Saturday, September 16, 2017

After the Big Blow

My plastic yard flamingos survived their second hurricane, unmoved.

Around midnight Sunday, I began to question my decision to ride out Irma in a little oceanfront condo in south Cocoa Beach, especially considering that my mother-in-law was a hunkering down in the next room on my recommendation. I'd had my wife evacuate her to Cocoa Beach from her home in the projected path on the west coast. A storm passing 100 miles away shouldn't be a threat. Right? But, with no Weather Channel updates since the power went out at 7:30, and the intensity of the noise outside, I couldn't be certain that the storm hadn't taken a hard turn and was hitting Cocoa Beach directly. My doubts began when the first air conditioner blew off the roof and into the pool. I had an idea what it might be but with all shutters closed I couldn't be sure that it wasn't a Cessna. We all eventually managed to drift off to sleep in the absence of a shutter failure and woke early wondering what sunrise would reveal.

Not bad. No catastrophic building failures were visible in our immediate area but most every building was showing some signs of damage with older buildings faring the worst. Elsewhere Cocoa Beach had a few buildings that are probably total losses like the Sea Aire Motel and the funeral home among others. The downtown area was especially hard hit with many commercial buildings losing their roofs including my office and the Police Department/City Hall. It's now six days later and many areas of Cocoa Beach are still without power including my neighbors right across A1A in south Cocoa Beach and most of downtown. Water supply to Cocoa Beach was lost during the storm but most properties had water restored by Wednesday. During the waterless days I, like many residents, used a debris filled pool for my daily bath and as a water supply for flushing toilets.

Some traffic lights are working today and a few businesses have reopened. I just heard that downtown will likely not have power restored until after the weekend. Overall, we were fortunate to escape with the damage we had. I know those who suffered the greater damages or those still without power don't feel very lucky but it only takes a look at the Keys to confirm our fortune.

I won't try to detail all impacts but thought those who aren't here would appreciate some report of the impact. We are battered, bruised but still standing and, some of us, looking forward to a cooked meal.

"Get up, stand up: don't give up the fight." __Bob Marley

Tuesday, September 05, 2017

Grape Sky in Morning

I'm not sure what sailor's advice there is for purple sunrises but we got a beaut last week.

The first week of September and all of Florida is on alert for approaching Category 5 Hurricane Irma. It's still too early to know where landfall will be but most of us have our plans in place should we need to move.

I wish I could report that the inventory situation is improving but it's not. Our for sale inventory in Cocoa Beach and Cape Canaveral stands this morning at a mere 194 existing condos and townhomes and 54 single family homes. At the August rate of 18 closed sales those 54 homes will be gone in three months. The 194 condo units for sale will last 81 days if we continue to close 74 units a month as happened in August. Of course, that assumes all 194 are fairly priced. That isn't the case. Many of the overpriced of the 194 will continue to linger while new, fairly priced listings sell around them.

Six direct ocean units sold for $300 per square foot or more during the month. All six were nicely remodeled and had garages and three were sold fully furnished. The other ten direct ocean east facing units brought between $226 and $270/sf with 1st floor units and those without garages bringing the lower prices. We're seeing more buyers using mortgages for condos than earlier this year with slightly more than half of the 74 condo sales financed.

Twenty one of the condos sold in the first week on the market and over half sold in a month or less. When I look at the units still for sale, over a third have been on the market for over four months, a sure sign of overpricing in this tight market. Thirty one units are asking over $300 per square foot. A few deserve it and will probably get it but the vast majority are hoping for a miracle that's not going to happen. Sellers need to realize that lack of inventory doesn't mean buyers are going to pay whatever dream number they hang on their property. Buyers should be familiar with the comparable units that have closed to come up with fair offering prices. Offers well below asking price better have justification from sold comps. A fair offer well below asking that can be justified with comps stands a chance at success as long as the seller is reasonable. Unfortunately, most of the overpriced listings are not being sold by reasonable people. The market may be tight but the units that are selling are, for the most part, selling for fair value. I still get a lot of calls and emails from people looking for "deals". In 2017, in this market, that is usually a fool's errand that goes unfulfilled. Finding a fairly priced property is task enough and, so far, in this rising market, is being rewarded.

