Once in my younger life I was fascinated with the idea of a black box. It can be anything, and enterprise, a device. You do not know how it works, but you are analyzing the input and output, and based on that you can make pretty relevant statements about the effectiveness of the system or the device. And I thought of trying this approach to Oceanside Inn.
Take Oceanside Inn, a premier Daytona Beach Shores condo-hotel. Let’s assume that I now nothing about Oceanside Inn. But I have access to some data. In my case it is the list of condo-hotels units in Daytona MLS. We will not look at previous sales, only on what is on the market.
Of course this is not a statistically perfect analysis. The numbers are very small, and any fluctuation, any action, like recent purchase of 10 units in Plaza dramatically affected these number. This could put Plaza at about 13% and not 8.56% (D12).
So, there are 135 condo-hotel units for sale at this time (C15), and average number of units for sale in condo-hotels is 5.90%. Generally, the higher the number, the less happy the owners are. Often times it is an indication that something is wrong with the condo-hotel. “Normal” balanced market, if such thing even exists, should result in about 7% of units for sale at any given moment, more or less. We have 5.90%, which is a little under.
Oceanside Inn is more than double this number and triple the average for condo-hotels in the area.
What is the breakdown of prices among the condo-hotels? Generally, the higher the prices in otherwise similar properties, the better they are doing.
We start with units priced under $40K (no more under $20K and under $30K prices, wow). Out of 13 condo-hotels only 4 have units for less than $40K. What is wrong with them?
Daytona Beach Club is facing a major Special Assessment of up to $10K per owner, Daytona Inn has a special assessment right now. Sea Dip is traditionally one if not the least expensive condo-hotels, but considering that many of their units for sale are barely more than 200 sf, their low prices are sort of expected.
Look at column Under $50K. 31.58% of units for sale in Oceanside Inn are in this price range. They beat every other property. Which tells you that one-third of all units in Oceanside Inn are for sale in the second lowest price segment of under $50K.
And this is only if we do not know anything about Oceanside Inn, but if we admit that we do, then we know that two of those units offered for less than $50K are not studious, like units in all other condo-hotels for sale in this category, but double units, i.e. they have two separate rentable rooms, not one. So, if you would look at them as studios, their price would come to less than $25K per rentalbe fully functional room with a bathroom and appliances … It is not that Oceanside Inn has a lot of units in this price range, no. Simply put, Oceanside Inn under normal conditions should not have even been in this category.
Look at 3 most expensive price categories. Under $75K Oceanside Inn has by far the lowest number of any other condo-hotel, which has units for sale in this category. This should be the main category for Oceanside Inn, not under $50K and not even under $60K. But in this category they are 9th out of 9.
Oceanside Inn occupies the 4th position in the Under $100K group. It is pretty good. 3 new listings. Yet another cautionary moment. A week ago the percentage of units in this price range was 15.8% and today it is 31.58% (N10) simply because we got 3 new listings from the same seller. But it is what it is. Hope they will not get frustrated and sell the units for under $50K but I wouldn’t be shocked if it happens.
And the last, but not least. The most expensive category. Here Oceanside Inn takes the 6th place out of 8.
Not great by any stretch of imagination. But this is on the surface. This is, as we stated, if we do not know anything about Oceanside Inn. Looking at stats, we see that unit there are generally not expensive.
But what if we know something about Oceanside Inn? Like that out of the list of 13 condos based on its design and condition, it is not at the end of the list, absolutely not. It is 3rd on this list after very troubled Plaza Resort & Spa, and Daytona Beach Resort & Conference Center. Oceanside Inn is next. But Daytona Beach Resort & Conference Center has only 2 units selling for under $50K (no view, while every unit in Oceanside Inn has ocean view), and majority of their units are selling in two most expensive price categories: under $100K – 24% and over $100K a whopping 48%.
It is already couple of months since the parking garage is back in operation, and parking situation is no longer affecting the market.
So, what is?
If it is not physical condition, then what is?
If it is not the Special Assessment, then what is?
What if this is management?
What if this is the Board?
Stay tuned. I will write about it soon.
P.S. What would my practical advice be regarding buying a unit in Oceanside Inn?
If you are a value buyer on a budget, then shoot for unit 407 and 509. They are double units. Each room is rented separately, so basically you are buying a functional double unit for less than $25 per room. How can you go wrong?
If you are looking for the best unit, then there is one, which, actually, is not even listed today. And when I say “the best”, it is not only in Oceanside, but, probably, it would be the best buy today out of any condo-hotel for under $129K. Of course, it this unit happened to be in Daytona Beach Resort & Conference Center, it would be $200K. But it is in Oceanside Inn 🙂
Call me 386-405-4408. Follow this link for information about Daytona Beach condo-hotels, availability and prices