In-between Season and Doing Fine

 Ah, May at the beach. The snowbirds, baseball teams and spring breakers have departed. The weather has warmed up and the roads, restaurants, grocery stores, beaches and golf courses are uncrowded for a few weeks. By the end of this month traffic will pick back up as schools let out for summer and day-tripping inlanders join our early summer vacationers. In the interim, the locals are breathing a little easier and walking a little slower and enjoying this beautiful place that we share.

Our condo inventory has pulled back from its recent high. This morning there are 366 condo and townhouse units for sale in Cocoa Beach and Cape Canaveral. In the month of April 42 units found a buyer so we are looking at about a nine month supply at that same sales rate. Half of the remaining inventory has been for sale for three months or longer.

There are 79 single family homes for sale in the two cities and 11 homes found a buyer in April so about a seven month supply of homes.

Buyers are active in our market although cautious. The number of price drops exceeds new listing by a wide margin daily. As sellers accept the 2025 market reality and modify their expectations accordingly I believe we’ll continue to see a steady stream of sales barring some further macro shocks to the economic system.

Get out there and enjoy May at the beach. If you haven’t stopped by the Koko Japanese Pub downtown Cocoa Beach for a meal, make plans to. They are a welcome addition to our quite varied and good restaurant selection downtown. A shot of their chirashi bowl and bluefin roll (background) at top. Both excellent.

“It makes sense to dance while the music's playing.” _Maynard G. Krebs

🐣 Easter Market Update: Rising Inventory, Price Gaps & What Buyers Need to Know

 

Happy Easter Sunday, everyone!

I just got back from a week away (you might guess the spot from the photo above 👆), and the Cocoa Beach and Cape Canaveral condo market was anything but quiet while I was gone.

Here’s a quick snapshot of what happened in just the past week:

• 98 new condo listings

• 89 price reductions

• 9 new contracts

Let’s break down what’s happening and what it means for both buyers and sellers.

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📈 Inventory Keeps Climbing

At the end of December, we had 298 condo units for sale in Cocoa Beach and Cape Canaveral. As of this week—just 16 weeks later—we're up to 405.

• 236 of those were listed since Dec 31 (not counting units that came and went quickly).

• Some listings are older ones that have been relisted to appear "new."
  (Yes, some agents are still using the MLS loophole to reset days on market by assigning a new MLS number.)

• Roughly 200 units have been trying to sell since Thanksgiving or earlier.

• 23 of those have been sitting on the market for 300+ days with no bites.

👉 Bottom line: It’s a tough landscape for sellers—especially those pricing with last year’s market in mind.

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🧾 Condo Fees on the Rise

With new legislation requiring structural reserve funding, many condo associations are now catching up—some more slowly than others.

• 135+ active listings have monthly fees of $800 or more.

• Some condos still don’t include funding for structural reserves in their budgets—even if the required Structural Integrity Reserve Study (SIRS) has already been completed.

• The Legislature gave associations until Dec 31, 2025, to fully implement funding… and many are waiting until the last minute.

⚠️ Heads up for buyers: If you haven’t thoroughly reviewed the budget and SIRS documents, you could be surprised by a big fee jump at the end of the year.

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💰 Asking Prices vs. Reality

Let’s talk numbers. Since January 1 (excluding The Surf, a brand-new build downtown):

• Median closed price for oceanfront condos: $350/sq ft

• Median asking price for similar units on the market: $412/sq ft

That’s a 17% gap between what sellers want and what buyers are actually paying.

Sure, $/sq ft isn't a perfect metric—it doesn’t capture unit condition, floor level, or view—but it’s a helpful way to spot market disconnects. And right now? The disconnect is real.

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🧠 Knowledge Is Power

If you're buying or selling right now, being tuned in to the real data is everything. The market is shifting. Prices, fees, and buyer expectations are not what they were six months ago.

🎯 Smart buyers will spot the deals.
💡 Savvy sellers will adjust their strategies.

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📌 Final Thoughts

It’s not all doom and gloom—there are opportunities out there. But success in this market depends on understanding where things really stand.

As always, knowledge is power.
Have a great week, and happy hunting. 🏝️

Economic Policy & Effect on the Cocoa Beach Real Estate Market

First published March 7, 2025 at larrystake.substack.com. The reposts here typically lag about a week behind Substack but I thought the subject of this post deserved a swift repost.

