year fixed rate mortgage NOW! Look at the graph on right. Interest rates jumped 34% between April and September 2013 and could easily do it again.  Real inflation is climbing as irresponsible government spending invades the rest of the economy. But you can harness the destructive power of inflation as it eats away the principal of your mortgage. Today, the difference between your interest rate and the REAL inflation rate (about 6%) is a risk-free and tax-free return on investment never before seen in the history of the world! (I checked)

The next major crisis in real estate could be interest rates skyrocketing beyond the 20% of the late 1970s. You may not see interest rates this low again in your lifetime. Lock in your price and mortgage NOW while fixed-rate mortgages are still available!

We insiders know living on the SpaceCoast is warm and relaxing! Now everyone else is discovering the secret of favorable real estate prices in Central Florida. This comprehensive monthly report shows you the investment potential that accompanies owning property in Brevard County.

Brevard condo prices tend to forecast single-family prices as shown in the following graphs. Buyers are having difficulty finding the home/condo they want, and pent-up demand increases as buyers wait for the right abode to come on the market. Well-priced homes get snapped up quickly, with multiple offers. Prices are rising in response to lack of inventory. Bidding wars are common. Strong sales kept inventory at low levels, accelerating the price rise that started April 2010. Cash buyers (which indicate a strong investor presence) now account for 40% of all Brevard sales, down from 50% in early 2012. That is a positive trend as owner-occupants rejoin the investors.

When in a Buyers Market - BUY. The real beneficiaries have been the smart buyers, buying while prices and mortgage rates were even lower and everyone else was afraid to buy.

Investors Low interest rates, and a population moving to rentals, made landlording feasible again. Brevard demand is driven by a high-tech jobs base PLUS vacation/retirement homes for baby boomers. Our embedded base of working renters makes Brevard a much better investment than retiree-dominated communities.

Leading Housing Indicator  Inventory is the most important indicator to watch!

August beginning-of-month MLS inventory
      2075 Single-Family down to just 26% of the high inventory in 2007!
        536 Condos          
down to just 19% of the high inventory in 2007!

Months of Inventory, or absorption rate, shows how many months of sales it would take, at the current rate, to deplete the inventory. This is the best indicator of where the future market is headed. Demand has been so high that sales are postponed by lack of inventory. Buyers are waiting to find what they like, with multiple offers the first week on market.


Inventory now stands at  a low 2.4 months of Single Family, 3.4 months of Condos

Building Permits Graph and Statistics (Housing Starts) Click this title for our proprietary charts showing still-slow building activity. Some builders seized an opportunity to get their crews working and permits increased from a record low 35 per month in November 2010, to a 5-year high of 141 in July 2013. We now average 50. Click blue paragraph title to see recent trends.

Nicely crafted makeovers raised prices in some resale segments (especially waterfront).

What is this home worth? These graphs and charts reveal what's happened lately. If you'd like to know why, see my Real Estate eMagazine and call me for a discussion of solid economic fundamentals powering the move to the SpaceCoast, and various neighborhood lifestyles drawing people here.

 

 
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Deal with a knowledgeable Realtor who uses lots of great information to benefit you.
Call Richard Webb at 321-480-5514 for buying/selling, essential market expertise, recent updates to these numbers, and projections of future trends.

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The Best Information - Gives You a Winning Edge.  I built these graphs to give us some perspective on market forces setting the prices on homes, and to help our clients negotiate the best possible deal. Call me. You  need a negotiator that digs out the best information and knows how to use it. These Brevard county-wide residential sales, by fellow members of both Boards of Realtors, chart the leading edge of Brevard's overall real estate market.
Note: The following numbers still include some distressed sales that push the graph lower. Homes on navigable waterways sell higher than these averages.

CAUTION: Low-quality distressed properties (mostly bank foreclosures) still  push average sales prices down. Do NOT infer that your home value has decreased this much! Prices have been rising. Call or eMail the "Webbmaster" for details.

Record-setting Year over Year Sales

Soaring sales, tight inventory, higher prices.

Source Data: MLS. 
Graphs updated mid-monthly
when data matures - approx 12th.