I hope everyone fairs well through the upcoming weather. LW out and hunkering down.
Completely off-topic but good advice about loaning money:

If you face the choice between feeling guilt and resentment, choose the guilt every time. If a refusal saddles you with guilt, while consent leaves resentment in its wake, opt for the guilt. Resentment is soul suicide.” ~Gabor Maté, MD 

Thursday, August 31, 2017

Getting Too Cute

I was reminded this week that experience alone is not a good measure of the quality of service one can expect to receive from a real estate agent. I closed a deal last week with a freshly licensed agent on what may have been her very first deal. I didn't ask not wanting to embarrass her. At any rate, recently out of real estate school, she handled everything from first showing to closing like a seasoned pro. She was responsive to every obstacle that presented itself and never fumbled once through the several week transaction. Her client was well-served and probably didn't realize how well they were being represented.

This week I am trying to put together a deal with an older agent with several decades of experience under his belt. Like far too many experienced agents, he is embarrassingly out of date on his contract knowledge and has asked for several crazy changes to the contract that are dangerous for his client and that will likely sabotage the deal. He has taken two days to respond to every question or counter-offer and I'm currently on day three waiting for a response to our last counter. I doubt that his elderly client is aware of how he's mishandling the listing. She only knows that he's got enough experience to be good at what he does. Not. Those of us with years of experience run the risk of becoming too cute for our clients' good. Prime example is the very common demand for escrow deposits to be held at the title company. That's a no-no that any new agent knows the reason for. Not so with many experienced agents who should know better.

Buyers and sellers, don't let your agent's preoccupation with the minutiae of the deal torpedo the deal itself. Question their recommendations if they don't sound right to you. The difference of a few days on a contractual time period may not be material and in most cases is not worth losing a deal over. I'm looking at you Mr. 15-day-VA-loan-approval guy. Likewise, demanding a delay of title commitment by a few days is of little benefit to a seller and actually damaging if it contributes to a buyer withdrawing. Eyes on the ball, guys. No score, no check.

I took the picture above of a shoreline in Mosquito Lagoon this week on a fishing trip with Travis Tanner. My Bahamian buddy and I fish with Travis every year and this trip was like every previous year, plenty of fish and a great experience. We caught all the redfish we cared to pull on and had a great day on the water. I highly recommend Capt. Travis if someone wants the fishing trip of a lifetime in these pristine waters in the shadow of the launch pads. He can be found at A trip would be a great present for a loved one.

"I get up in the morning looking for an adventure." __George Foreman

Sunday, August 13, 2017

Ripping Cocoa

I sat down at the Abaco Inn last week for an afternoon hydration and a guy on a nearby stool nodded and said, "I used to surf Cocoa all the time." Huh? I guess he saw the confusion on my face and pointed at my Cocoa Beach Surf Company baseball cap. Cheers. If you surfed in Cocoa it was on a boat wake. I remembered the agent from Orlando coming to our office who called saying he had been all over Brevard Avenue but could not find our office. The Orlando TV stations and newspapers are notorious for making this same mistake.

Remember the Oscar Meyer bologna kid? My city has a first name. It's C O C O A. My city has a last name. It's B E A C H. If, like either of these people, one omits my city's last name, the margin of error is about 10 miles and in the case of the bar patron, the Indian River rather than the Atlantic Ocean. The Orlando agent was scouring Brevard Avenue in Cocoa Village not Cocoa Beach, three bridges and 20 minutes drive time away.

Small things can undo large things. It's not uncommon for a contract to specify issues to be completed prior to closing. Examples: "front door to be replaced", "all contents to be removed and unit cleaned", "broken window to be replaced", "hurricane shutters to be serviced and operational", "refrigerator to be installed". The buyer's final walk-through prior to closing confirms to their satisfaction that the agreed upon items have been completed. No fridge and closing doesn't happen until it's delivered or an agreeable price concession is made. If the buyer needs an item to be done in advance of final walkthrough, the timeline needs to be specified in the contract. I saw  an otherwise solid contract fail a couple of weeks ago because the buyer demanded an appliance installed a month before closing rather than by closing. A simple missing clause on a contract torpedoed the deal.

