Something Abnormal Just Happened in Vero Beach, FL Housing Market

There is something abnormal going on in Vero Beach. Some houses come on the market and they sell relatively quickly. Others 6 months to a year or more. During CO, whether you're on the barrier island or you're on the mainland, regardless of price, we started seeing what I call a bifurcated market. So broadly in Vero Beach, inventory is up, days on market is up, so condition is everything. What's important to know, we've talked before, real estate is so hyper local. Parts of the west coast of Florida are among the most challenged in the nation along with our our friends in Austin.

In Vero Beach, our inventory level is not quite even back yet to precoid levels. Now it's higher than it was. And the days on market to sell is now 120 to 300 days. But even the days on market are not back to where we were precoid. Well, why is that? One, we've got a low density mandate. Our actual number of houses to sell is relatively fixed. Secondarily, there's been a whole concept or a whole trend of what we call the great withdrawal. We've talked about this before, not just Vero. Any market where you have sellers that have a lot of equity in their homes and let's face it after co if you've owned precoid you gained 40 to 50%.

We all have a lot more equity than we did precoid. Many sellers have attempted to sell taken the temperature. They're choosing to withdraw because they can wait. Now will those houses eventually come back? They will. Life has a way of throwing curve balls. Eventually, those sellers will sell, but for now, a huge cohort has chosen to withdraw, which means inventory is actually lower now than it was in April. So, condition is everything. We're in a bifurcated market. And if you drill down even further, here's where it gets interesting. Let's talk about the barrier island.

Our average price on the barrier island is around 16 to 1.8 million. If you look at not just sales but the price of what is selling, let's break up the market into four quadrants. Luxury just below the middle part of the market, the lowest 25% of the market. So four quadrants. The under 1 million quadrant and our luxury sector are getting the most action. Well, under a million is an easier check. a lot more people have the ability and the resources to do that and it's a less risk-filled proposition. Frankly, our luxury sector 3 million 4 million and above that's an ultra high net worth buyer who has what I would call more elasticity and what they could do in their purchase power.

They're less worried about interest rates, the S&P, etc. So, what does that leave? That leaves the middle sector of our market. I would say between like5 to 25 probably the most tepid in terms of demand. So what's the seller to do if you've decided you have to or want to sell? That's why you need to understand hitch your wagon to a trusted advisor. Take a look at your house from a buyer's perspective. Look at your house. Sometimes the most important work is what you do before you list. take a look at it and say, "Do I need to do nominal investments to get bigger bang for my buck?" What does that mean?

Painting your front door, changing your new lock set, maybe painting your interior walls. Look at how can you invest modestly. I'm not saying do big rena. Don't do your kitchen. Probably don't do your flooring unless there's horrible stains on your rugs. Then do carpet because it's just not a good look to have a cement floor. People say, "Oh, just rip up the carpet." Don't do that. It just screams project to your buyer. Talk to your trusted real estate advisor upfront and say, "What is our road plan for a modest investment to bring this house to market where it's going to be perceived to be movein ready?" Then what I want you to think about is in a low volume market where we are right now, it's hard to get your home sold.

Don't forget the buyer has the right to inspect. Here in Florida, most of our deals are on an ASIS contract, which gives the buyer an at will right to terminate for any reason. Don't have that inspection be a chance for them to lose their order for your house. How do you do that, Sally? Commission a pre-listing home inspection. Have an inspector come in. It might cost you $500 or $700. Take a look. They'll look at your air conditioning, your windows, your doors, your appliances. There could be things that you're not even aware of that could be easily fixed, not in the heat of a deal.

When you're in the middle of an inspection period, you then bring it to market and you say, "We've already been pre-inspected." That gives a buyer confidence in buying your house if it's not a brand new house. So, take a look at your house like a buyer, both aesthetically, and get it ready and then also have a home inspector take a look at it. So, let's talk about who has the advantage in the market of Vero Beach, Florida, and what pitfalls can you avoid, whether you're a buyer or a seller. Some pro tips.

Broadly, I would say it's slightly a buyer market, which means you as a buyer, if you're out there, phrase about, you know, the best time to buy is when no one else is. When there is tepid demand, it's a good time to buy because it means you're going to have less competition, which means you may not have to pay full price. depends how long it's been on the market and the seller circumstance and their motivation and you're broadly going to have less competition which means frankly more power to you at the negotiation table.

Is there a time when sellers have the advantage? Mhm. And that is pretty much going to be anybody that has a truly moving ready house that has very unique features and it is ready to go. So, if you're a seller and you have something intrinsically valuable, whether it's your neighborhood or something specific about your house, you may be in the driver's seat, but broadly, I would say a little bit to the buyers, but you have to know what you're looking at and consider micro markets. And my advice would be figure out what is important to you.

Now, if you're not going for the jugular on a specific price point, you can be more flexible. If price is your bottom line and that's the most important thing to you, I respectfully would say that's fine if it is. You need to then be more flexible on the house. All sellers have different motivations in terms of why they're selling and what number they would take. And certain sellers have the ability or the desire to do a deal that's different than another. So then you're going to need to be flexible on the house.