I’d love to hear readers’ opinions and thoughts on the effects of a severely wounded stock market and the likelihood of a recession in the US (60% according to JP Morgan unless tariffs are ended) on our real estate market. Comment to this post with any thoughts or opinions. What does this mean for sellers and buyers of real estate?

Since January 1st, 82 of the 126 condos closed in Cocoa Beach and Cape Canaveral were purchased with cash. That’s 65% of the transactions. Single family homes were bought with cash at a lower rate than condos but still over 50% with 11 of the 21 closed homes paid for with cash. The majority of homes are purchased as a primary residence so they have always been financed at a higher proportion than condos of which a large majority are intended to be used as second homes or investments. Condos that are not primary residences and bought with mortgages typically require down payments of around 25% so a substantial amount of cash is required even when using a mortgage.

Where does the cash to purchase a condo or make the large down payment usually come from? In my over two decades of selling condos here, my clients have most often liquidated investments to fund the purchase. Will the double digit percentage decline in the total US stock market in just two days deter prospective condo purchasers? Are there any who have lost so much already that a purchase is no longer possible? On the other hand, will the prospect of a prolonged declining stock market and recession encourage people to seek investment in real estate as an alternative to stocks? Can Florida real estate be expected to appreciate in the same economic environment that is cratering stock valuations? Before “Liberation Day” our real estate market was already in a precarious position with the highest inventory level in fifteen years and rising and with a sales rate that’s been declining for the last three years.

Maybe the tariffs will be quickly rescinded or modified and the market and economy will reverse course. Or maybe the tariffs will turn out to be good for the economy, an outcome that seems so farfetched at this point that I feel foolish including it as a possibility. I am not an economist but I suspect that the pool of prospective buyers for real estate in Cocoa Beach, especially for condos, has taken a major hit that is likely to impact the number of sales and selling prices moving forward. We were not trending positively before and it seems almost certain that this week’s events will not have a positive effect. Somebody please convince me that my suspicions are unfounded. I encourage your comments.

On a positive note, as is always the case this time of year, traffic has lightened up and there aren’t as many people in restaurants, at the grocery store or on the golf course. The majority of our snowbirds and spring breakers have left for home and we will continue to see fewer visitors until the end of the school year when families begin taking their summer vacations in June. May is my second favorite month in Cocoa Beach behind October. Both are uncrowded months and both enjoy good weather (barring a hurricane in October) and for the few visitors who are in the know, some of the cheapest lodging rates of the year.

Related and interesting trivia: the number of cruise passengers who embarked on their five ships yesterday in Port Canaveral was about one and a half times the population of Cocoa Beach. The Royal Caribbean ship, Utopia of the Seas, that departed yesterday for Nassau has a capacity of 5668 passengers, almost half the entire population of Cocoa Beach. Thankfully very few of those passengers find themselves driving through Cocoa Beach.

Please let me know your thoughts about your expectations of our market going forward. I suspect I may be too close to this to have considered every angle and my mind’s music is forever stuck in a minor key. If you are uncomfortable commenting publicly feel free to contact me directly.

“The human mind is like a parachute. It has to be open to work.”

State of the Cocoa Beach Market

This post was first published at Substack on March 25. To receive notice of new posts when they are published subscribe to larrystake.substack.com at Substack.com.

Falcon launch yesterday as seen from the backyard. We were able to watch the rocket return and land at the Cape a few minutes later followed by the double sonic booms.

I concentrate most of my research and commentary on our condo market since condos and townhomes typically represent about five times the number of sales and listings in the Cocoa Beach and Cape Canaveral market that single-family homes do. Right now there are a total of 465 total residential listings in our market and only 74 of them are single-family homes.

Looking at this same time last year there were 41 homes for sale and they were selling at a rate of eleven per month so less than a four month supply on hand in March 2024. So far, in the eleven weeks since January 1, exactly twelve homes have gone under contract. At that sales rate we have about a 17 month supply if no increase in inventory so enough to last until about August of next year.

What does this mean for those who are trying to sell their homes? With about one home finding a buyer per week, competition for buyers has almost tripled in just a year. Sellers should expect to take longer to sell and should not expect to get as much as they might have last year. Without an uptick in the sales rate, with a 17 month supply, the math says several of the current listings will still be on the market this time next year. Those will be the ones unwilling to accept the current reality and who do not price accordingly. Those who aren’t paying attention and pricing fairly are not going to sell. Buyers are fewer and they’re skittish with employment worries and uncertainty with regards to insurance and the economy in general. Our current market demands a different strategy. Good luck to those hoping to sell and congratulations to those twelve who successfully picked off buyers so far this year. The other 74 still on the market would be prudent to study the details of recent comparable sales, primarily the selling prices. Knowledge is power.

