Friday, December 02, 2016

Entering the Home Stretch

As of this morning the Cocoa Beach MLS is showing 52 condos and townhomes sold in Cocoa Beach and Cape Canaveral in the month of November. Just over half were purchased for cash and almost a third were on the market for less than two weeks. The inventory is hovering just above 200 existing units and sales for the year look to come up just shy of last year's record 710 sold units.



At the high end of the range were four oceanfront units at prices between $465,000 and $610,000. Lowest price paid for a unit in an oceanfront building was $170,000 for a ground floor Driftwood Villas 2/2 with 1236 square feet.

Four riverfront 2/2 units with garages in Cocoa Beach closed at prices between $230,000 and $255,500 at Commodore, Beachwalk, Sunset Harbor and Diamond Bay. One lucky buyer scored the most desirable unit at Harbor Isles in Cocoa Beach. The totally remodeled top floor southwest corner 3/2 in the south riverfront building closed for $380,000. The view over the islands from this unit is unequaled in Harbor Isles.

Other river units included a 4th floor Magnolia Bay 3/3 for $435,000, a 3rd floor corner 3/2 at Harbor Club behind the Sunset Grille that went for $395,000 and a 2nd floor corner 3/2 River Bend in south Cocoa Beach that brought $389,900. A 2nd floor south corner 3/2 in the south building at Solana on the River in Cape Canaveral sold for $372,000.

There were two weekly rental oceanfront units sold in November. One was a 2nd floor poolside unit at Cocoa Beach Club that sold for $250,000 and came with a seven year special assessment. Ouch. A 2nd floor direct ocean Boardwalk 2/2 in downtown Cocoa Beach closed for $312,825 with a garage.

A 4th floor direct ocean Stonewood 3/2 in mainly original condition with 1588 square feet sold for $360,000 while a totally remodeled 8th floor 2/2 Sand Dollar floor plan with 1470 square feet closed for $465,000. A rare 7th floor NE corner 3/2 in the "A" building at Royale Towers sold for $500,000 fully furnished. Amazing unobstructed panoramic ocean views from this unit with a wrap balcony. A gorgeous 6th floor totally and beautifully remodeled 3/2 unit at Constellation sold for $585,000 the first day on the market. These upper floor units at Constellation have, in addition to direct ocean views, wide open views from their west balconies across the three mile wide Banana River to south Merritt Island in the distance. Highest price paid in the month was $610,000 for a direct ocean 4th floor SE corner 3/2 Cape Club in Cape Canaveral.

Eleven single family homes and one half-duplex also closed in the month. Lowest price paid for a waterfront single family was $329,900 for a small 3/2 on a canal off Minutemen Cswy. Highest recorded price was $765,000 for a gorgeous totally remodeled 3296 square foot Key West style 5 bedroom, 3 bath on a canal with island views, 2 car garage and pool. Five of the total were purchased with cash and half were on the market less than a week and a half.

The Cocoa Beach Art Show was excellent again this year with a great lineup of musical artists on the big stage at the west end of the show on Minutemen and a ton of great art on display. The spirit of our small town is really captured in these street events with the Thanksgiving show being the best example. A very big thanks is in order for Steve Romano and all the other volunteers who pulled this annual event together after the desertion of the Space Coast Art Festival in 2014. Ironically, that event found themselves without a venue this year while the adolescent Cocoa Beach Art Show carried on in fine form as if it had always been there. Well done, guys.

"It's a black fly in your Chardonnay." __Alanis Morissette

Monday, November 28, 2016

Radio Romance in Cocoa Beach

The Nashville boys killed it once again with an electric set on the big stage at the Cocoa Beach Art Show Friday night and followed up with an acoustic evening at Juice and Java Saturday night.

Sunday, November 20, 2016

Red Light - Green Light

Can someone at the City explain to me why the Holiday Lane traffic light at A1A has a way shorter cycle than the much busier Cocoa Isles light? A1A traffic is repeatedly interrupted night and day for phantom traffic on Holiday. What's up with the light at Minutemen Causeway and Atlantic continuing it's cycle even while Minutemen is closed to traffic on either side? And, why do all of these lights stay on the same cycle through the night when there is minimal traffic entering A1A? Inquiring minds want to know.

