INDIAN RIVER COUNTY — Housing inventory has been plummeting for two years on the island, in the county and across the state, but in terms of raw numbers there are still quite a few houses and condominiums on the market, especially in certain categories.
The pinch of dwindling supply hits home though, realtors say, when buyers bring their specific requirements to the table and discover that the exact house they are looking for may be difficult or impossible to find.
“There are 226 single-family homes and condominiums priced at over $1 million on the market on the island,” says Dale Sorensen Jr., managing partner of Dale Sorensen Real Estate Inc. “But if someone wants a million-plus home on the ocean, that cuts the number drastically. If they have a certain square footage in mind or want four bedrooms, the number gets smaller again. You end up with only a handful.”
Two years ago, when there were many more listings in all categories, buyers had a good shot at finding all the features they wanted in the location they had their heart set on for a price they could pay. Now they have to compromise in many cases and employ some lateral thinking to get what they really want.
Statewide, there were 99,534 single-family homes on the market in September, down from 188,213 in September 2010. Condo inventory was cut in half during the same period, dropping from 110,537 to 50,070.
In Indian River County, there were 1,501 single-family homes on the market in September, down from 2,542 a year before. September condo inventory was a third lower, year-over-year.
So the pickings are definitely slimmer, and the reduction in buyer choice goes beyond mere numbers.
“As properties sell in specific markets and categories, the ones that sell are the best properties at the best prices,” says Sorensen. “Now you are left with whatever is left. There are fewer great deals and desirable properties.”
“It is well-established there is less selection today compared to a few years ago,” says Michael Thorpe, co-owner of Treasure Coast Sotheby’s International Realty. “The shortage really hits home when you factor in a specific buyer’s criteria.
“The buyer might start out wanting a house with a three-car garage east of A1A built in the past 10 years with a really big great room, and that house may not exist or at least not at the price point the buyer has in mind.”
Thorpe says he deals with the disconnect between buyer expectation and supply reality by encouraging buyers to expand the geographic area they are considering and asking them to weigh which features really are must-have for them.
“We may have to show them the closest homes or condos to their search criteria and at the same time show them other things are actually better in some ways if they are open-minded.”
He also helps buyers see the potential in homes that seem to fall short.
“We have to get creative sometimes and bring in builders and remodelers to talk with buyers about a face-lift or expansion,” Thorpe says.
If the buyer wants a three-car garage and the house has a two-car, Thorpe might point out the lot is large enough to add the third bay and introduce a builder who can provide specifics. “We have relationships with a number of quality builders who in recent years have morphed from just building new homes into general contractors to stay busy and fill that niche.”
Christine McLaughlin, owner of Shamrock Real Estate Corp., says buyers are often shocked by the shortage of new, modern homes when they come to Vero Beach.
“There is no shortage of homes built between 1955 and 1975,” she says. “Many of them are beautiful houses, but they don’t have the open layout newer houses have or some of the modern features buyers may be looking for such as high ceilings, really big family rooms and granite countertops.
“Probably 50 percent of the houses in Central Beach and South Beach are older homes that seem obsolete to some buyers new to the market.”
Like Thorpe, McLaughlin educates clients about the potential of properties that aren’t perfect fits but that may be in great locations, at or near the beach or in a desirable subdivision.
“I see a lot of initial resistance to purchasing older homes on the part of buyers who come here not knowing what our market has to offer,” McLaughlin says. “The more due diligence they do, the more they see the value of buying for a location they prefer. Older homes are at a lower price and the buyer can renovate and get exactly what they want.
“I think people want the Vero Beach lifestyle more than they want a particular house. Once they decide they want to live here they manage to adapt their needs to what is available and find a way to make it work, whether it is tearing down what is there and build a new $1 million home or renovating to the tune of $300,000.
“They have to want the lifestyle and then everything falls into place.”
On the plus side, shrinking inventory is causing the stock of older island houses to be absorbed and upgraded and gradually pushing prices higher as more buyers compete for fewer available properties.
“I get calls from people interested in the lower price range who are hoping to get in on the Vero lifestyle with a $200,000 condo on the beach, but that doesn’t exist anymore,” says McLaughlin. “We had that 24 months ago. Now the price point at the lower end is $300,000 or more on the beach.”