Sales Still Booming

The most cautious investment advisors with a track record of correct predictions in 2008 are advising transition into hard assets -- commodities and real estate. Real estate (which you control and enjoy) sure beats gambling in the stock market - and you can't enjoy a stock certificate! 


We sell details and additional insight to financial institutions. Contact Richard Webb

Remember: settlements show on these charts 30 to 90 days from the time the deal was struck. See Buyer Activity Graph
What is the average sale? Nominally, homes are the same price as 10 years ago. But after REAL inflation (not the manipulated one in the news) they are MUCH cheaper and rising at a sustainable rate this time.. Prices (still a bargain) rank far below other desirable markets and below the national Median Prices,.

When Should I Buy/Sell? Single Family prices already rebounded 200% from the low. Don't miss the rest of this buying opportunity! Buyers get serious from early January till just before school starts in late August. Timing can affect the price.

Pick Your Home Averages are good for perspective, but can blur the picture. Focus on categories of homes you're interested in, then call me for help finding the specific one that fits your requirements.

Waterfront homes offer the best appreciation potential. Unlike continually expanding developments in former orange groves, they're not making any more navigable waterfront.  Including all the islands, we have 230 miles of coastline, and that's it, so prices get bid up faster on waterfront homes. In most areas we're seeing neighborhoods upgrade as investor-refurbishers buy homes built in the early days of the space program, and modernize them. Renovations push values much higher.

Near-retirees establishing a beachhead for retirement, or beginning to move to Florida, want high-end homes and condos. They appreciate faster than blue-collar homes as a result.

Note: Some people mistakenly try to use the Tax Appraiser's values as a guide to home pricing. That will not work in Brevard. Neither the appraiser's Market Value nor Assessed Value offers a predictable relationship to sales prices as evidenced by my Appraiser Ratios analysis (click to see).

Is Demand for Real Estate Topped Out? See the price graphs above. Retirees are still moving to Florida, now the2nd most populous state ahead of New York. The baby boom started in 1946 -- add 65 years and baby boomers (who for decades have dreamed of moving to Florida) began to retire en masse in 2011. Many home shoppers plan ahead (a characteristic that made them successful in the first place) and purchase early.. Average condo sales prices bottomed out in September 2010, single-family sales prices bottomed out in March 2011.

Brevard Investment Outlook Grumman won the largest bomber contract in a decade adding 1,500 jobs in Melbourne to build them. 

We still launch rockets. Private manned launch preparations also keep us busy, but with 1/10 the labor force, making us more internationally competitive.  Jeff Bezos Blue Origin is building a 500k sqFt rocket assembly facility. The company is investing more than $200 million in local infrastructure and plans to employ more than 300 people. The shuttle layoffs prompted diversification into other hi-tech ventures that helped recovery. Younger workers are returning. Older ones plan to retire here; long-timers stayed because their house is mortgage-free and job prospects were better than elsewhere.

Harris Corporation built a $100 Million Hi-Tech Engineering Center. Bertram Yachts moved from Miami to Merritt Island.

Another exciting $100 million cruise terminal completed in December 2014. Royal Caribbean's Freedom of the Seas (world's largest cruise ship) now calls Canaveral home. We previously built a $22million terminal for 2 new Disney super-cruisers. Two new container cranes and a new 250,000sqFt warehouses on US1 adjacent to TICO airport are in operation.

A new natural-gas power plant rose in Port St John. Companies in Melbourne are desperately looking for engineers. We replaced NASA jobs with private-sector leadership in hi-tech industries.