This month marks the 21st anniversary of this blog. I have never been without material to write about. When I began writing about our market we were in the boom years of 2004 to 2006 when buyers were being chosen by lottery just for the opportunity to reserve pre-construction condos. The crash hit us hard in 2007 and we quickly transitioned from a strong seller’s market into a market dominated by distressed sales. There were zero distressed sales in 2007 but in 2008 we began seeing short sales as previously optimistic investors began unloading negative-equity properties with cooperation from their lenders. By 2010 over half of all sales were distressed, either short sales or foreclosures. It took until 2017 to completely work through our supply of distressed listings. Inventory was at its peak in 2006 and began a decline that lasted until 2015 when it stabilized for a few years before resuming its decline until 2022 when it finally bottomed. It has been steadily increasing since 2022 and we now have the highest inventory of residential properties since 2010 combined with a sales rate that has been in decline since 2021. We shall see how this works out but the trends in sales and inventory do not signal a healthy market. I would advise sellers to look at their competition and the comparable properties that are selling and price accordingly. That is imperative if they want to join the shrinking group who are being successful.

"If you are leaping a ravine, the moment of takeoff is a bad time to be considering alternative strategies." _John Cleese

What's It Really Worth? (revisited)

The Surf oceanfront condo downtown Cocoa Beach with the Coa Restaurant and Coa Lounge ground floor. The restaurant and lounge opened last week.

______________________________________________________________

This a post from 2015 with updated numbers and stats. The updated version was first published at Larry's Take at Substack on March 20.

"What do you think it's worth?" That's the (literally in some cases) million dollar question. No one wants to sell for less than actual value or pay more than, but no one, appraisers, tax authorities, Realtors nor Zillow, has an always accurate method for determining present value of a property. In the rare situation of multiple recent sales of identical properties we can get very close. For everything else, looking at recent sales of the most similar properties, holding a wet finger in the breeze and adjusting accordingly is the best anyone can do to estimate current value. These adjustments are where the variations happen.

How much more, if any, is an identical 10th floor unit worth over a 4th floor? 3rd over 1st? How much should I deduct for no garage or add for a second garage? No elevator? High ceilings? Forty year old versus 15 year old building? Is a weekly rental unit worth more than a three month minimum rental unit? How much discount for a compromised ocean view? Is a complex with tennis courts worth more? How about reserve account balances? There are so many variables that the best anyone can do is come up with their best idea and hope to land on the good side of their estimate.

This is where it can get interesting. If I do my homework and crunch the numbers carefully and come up with a number that I trust is close, I will probably still have to be flexible if I hope to consummate a sale as the other party's opinion of value is almost certain to be different than mine. If I treat my number as a line not to be crossed, I am setting up for failure. I have seen deals fall apart with buyers and sellers whose drop-dead numbers were ridiculously close but which neither would violate. If I am selling in a dropping market, it may not matter if I accept an offer for less than I had hoped and, in fact, it might be prudent. Same holds true for buying in a rising market. If similar properties have been appreciating, paying more than my opinion of value might make sense. This is especially true when inventory is low, unlike today. For everyone involved it helps to remember that both sides' numbers are ESTIMATES.

Where do we start? Let's look at our bread and butter property here in Cocoa Beach and Cape Canaveral, a direct ocean condo with two bedrooms and two baths. The usual starting point for estimating value of properties of similar size and condition with similar attributes is price per square foot. Direct ocean units currently for sale with two bedrooms and two baths have an asking price per square foot ranging from a high of $668 to a low of $313 per square foot. Both the high and the low may actually be priced to perfection depending on their amenities and condition which are varied. There are 19 units asking more than $450 per square foot despite the fact that only one unit has sold for more than $450 a square foot in 2025. That unit in a weekly rental building closed for $497 per square foot yet there are three units in weekly rental buildings currently asking more than $600. Unwarranted optimism? Probably. Remember, opinions and differences thereof.