A real estate contract is considered executed when all parties have finished signing. After that, the next step is to send the file to the closing agent which in Florida is usually a title company or, sometimes, an attorney's office that is also a title company. The title company then does the title search, co-ordinates with the buyer's lender if a mortgage is involved, determines tax liabilities and gets an estoppel letter from the association if the property is a condo. They then pull all this together and generate a settlement statement with exact numbers in enough time for the buyers to wire their funds for arrival by day of closing and then have all parties sign their respective documents (couriered or emailed to parties who will not be attending actual closing), disburse funds after closing and record the relevant documents. It's a complicated and under-appreciated job. The majority of closers I work with are legit rock stars at the process. I often think of them when I'm in one of those closings that have run past an hour and the closer is slowly reading every document before sliding it over for signatures. I see it like paper route math. As a paper boy if I've got 100 papers to deliver and can throw four a minute from my speeding bike, I can do my route in 25 minutes. Slow my pace down by just 21 seconds per paper or stop for  a couple of short discussions with customers and that same route takes an hour. A closer who can only do one signature page per minute is going to take at least an hour to do a 60 page closing. There are stars who can do a sixty page closing in 15 minutes. You know who you are and I appreciate you more than I can express.

Title insurance rates tend to be very close among the different companies and government charges are identical but the settlement and other fees paid to the title company can vary by several hundred dollars. In my experience, the slower and less efficient the title company, the higher these additional fees. Makes sense. A closer who can only close two or three deals a day needs to charge more to make up for inefficiency.

In Florida the seller typically selects the title company since they are the ones paying (usually) for the buyer's owner's policy. If the seller doesn't have a preference, their listing agent will suggest a title company that's, hopefully, conveniently located and good at what they do. Sometimes they are neither. I wish it were different because the difference in closing agent can be the difference in whether a transaction closes on time or actually closes at all. Since the buyer has very little influence in the selection I would encourage listing agents to recommend title companies that are good at what they do and to please use one somewhat close to the property and/or principals. It is a disservice to the seller and buyer of a Cocoa Beach condo when the listing agent selects a title company in Palm Bay because it's convenient to her office. Likewise for continuing to use a company that wastes everyone's time with closings that last way too long. I'm thinking specifically about a closing last month attended by nine people that took an hour and a half for no good reason. There were times when I expected someone to poke the closer to see if she was still awake.


As expected, mortgage rates rose sharply this past week as the bond market sold off. Freddie Mac's Thursday mortgage rate survey showed the nationwide average rate for a 30 year fixed rate mortgage at 3.94%,  half a percentage point higher than in early October and a .37% rise in one week. We began 2016 with rates at 3.97%.

Cocoa Beach Art Show this coming weekend. The live music lineup is stellar this year. Things kick off Black Friday at 5:30 with Nashville's Radio Romance on the big stage. We get to see these boys a few times a year at Juice and Java and it'll be a treat to see them on the big stage again. There's a good chance we'll be looking back one day saying "I remember seeing those guys before they hit the big time."


"Me, I won't be wearin' nothin' that I can't get wet."  ___Eli Young Band

Monday, November 14, 2016

A Couple of Shades of Grey

With my older and more frequently faulty memory I feel the need to write things down lest they become lost. Allow me to ramble about whatever is passing between my ears this beautiful November morning in Cocoa Beach. Last Saturday morning's sunrise from 1st St. South above.

Directions to a Cape Canaveral condo listing; east on 528, exit Terminal B Cruise, bear left on George King Blvd., right on North Atlantic and ... Apparently this listing agent from Merritt Island is expecting all showings to be coming from non-beachside agents along the Beachline corridor inland. Any beachside agent not familiar with the complex will have to rely on Google maps or their GPS to find and show it.

I called a listing agent last Thursday for showing instructions to her Cocoa Beach listing. No answer so I left a voice message and followed up with an email and then called her office. Voicemail answered with "If you are a seller dial 101", "If you are a buyer dial 102", "If you are a renter dial 103",  "If you'd like to speak to John Adams dial 104",  "If you'd like to speak to Barbara Anderson dial 105" and on and on. [names changed] I waded through about ten agents' names before conceding defeat and hanging up. This type of voice mail is not uncommon among area brokerages. It is an unnecessary barrier between a property for sale and those trying to show it. Buyer's agents juggling multiple appointments may have to exclude listings with this much friction to showing. The listing agent did respond to my email about six hours later saying if we could wait until Tuesday, we could see it. We couldn't. It's been on the market for 78 days and has one MLS photo. It's of the outside of the building. The listing description is 21 words long. Her office is in another city. I hope the seller is getting a substantial listing discount for this sub-par performance.

Longtime readers can skip this next paragraph. It's been repeated ad nauseam apparently to no avail. I continue to have listing agents request that the escrow deposit be held at the seller's title company. I understand why your broker doesn't maintain an escrow account. It's a royal pain and comes with a lot of liability and oversight. Life is much easier when that responsibility is handed off to the title companies. Guess what? The only person to benefit from that policy is the broker. It's in both the buyer's and seller's best interest that the escrow deposit be held in a real estate broker's escrow account and NEVER the title company's. Stop endangering your clients with this unnecessary risk. You should be happy that my company maintains an escrow account and is willing to do everyone a favor by holding the buyer's deposit there. Go back to real estate school if you don't understand why.