Troubled Sales Abated Condo Prices (see graph above) have increased significantly since September 2010. Last winter, sales over $500k were 5% of the market compared to 11% of the market 6 months prior, while sales of units under 1,000 sqFt remained constant. Troubled sales (short or lender-owned) have reduced to only 20% of Total Sales.
Period Standard Sales Total Sales Ratio

Sept 2013

362

657

55

Sept 2014

492

783

62

Sept 2015

681

844

80

Contrary to what you read in the press, we studied premium waterfront home sales and discovered that on Indian River, Banana River and Newfound Harbor, prices have yet to rise significantly, but volume is too low for much confidence in price comparisons.
Oceanfront is excluded here because prices overpower the data and skew the analysis.
Year Average Waterfront
Sale Price
Number of Sales Over $1 Million
2005 817,000 69 41
2006 895,000 32 27
2007 1,004,000 65 28
2008 839,000 63 16
2009 699,000 84 16
2010 678,000 101 16
2013 652,254 113 13
2014 679,000 109 19
2016 660,388 121 16

Perspective  Government bail-outs induced irresponsible lenders to give undeserved mortgages to irresponsible buyers who could not, or would not, honor their commitments. It will take awhile until the last foreclosures are out of the market, but banks are no longer dumping inventory in high volume. Panicked sellers who pushed the market down hard are gone. Now we are seeing a renewed upward trend as retirees continue to move here. Take advantage while you can.

Our studies show homes are still selling at 95% of asking price. When the asking price is set realistically, a large number of homes have sold at full asking price or above. Multiple offers on one home are common.

New Economics Did you notice that the largest credit card issuers doubled their minimum monthly payment a few years ago?  That's one great way to curb irrational exuberance -- a brilliant new monetary strategy. But the sudden doubling triggered the mortgage crisis! Construction workers with mortgages based on tenuous overtime wages could no longer pay their credit cards and that triggered defaults on their no-down mortgage. The doubling drastically cut consumer mis-spending, and was done with quiet government approval; otherwise banks would have been in illegal collusion. This was a revolutionary method of reducing borrowing in precisely the sector that defaults on debt due to their irrational exuberance. It was more effective than the Fed increasing reserve requirements to curb lending. We watched its positive effect on lowering inflation and interest rates, while the uninformed press whined about negative effect on credit card borrowers and how consumers were not spending enough. Meanwhile, jobs, wages and productivity (the only worthwhile measures of an economy) got devastated in the ensuing crash.

Investors Call Richard Webb, a fellow investor, for expert help selecting properties with the highest total return in your portfolio. Sometimes half of my buyers and sellers hold real estate licenses in Florida or other states. I am a Realtor's Realtor backed by an office of 250 specially selected expert staff and agents in 8 offices of the Coldwell Banker Paradise / Ed Schlitt Realtors team, the most respected professionals on the Space and Treasure coast. We're everywhere you want to be along the Indian River.

This article morphs slowly over time, but the statistics are updated approximately the 12th of each month.

.Coldwell Banker Ed Schlitt RealtorsBrevard Coldwell Banker Real EstateCocoa Beach area Realtor

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URL: http://4Brevard.com/brevard-trends.shtml  Last Modified   
Linking and quoting (with attribution to 4Brevard.com) is encouraged; copying and reprinting this data for commercial use prohibited.

Res= residential   Att=attached condos/townhomes.  Number is units sold by MAAR members.
Note: Sales may be skewed toward south and central Brevard, and new construction

Perspective: WATERFRONT Home & Condo Sales (MAAR)

Realtor's MLS system no longer produces these numbers                          Res = Single Family Residential   Att =Attached Condos/Townhomes.    Number is units sold.

2005 Prices thru Dec 31

2004 Prices 2003 Prices 2002 Prices
Indian River Res - 107 Att - 163
Avg. Sales Price $848,767 $439,889
Sales Price per/sq.ft. $337 $219

Banana River Res - 76 Att - 154
Avg. Sales Price $804,566 $354,495
Sales Price per/sq.ft. $311 $225

Sykes Creek Res - 48 Att - 7
Avg. Sales Price $510,414 $292,685
Sales Price per/sq.ft. $245 $173

Lakefront Res - 927 Att - 189
Avg. Sales Price $360,490 $228,977
Sales Price per/sq.ft. $168 $162

Ocean Front Res - 25 Att - 439
Avg. Sales Price $1,238,768 $482,233
Sales Price per/sq.ft. $476 $300

Newfound Harbor Res - 7 Att - 0
Avg. Sales Price $522,142 $0
Sales Price per/sq.ft. $231 $0