Excluding the brand new units in The Surf downtown Cocoa Beach, and a one bedroom unit at The Oaks in Cape Canaveral, units of all sizes closed since January 1, 2025 with an unobstructed east ocean view sold for between $329 and $497 per square foot with half landing between $345 and $442 per square foot. To put that in perspective, that means a typical 1300 square foot, direct ocean 2/2 unit will most likely sell in this market for somewhere in a range of $448,000 to $575,000. Conditions, rental restrictions and amenities will determine where in that range, or outside it, a unit’s value is. Don't marry your opinion of value. There is obviously a lot of wiggle room surrounding it.

Our takeaway: Your opinion of value, just like mine and every seller's and every buyer's is just an opinion. The owner of the weekly rental condo who just dropped his price to $668 per square foot no doubt thinks his opinion of value is correct and that that price should surely attract a buyer. Now if he can just find a buyer with the same opinion he may be able to sell. Before the Boardwalk top floor 2/2 closed last month for $497 a square foot I thought that $450 a square foot was probably the top in this market cycle for any older, unexceptional 2/2 oceanfront condo here. My opinion had to change. Flexibility, my people.

There have always been outliers that sell outside the range and there will continue to be. There are units that deserve consideration even if above our recent selling range but those better be exceptional units and/or in exceptional buildings. In my opinion, most of the units currently asking above the recent selling range are unlikely to sell close to their current asking prices. The exploding inventory and growing reticence of buyers does not bode well for the sellers at the optimistic end of our pricing spectrum. Perhaps my take is flawed. We can hope.

"When I found the skull in the woods, the first thing I did was call the police. But then I got curious about it. I picked it up, and started wondering who this person was, and why he had deer horns." ___Jack Handy

Spreading Acceptance

Some of the listing and pricing histories of older MLS listings in Cocoa Beach and Cape Canaveral resemble the five stages of grief expressed numerically. The oceanfront condo that hit the market a year ago asking $629,000 that is now at $419,000 after eleven price drops appears to have reached the acceptance stage but the market may yet test that. Same story with the Cocoa Beach house optimistically listed a year ago for $1,050,000 now asking $699,000. Some of the other long-lived listings tell a different story. The listing that has reduced their price by just 3% from $459,000 to $445,000 over the course of two years tells me this seller either isn’t serious about selling or they’re unable or unwilling to bring outside cash to the table to cover negative equity. If the latter case, it’s an incubating short sale. That seller is, after two years, still in the very first stage of denial.

The overall optimism of sellers in our market is waning. A lot of listings have been languishing for months (85 for six months or longer) while more realistically-priced new listings are picking off buyers. The practice of pricing crazy high and hoping for a miracle is still alive just not as widespread as it was before last year. Some of those who went with this method in 2023 and 2024 failed to sell and their properties are among those still sitting on the MLS. In an appreciating market, like ours was up until 2022, pricing ahead of the trend worked sometimes. Problem is, we are no longer in a rising market and that strategy is not working. Agents and sellers are getting the message and the trend with new listings seems to be headed towards more realistic initial asking prices. Whether this will lead to increasing transaction numbers remains to be seen. We are well behind recent years in closed sales so far this year so I remain pessimistic about activity rising to anywhere near historical levels. The new units closing at The Surf condo downtown Cocoa Beach have propped up the number of closed condo sales making our market look healthier than it really is considering that most of those contracts were signed years ago.

Warning of the day: Transaction (junk) fees. It’s a repeat and longtime readers can skip this. You’ve heard it all before. Nothing has changed and people are still being robbed.

It’s one of my most often repeated messages but there are still consumers who don’t understand what they should expect to pay a real estate broker or how. Brokers and agents are taking advantage of the confusion and profiting from it. I was reading messages on a real estate forum yesterday and someone asked about two buyers’ agents they had interviewed. One was asking for 3% commission PLUS a $425 “administration fee” and the other wanted 2.5% PLUS a $725 fee.

Which is the better deal? Wrong question. One may be better than the other but they are both bad deals for the buyer. Despite the agents’ probable presentation of the fee as a normal and common expense, it is not. Asking a buyer to agree to pay a commission plus a junk fee is proof that those agents are putting their own interests before the client’s. The fee is one they owe their broker and it is no different than the agent’s MLS fees, a cost of doing business. Those agents have the freedom to work at a brokerage that doesn’t charge transaction fees or that keeps them low so that clients don’t wind up being asked to pay them. Hundreds of thousands of real estate agents in the US never charge a fee on top of the commission. They and their brokerages manage to thrive without resorting to what amounts to an auto-gratuity of a few hundred dollars slipped on their clients’ tab on a deal that they already made thousands on. Adding insult to injury, many if not most agents who engage in this odorous practice pitch the fee as “non-negotiable”. Don’t pay it and don’t leave your car keys unwatched around any agent who tries to get you to agree to one. If asked to pay one, ask the agent if you should include an extra $92 for the current quarter’s MLS dues. I mean, why not?