How about the practice of withdrawing and relisting a property to reset the "Days on Market" clock? Legal? Yes. Ethical? Maybe. Knowingly deceptive? Absolutely. It actually does get a stale listing back on everyone's hotsheet and on auto-emails from the MLS so it can be an effective tactic. It's sort of like telling a little lie for the greater good. Shades of grey.

There are 21 "waterfront" condos for sale today in Cocoa Beach and Cape Canaveral. A person is able to actually see the water from eight of them. Four of them are over a half mile from the water. A darker shade of grey.

Just how tight is the inventory? There are 211 existing condos and townhomes for sale in Cocoa Beach and Cape Canaveral today. More than that have closed since July 15 this year. There are 42 single family homes for sale, the same number that have closed since August 1.

The rate on 30 year US Treasury bonds Monday morning one week ago was 2.60%. One week and a presidential election since and the rate this morning looks to open at 3.04%. Freddie Mac publishes it's weekly mortgage rate survey on Thursdays so most of us won't see the actual impact on mortgage rates until next Thursday. It's probably safe to expect a decent bump upwards. Before anyone panics, for perspective, it is right where it was exactly one year ago.

It was 68 degrees and dead calm this morning at sunrise as the super moon slipped over the western shore of the Banana River. The high today, November 14, in Cocoa Beach is forecast to be 78 with a light NW breeze. The surf is tiny but there is one optimistic guy out at the Pier right now (pictured above). The water temp in the mid-70s is higher than the air temp.

The Cocoa Beach Art Festival is less than two weeks away. Get the dogs groomed and the kids washed. It will be a good time as always. I hope to see many of you there.

“The last refuge of the insomniac is a sense of superiority to the sleeping world.” __________Leonard Cohen, may he rest in peace.

Thursday, November 10, 2016

Condos, Traffic, Turtles, Betrayal and Art

Thanks to Jim F. for the south Cocoa Beach sunrise photo
Somehow in a landscape of sparse resources my tribe has been able to find sustenance. Diligence has paid off and we have been able to pick off several excellent beach properties in the last month. Inventory of condos and townhomes in Cocoa Beach and Cape Canaveral has been in a ridiculously low and shrinking trend for the entirety of 2016. We have not seen over 300 total units for sale since January of 2014 and by fall this year we were threatening to slip below 200 total existing units for sale. Overlay a few criteria on that number and the decent possibilities for some prospective buyers can quickly hit single digits.

Looking for a direct ocean unit in Cocoa Beach or Cape Canaveral? The MLS reveals 38 total existing units for sale at the moment. Budget of less than $500,000? Eliminate 20 of the total. Must have at least three bedrooms? Now we're looking at six possible units, two of them ground floor. How about the buyer looking for direct ocean with at least two bedrooms and two baths with a budget of $300,000? The MLS comes up with three hits but one is not actually east facing (listing agent dishonestly listed as "direct"), another is ground floor and the last is "direct" if you consider a distant horizon view over the pool "direct". Speaking of listing agent dishonesty, entering south or north facing units as "direct" is, I suppose, an attempt to get more showings with the thought that a buyer will decide that a south view is good enough in spite of having been deceived. Marketing and honesty are often at odds.

Those of you with similar criteria need to remember this when you find that awesome new listing  of a "direct" 2/2 for $250,000. I can tell you without looking that the listing agent exercised some level of poetic license when entering her $250K "direct" listing in the MLS. Ever wonder why so many listing agents' assistants are so muscular? It's so they can hang onto the boss while she's hanging off the south facing balcony with a telephoto lens craning left to get her shot of the "direct" view for the listing. It's not so difficult for those agents who describe the west building at Conquistador as direct. They only have to zoom over Ocean Beach Boulevard below separating the building from the beach to get a clean "direct" view shot of the distant ocean. Direct indeed.

In the month of October 41 condos and townhomes closed in our two cities. During the same time 14 single family homes closed. Highest price for a home was $399,000 for a beautiful two year old 3 bedroom 2.5 bath with 2219 square feet on Seminole Lane. Lowest price paid was $179,900 for a bank-owned 3/2 handyman special on Java Rd. It needed everything.

Closed condos included two more at the just-completed Cocoa Cabanas oceanfront in south Cocoa Beach. They went for $925,000 and $865,000. Both were 3/3.5 corner units with 2580 square feet and two garage spots. Prime oceanfront units with unobstructed views that are either new or totally and nicely remodeled continue to bring $300 a foot and higher. Despite the hurdles associated with condo loans half of the condo buyers in October used a mortgage to finance their purchase. A third of the closed units were listed for ten days or less, another persistent trend directly related to the super low inventory.