I called a listing agent yesterday to discuss her overpriced oceanfront condo listing. It's not unusual in these calls for a listing agent to tell me that she realizes the asking price is high but the seller insisted on the asking price and it might take some time for him to realize that the market isn't going to deliver his expectation. Other times, like yesterday, the listing agent can't or won't admit to the pricing error. In this case the unit is overpriced by at least $80,000 yet the listing agent, for some reason, is hanging her hat on a number that can't be supported by any comps. Go figure. Unsaleable listings still draw page views on Zillow so she may be able to steer inquiries to someone else's properly priced offering. In that context, any listing at any price is worth having.

Nothing much has changed with our low inventory other than properly priced listings are selling and being replaced by more optimistically priced ones. Condo and townhome inventory is still below 200 existing units in Cocoa Beach and Cape Canaveral yet we still manage to close 12 to 15 every week. School started this week and there are drastically fewer vacationers in town. I think it's safe to say real estate activity will follow that lead and cruise from now through Christmas at a more relaxed pace. Snook season opens in a couple of weeks and the mullet run will follow shortly. Sharpen your hooks and patch the cast net if it needs it.

From an outstanding recent Vice interview with Liam Gallagher. The one below is from a series of questions about various Oasis lyrics:

Interviewer: What about "I ain't good lookin' but I'm someone's child…" [from "D'You Know What I Mean"]? 
Liam: Well, I don't know about that. You can tell he (Noel) wrote that one, can't ya? Even when I sing it I'm going, "Not too sure about that one…"

Friday, August 04, 2017

Second Half Off to a Roaring Start

My driveway and my only means of transportation for the last few weeks.

When I was a kid, school didn't begin until after Labor Day. This year, Cocoa Beach schools start on August 10. It really makes the summer shorter and it has an effect on our real estate market. Those new residents wanting their children to attend school in Cocoa Beach this year should have closed on their Cocoa Beach home by now in order to be a resident by August 8 registration. That probably contributed to the record 18 closed single family homes in the month of July in Cocoa Beach and Cape Canaveral. On a side note; students will have their photos taken at registration so make sure they are wearing a shirt or blouse that complies with the dress code. All details HERE.

In addition to the 18 homes, there were 62 condos and townhomes closed in our two cities in July. That's an impressive number considering that there are only 197 existing condos and townhouses for sale at the moment. Current inventory of single family homes stands at 64.

Lobster season opened this week here in the Bahamas and the results were good, at least for those who had done their pre-scouting and knew where to go. We were on the water before daybreak and had our limit in short order. Same story the next couple of days. By my count, I've spent about a hundred hours submerged since arrival fueled by a diet of mainly conch, fish and lobster. The combo feels healthy. Back on the job in Cocoa Beach shortly.

"My best vacation is somewhere I can hide, somewhere warm and not a lot of people around." __Derek Jeter

"I agree." __LW

Tuesday, July 18, 2017

Running to Stay in Place

The routine summer flatness prompted me to offer a contrast of that lake of an ocean that summer visitors see. The webcam screen grab above was during an epic hurricane swell at the Cocoa Beach Pier years ago. Most visitors have never seen our surf in such form but it does happen and more often than most would think. Regretfully I have no shots of the Halloween swell of 1991 from the Perfect Storm off New England. All my shots of that one are biologically stored and unavailable for publication.

Another year already half gone. Despite the tight inventory of properties for sale in Cocoa Beach and Cape Canaveral, the first half of July has been strong. Forty two  condos and townhouses have gone under contract in the first 14 days of the month, a quarter of those on the market less than two weeks. Activity was spread across all prices with the median at $225,000. During the same two weeks, eight single family homes were successful in getting a contract.

As of this morning there are 69 single family homes on offer in the two cities at prices between $3 MM and $274,900 with a median of $530,000. Inventory of existing condos for sale has declined to another all-time low of 190 total units offered at prices between $1.45 MM and $79,751. At the current sales rate, that is a 64 day supply.

While prices are responding to the tight supply by continuing upward, many of the current listings are overpriced. Whether buying or selling, knowledge of fair current value goes a long way towards securing a contract.

Enjoy the vacation. I am.