So let's talk about pro tips to avoid making an expensive mistake. If you're a buyer, work with a trusted advisor who's local and understands our nuanced micro markets. So don't mistake lensure as meaning it's the right play and if you feel loyal to your friend and person that you were working with in parts elsewhere say do you have a trusted advisor that you can connect me to? That way they can make money by getting a referral fee. you've done right by them, yet you have trusted advisory in a market that you need to know about with somebody that's embedded in the market.

The second thing is understand that there are micro markets within certain communities. You're going to have command are going to command premiums. Understand where consumer tastes are. And if you're with everybody else that you want moving ready or maybe you want old VMR, we're going to go see that in a minute. We're going to hop in the car. Those are going to command premiums. So, you need to understand what your buy box is and how does it relate to everybody else's because it's going to affect the deal you can get or not get.

Also, do your homework before you even contemplate a house. If there's an association, please take a look at the restrictions. Can you rent? Is your pet going to be allowed? Is your pet too big? Do you have six dogs and you're not going to be allowed to live there? I don't want you to fall in love with the house. Then you take a look at the rules and rags and go, "This doesn't work for me. I can't live in here. That's a total bummer for everybody. Get a new insurance quote.

Don't worry about what the existing owner is paying. You don't know what kind of policy they have, how long they've been there. You can even call the utility companies or ask the listing broker through your agent what's the cost of utilities. So, you understand your monthly nut. It's super super important. If you're getting a mortgage, all of those additionals go into your income to debt ratios and could affect how much house you can afford. Let's talk about amenities for a minute. There's modest amenities like a little clubhouse with a fitness center and a community pool.

Maybe they take care of your yard. And then you've got the Disney World amenities that have everything known to man. They're both great. The question is what's important to you and do they offer value to you? Two things. One, the more amenities there are, the higher the cost of those dues are going to be. And if they're of value to you, fantastic. If they're not, you're going to be paying the same fee for those as your neighbor next door who may use them all the time. And if you're barely using them, and they use them all the time, you're helping his per use go down and you're subsidizing his use of the amenities.

So that's the score on amenities. Number one. Number two, think about amenities as a bricks and mortar asset that that association is going to have to maintain over time, whether it's gym equipment that needs to get bit get changed out, a roof on a clubhouse. So, those are things that eventually everybody's going to be having to pay to maintain. So, do your proper due diligence before you pursue a house. So, if you're a seller, let's talk about pro tips, critical mistakes to avoid. The first thing is pricing as if it's 2022.

Broadly in Vero Beach, our market is down 5 to 10%. Depending on condition, location, seller circumstance. The worst mistake that you can make is overpricing a house. Use data to inform your decision making. That's where your trusted real estate advisor can help you. Not what sold a year ago, not what sold 2 years ago, literally past 6 months. And I even like to look at pendings, meaning haven't closed yet. So if it contracted in February, that's an old sale and you really can't use it. What are the new data points and what am I competing against?

So make sure you price your house to sell. If you price it too high, the first 30 days are when you have the most power as a seller. And if you overpric, you're not going to be taken seriously and you're going to lose potentially good buyers out there because your price is going to be telegraphing. We are not serious and we don't really want to sell. Number two, make sure your condition, as we talked about before, comports with your price. Make sure you are bringing your house to market that looks as movein ready as possible.

Think Instagram, think HGTV, think Sell It by Sirand, think Pinterest. all of the fields that people want to see. Talk to your trusted advisor. Decide who you're going to work with. Pull them in early. Let's take a look at your house. What can we do that's nominal in terms of investment to give you big bang for your buck. Let's talk about thinning out some of your possessions and doing a soft style of the property so the photos really sizzle. Maybe I need to bring in some of my softstaging stock, pillows, fake orchids to je up the sizzle on the photos when they hit and people see them, etc.

Do that work ahead of time. And if you need a roof, talk to me about a strategy to get your roof done where you may not have to come up cash out of pocket right away. There is a way and I've got trusted relationships with several great roofers in town where they will do the roof and you can put the payment for the roof out of your sale proceeds. So what that means is you're able to say new roof to appeal to as many buyers as you want to and as you want as you can which is critical and then the buyer doesn't need to take their money to do your roof and then if whether I need a mortgage or I'm a cash buyer I can buy your house.

So, be mindful. Buyers want move in ready and they don't want your credit for your old carpet or your old roof. Do the work and let's come up with a creative game plan to get the work done. Makes it cash flow neutral to you and your buyer. We talked about why Zero Beach is currently in a bifurcated market. Why that is and why it's probably not going to change anytime soon and what you can do about it if you're a buyer or seller. We talked about buyer pitfalls to avoid, seller pitfalls to avoid, and pro tips to get the best outcome whether you're a buyer or a seller.

And if you are continuing to be intrigued about this idea of coming to Vero Beach or exploring Florida, DM me or call me or reach us through our contact form and we can figure it out together. And if it ends up that Bureau is not right for you, but Fort Lauderdale is, or Barcelona or Jackson Hole, I have trusted advisors that I know, like, and trust that operate just like I do all over the globe. And it would be my privilege to make that connection for you so you can find your place in paradise.