For those who may not have noticed, this is a warning that the speed limit through downtown Cocoa Beach and to the south end of town is now 30 MPH and there is a speed bump on southbound A1A at south 1st St. and northbound at 20th St. Cops are out and are willing to write you an invitation should you not be able to stay close to 30. You’ve been warned.

Write me up for 125

Post my face, wanted dead or alive

Take my license, all that jive

I can't drive 55

_Sammy Hagar

 

Condo Conspiracy - It's worse than we thought

Was the Florida Legislature’s response to the collapse of Champlain Towers South less about avoiding another building collapse than it was encouraged and guided by interests that stood to profit from the resulting legislation? It’s starting to look like the guidance presented to the legislature by the task force had a secondary motive beyond the headline of building and occupant safety. What if legislation could be passed that would put undue financial burden on condo owners in older buildings leading to opportunities for developers to buy out condos on prime property that could then be redeveloped?

Members of the Florida Bar’s task force assembled to guide the legislation have admitted since that while the aim was never to “create financial stress or inordinate burden on anyone” it “would lead to new redevelopment opportunities for developers”. Members of that task force now appear to have been biased even by those like myself who were, at the time, too naïve to suspect that.

It’s beginning to look like our legislators were hoodwinked into passing legislation that would put financial hardship on every condo owner in the state for the benefit of a handful of developers who had their eyes on older condos in south Florida as redevelopment targets. Even our Governor who signed the bill has realized the unintended consequences and has said the new reserve requirements are “imposing costs in situations where it’s not like the integrity of the building is at stake.” Meanwhile condo owners all over Florida including Cocoa Beach and Cape Canaveral are suffering the consequences of substantially increased fees to maintain the newly required 100%-funded structural reserve. While that may not bother owners who don’t intend to sell in the near term, it is front of mind for some of the older residents on fixed incomes that suddenly find themselves struggling to pay their higher condo fees.

Read the entire story as brilliantly researched and written by Alexandria Glorioso and Rebecca San Juan at the Miami Herald here: 

"Since you're a gunslinger, you can't start crying about getting shot." _Chuck D

Wicked Games and Lies of Omission

[First published at Substack on Feb. 21]

The State of Florida initially gave condo associations a deadline of December 31, 2024 to complete milestone inspections and structural integrity reserve studies (SIRS) but later agreed to allow them until the end of 2025 to begin funding of the new structural reserve fund. Affected condos in Cocoa Beach and Cape Canaveral are all those with any buildings three stories or higher and 25 years or older.

True to their history of procrastination, many associations chose to take advantage of that grace period to delay the funding in addition to those who already missed the first inspection and SIRS deadline which was about 20% of condos in some cities like Clearwater and as much as 62% in southeast Florida. The fees at some condos in our area suggest that they have yet to increase their fees to comply with the funding mandate even though they may have the completed SIRS and know how much increase is going to be required. I suspect some of them will stretch out the delay right up to the December deadline. That makes their fees lower than similar units and for those owners trying to sell, more attractive to prospective buyers who don’t know that games are afoot.

No master list exists for buyers to identify those associations but a good hint for prospective buyers are fees that are substantially below other similar complexes. Looking at the current inventory of condos in our two cities, the median monthly fee for a unit with at least two bedrooms in an oceanfront complex is $920. For all condo types the median is $716 per month. Regardless the advertised fee, hopeful buyers should confirm that funding for the structural reserve fund has begun in full before making an offer. If an advertised fee seems too good to be true it probably is.

TL;DR A condo may have completed the structural integrity reserve study but plan to delay the start of funding possibly until the new deadline of December 31, 2025. Buyers should not assume that the existence of a completed SIRS means that the current fees include that funding. Confirm that funding for the structural reserve fund has begun with a copy of the approved 2025 budget. Knowledge is power.

“You’re all in this together whether you know it or not.” _Charles Manson