"There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat." __William Shakespeare

Sunday, July 09, 2017

Inspection Hijinks

Most residential real estate contracts in our area will contain an inspection and right to cancel period during which the buyer can cancel for any reason with no penalty. This period is designed to allow the buyer time to physically inspect the property and investigate anything else about the property before being bound to honor the contract. Inspections can and do reveal hidden issues serious enough to call for cancellation or renegotiation. The most common hidden issue on beach properties is a rusted, near-death exterior AC compressor unit on the roof. Unless the seller disclosed that the unit was shot or at the end of it's life expectancy it's reasonable for the buyer to ask for a price concession after that discovery. If your agent advises you to make an offer with a plan to renegotiate the price post inspection based on some unknown issue that she hopes is discovered during inspection, she is probably giving you bad advice. Same for a readily observable issue. You can't expect a seller to agree to a price concession off an already agreed upon price for a cracked driveway when the buyer and her agent walked across that same driveway to get to the front door the very first visit. Be reasonable. Concessions do happen but rarely without honest and fair reason. If the seller is holding a backup contract, a concession request might as well be a knock-knock joke.

Sellers, if you know of hidden issues, disclose them up front and negotiate with those issues known while you still have negotiating strength. If you know the rooftop AC is at the end of it's life, disclose it and make that part of the first offer exchange. Waiting until two weeks post contract to negotiate shifts the power to the buyer. There is one exception to this, existence of a backup contract. A seller holding a backup contract has the power to refuse any concessions knowing that there is a second buyer ready to perform if the first walks away. For this reason, backup contracts make sense for sellers as it gives them retained negotiating strength in the event of post-inspection requests. For buyers, I always recommend doing a backup contract as it can easily become the primary contract when the seller, emboldened by the existence of the backup, refuses to concede to the first buyers demands. I've seen a prideful buyer walk away from an otherwise fairly priced contract over a failed concession request.

Fishing has been on fire in the Banana River and in the ocean. Redfish and trout are being caught in good numbers around the Thousand Islands of Cocoa Beach and some big out-of-season snook have been dragged in from the beach and just beyond. Night fishing at the Port has  also productive. Bait of choice for the snook is a live croaker. A few lucky fishermen have landed giant tarpon from kayaks just beyond the surf. This always includes a thrilling Nantucket sleigh ride until these big fish tire. A 100 pound plus silver king from a small kayak is a catch of a lifetime. Further offshore cobia, dolphin, kingfish and a few sailfish are being caught. Get out there and enjoy it if you get a chance. No fishing license required if fishing from a shore.

"We said we'd never fit in when we were really just like them; does rebellion ever make a difference?" __So Long, Astoria, The Ataris

Saturday, June 24, 2017

Watch Your Toes

Sorry for the big gap between posts. I have no good excuse. Call it a summer slowdown, heat exhaustion or a touch of the vapors. Hold on. In 2017 "the vapors" could be construed differently than what my grandmother meant when she used the term. I'm using it in her context. Anyhow, as of this morning the Cocoa Beach MLS is reporting 349 closed condo and townhouse sales so far in 2017 in Cocoa Beach and Cape Canaveral. The actual number is probably a handful more. Tardy listing agents, you know, too busy to update sold listings. Fifty of those sales closed this month, so despite the seemingly slowed market, we are on track for another strong month. To put a little perspective on that number, there are only 199 existing units for sale right now in the two cities. At this rate the entire existing inventory will be gone by October 1.

Of the 50 sold units so far this month only five were east facing, direct ocean units, the traditional bread and butter of our market. As the inventory has dwindled, side ocean view, river units and non-waterfront properties have taken up the slack. Half of the sold units were purchased with cash and half sold in the first 36 days on the market, ten of them in the first week.

There are 63 single family homes for sale this morning at prices between $3 MM and $250,000 with the median over a half million. Nine have closed so far this month.

I like to scan the Weather Channel during cold months for a touch of Floridian schadenfreude but it has been equally entertaining this month. Portland hit 100 this week and in Arizona mailboxes were melting. Thank geography for the ocean breeze which kept things in Cocoa Beach quite pleasant, as usual.

A few big breeder snook have been caught in the surf the last few weeks for those who know the bait and the technique. Catch and release only until September 1 and then 28" minimum and 32" maximum, one per day. Enjoy these great summer days and please don't forget the sunscreen and don't attempt to walk to the ocean without flip flops. The sand will roast the bottom of typical American feet. How bout that Minutemen streetscape? If you haven't been downtown recently, check it out some night. The Minutemen corridor has been transformed and I give the finished product a double thumbs up and two snaps.

"Tortured numbers will confess to anything." __whodidntante