Canal - Navigable Res - 246 Att - 36
Avg. Sales Price $564,860 $332,790
Sales Price per/sq.ft. $265 $236

Canal - Drainage Res - 224 Att - 43
Avg. Sales Price $233,510 $152,152
Sales Price per/sq.ft. $137 $144

Other Res - 128 Att - 98
Avg. Sales Price $347,342 $254,200
Sales Price per/sq.ft. $188 $186
Indian River Res - 122 Att - 165
Avg. Sales Price $823,143 $337,290
Sales Price per/sq.ft. $278 $181

Banana River Res - 80 Att - 155
Avg. Sales Price $743,230 $265,438
Sales Price per/sq.ft. $246 $180

Sykes Creek Res - 60 Att - 7
Avg. Sales Price $386,377 $238,750
Sales Price per/sq.ft. $203 $179

Lakefront Res - 905 Att - 158
Avg. Sales Price $286,032 $181,525
Sales Price per/sq.ft. $132 $130

Ocean Front Res - 34 Att - 558
Avg. Sales Price $1,194,367 $382,848
Sales Price per/sq.ft. $411 $243

Newfound Harbor Res - 12 Att - 3
Avg. Sales Price $570,758 $257,333
Sales Price per/sq.ft. $233 $152

Canal - Navigable Res - 273 Att - 46
Avg. Sales Price $453,105 $234,013
Sales Price per/sq.ft. $212 $163

Canal - Drainage Res - 199 Att - 5
Avg. Sales Price $165,491 $150,660
Sales Price per/sq.ft. $101 $108

Other Res - 185 Att - 125
Avg. Sales Price $264,243 $161,941
Sales Price per/sq.ft. $136 $142
Indian River Res - 95 Att - 125
Avg. Sales Price $487,523 $161,857
Sales Price per/sq.ft. $197 $118

Banana River Res - 83 Att - 135
Avg. Sales Price $487,976 $194,774
Sales Price per/sq.ft. $208 $138

Sykes Creek Res - 49 Att - 5
Avg. Sales Price $289,696 $232,910
Sales Price per/sq.ft. $147 $123

Lakefront Res - 789 Att - 129
Avg. Sales Price $222,568 $138,772
Sales Price per/sq.ft. $106 $99

Ocean Front Res - 33 Att - 608
Avg. Sales Price $939,863 $287,442
Sales Price per/sq.ft. $327 $184

Newfound Harbor Res - 12 Att - 2
Avg. Sales Price $445,925 $168,500
Sales Price per/sq.ft. $161 $113

Canal - Navigable Res - 250 Att - 40
Avg. Sales Price $338,717 $173,502
Sales Price per/sq.ft. $165 $123

Canal - Drainage Res - 150 Att - 3
Avg. Sales Price $136,917 $189,500
Sales Price per/sq.ft. $83 $106

Pond Res - 120 Att - 72
Avg. Sales Price $182,283 $124,752
Sales Price per/sq.ft. $102 $103
Indian River Res - 84 Att - 92
Avg. Sales Price $489,396 $128,919
Sales Price per/sq.ft. $172 $98

Banana River Res - 69 Att - 110
Avg. Sales Price $442,564 $153,590
Sales Price per/sq.ft. $177 $112

Sykes Creek Res - 41 Att - 14
Avg. Sales Price $262,102 $187,878
Sales Price per/sq.ft. $140 $99

Lakefront Res - 554 Att - 117
Avg. Sales Price $207,705 $118,066
Sales Price per/sq.ft. $98 $80

Ocean Front Res - 27 Att - 539
Avg. Sales Price $679,144 $243,343
Sales Price per/sq.ft. $252 $150

Newfound Harbor Res - 7 Att - 6
Avg. Sales Price $355,628 $172,233
Sales Price per/sq.ft. $132 $102

x
Canal - Navigable Res - 240 Att - 39
Avg. Sales Price $289,902 $168,012
Sales Price per/sq.ft. $138 $113

Canal - Drainage Res - 100 Att - 3
Avg. Sales Price $122,453 $65,833
Sales Price per/sq.ft. $74 $69

Pond Res - 39 Att - 34
Avg. Sales Price $217,962 $138,032
Sales Price per/sq.ft. $102 $102
Source:  Melbourne Florida Area Association of Realtors (MAAR) Annual MLS Sold Statistics Report  - Waterfront

 

ALL Home & Condo Sales (MAAR)

 

2005 Prices thru July 15 2005 2004 Prices 2003 Prices 2002 Prices
Total Sales - 6152 units
2 BR 281 Avg. Sales Price $183,538
3 BR 3062 Avg. Sales Price $233,360
4 BR 1215 Avg. Sales Price $340,036
Condos 1432 Avg. Sales Price $274,008

Compared to 2004: Reflects a 43% increase in
overall sales with average sales
prices increasing by 27 %

Time on Market of Units Sold
Days #S/Fam #Condo
 
1-30 441 139
31-60 1886 477
61-90 1170 309
120+ 592 190
91-120 616 309

Residential with in-ground pool - 1179
Avg. Sales Price $380,070
Sales Price per/sq.ft. $179

Golf Course Res - 112 Att - 60
Avg. Sales Price $345,080 $211,710
Sales Price per/sq.ft. $157 $154

1 Acre + Res - 259 Att - 23
Avg. Sales Price $476,957 $491,578
Sales Price per/sq.ft. $188 $206

Total Sales - 10794 units
2 BR 556 Avg. Sales Price $123,928
3 BR 5340 Avg. Sales Price $177,624
4 BR 2164 Avg. Sales Price $283,520
Condos 2425 Avg. Sales Price $212,865

Compared to 2003: Reflects a 7 % increase in
overall sales with average sales
prices increasing by 28 %

Time on Market of Units Sold
Days #S/Fam #Condo
 
1-30 873 291
31-60 3369 893
61-90 1863 470
120+ 980 239
91-120 1249 525

Residential with in-ground pool - 2046
Avg. Sales Price $316,224
Sales Price per/sq.ft. $147

Golf Course Res - 150 Att - 111
Avg. Sales Price $280,893 $170,202
Sales Price per/sq.ft. $127 $119

1 Acre + Res - 490 Att - 52
Avg. Sales Price $378,262 $378,403
Sales Price per/sq.ft. $152 $187

Total Sales - 10046 units
2 BR 533 Avg. Sales Price $99,220
3 BR 4940 Avg. Sales Price $141,778
4 BR 1963 Avg. Sales Price $229,619
Condos 2405 Avg. Sales Price $160,301

Compared to 2002: Reflects an 18% increase in
overall sales with average sales
prices increasing by 15 %

Time on Market of Units Sold
Days #S/Fam #Condo
 
1-30 579 188
31-60 2470 781
61-90 1816 522
91-120 1056 299
120+ 1687 600

Residential with in-ground pool - 2011
Avg. Sales Price $239,111
Sales Price per/sq.ft. $115

Golf Course Res - 141 Att - 108
Avg. Sales Price $246,806 $125,026
Sales Price per/sq.ft. $107 $91

1 Acre + Res - 477 Att - 16
Avg. Sales Price $259,891 $216,012
Sales Price per/sq.ft. $113 $141

Total Sales - 8508 units
2 BR 494 Avg. Sale $78,348
3 BR 4221 Avg. Sale $124,505
4 BR 1576 Avg. Sale $205,535
Condos 2052 Avg. Sale $137,313

Versus 2001: Reflects a 10 % increase in
overall sales with average sales
prices increasing by 16 %

Time on Market of Units Sold
Days #S/Fam #Condo
1-30 554 215
31-60 2031 686
61-90 1487 421
91-120 868 249
120+ 1505 478

Residential with in-ground pool - 1787
Avg. Sales Price $214,156
Sales Price per/sq.ft. $102

Golf Course Res - 141 Att - 87
Avg. Sales Price $200,255 $110,471
Sales Price per/sq.ft. $92 $78

1 Acre + Res - 384 Att - 0
Avg. Sales Price $229,470
Sales Price per/sq.ft. $99

Source:  Melbourne Florida Area Association of Realtors (MAAR) Annual MLS Sold Statistics Report - All Areas