The strong onshore winds since the hurricane have been devastating for late season hatchling turtles. The wall of whitewater is virtually impossible for a freshly hatched turtle to punch through and hundreds of them have been found near death on the shoreline after swimming until exhaustion to try to get through the surf. Every surfer can identify with this. I can't imagine my first paddle-out being in quadruple overhead onshore slop. People finding these little guys have been dropping them off at Lori Wilson Park and other designated drop-off spots where they are collected and nursed back to health before being dropped off from a boat beyond the death zone for a second chance. Surfers in the southern end of town who've been jonesing for a good day were rewarded yesterday afternoon when the wind died down before sunset and the big, long period north swell cleaned up with smooth head-high plus lefts peeling down the beach.

In what can only be described as a cluster of royal proportions, the pain in the butt that is the Minutemen Causeway streetscape nightmare project with it's associated detours has been joined by the A1A resurfacing project topped off with the A1A sidewalk project further south. Traffic is worse than any Easter weekend in history and it's every day. The City has issued threats that they will be finished with the steetscape between Orlando and Brevard soon but they've fooled us before. Those who haven't heard might be surprised that the Space Coast Art Festival which turned it's back on Cocoa Beach for a tasty venue change at the Port finds itself without a venue this year and a whole bunch of pissed-off artists. It may never recover. On the bright side, the Cocoa Beach Art Festival which quickly filled the gap last year after the desertion of the SCAF will be continuing the tradition again this Thanksgiving weekend in downtown Cocoa Beach. Displays will be shifted around on Brevard Ave. to accommodate the afore mentioned streetscape nightmare. I look forward to seeing many of you there. Radio Romance will be hitting the big stage again this year.

"We must accept finite disappointment but never lose infinite hope."  __Martin Luther King, Jr.

Sunday, November 06, 2016

When There Are No Comps

How much is that condo or house worth? The easy answer is whatever someone is willing to pay but in the real world it's not usually so simple. It's a rare day that I'm not pouring over recent Cocoa Beach and Cape Canaveral property sales to try to come up with fair current value for an unsold property. For properties with very similar, recently closed comparable sales (comps) the process can be pretty straightforward with a high level of confidence in the conclusion. Much of the time there are no reasonably similar comps and I or an appraiser or a prospective seller or buyer are forced to adjust for differences in the most closely similar sold comps.

My usual starting point is square footage. I will scan recent (no more than six months old) sales with similar characteristics and then filter for the most similar. I try to keep square footage as close as possible to my subject property as dollars per square footage tend to trend with unit size, higher for smaller units and vice versa. If a 3rd floor direct ocean unit with 1200 square feet in mainly original 1985 condition sold last month for $250 per square foot then another 1300 square foot similar unit above the ground floor in a similar building should be worth close to the same $/sf. While both may be in original condition, one may have a new AC system or private garage rather than a designated space under the building and I'll have to SWAG a number for these differences to arrive at my number. If it's a garage versus an open spot it's easy to estimate value for the garage. Same for a new AC system or new floors or appliances.

And then there are those differences that are more difficult to quantify. Without recent comps how much more is a corner worth than an interior unit in the same building? How much more is a 4th floor unit worth over an identical 2nd floor unit? What is the difference in value of corner units in a building with a close building on one side and open space on the other? When faced with these qualities without recent comps then we are back to the easy answer; whatever someone will pay. When a reasonable, informed seller who wants to sell meets a reasonable, informed (and capable) buyer who wants to buy that property, a deal will happen. Many fair deals don't happen because one or both parties weren't reasonable or informed. or just had a difference of opinion on value. When faced with a specific quality or shortcoming that is missing in the comps the parties are forced to refocus on the big picture and make a judgement call on the unknown quantity. The guy who "never pays asking price for anything" may miss out on a steal and the guy who "won't accept anything less than what I paid" may lose even more money waiting for a buyer who'll pay his number.

If I'm selling and a prospective buyer thinks my corner view is worth $10,000 less than I do I have three choices if I want to sell; stand firm with my opinion of value, yield to his opinion or try to negotiate a middle ground. The buyer has the same three choices and the advantage of being in a rising market. No one wants to overpay for a property but, with tight inventory, knowingly overpaying a percentage point or two stands a good chance of being the more prudent choice, especially for rare or unique properties.

Our takeaway: Property value, no matter who is assigning it, is only an opinion of value. Small differences in that opinion should not stand in the way of a sale happening between two parties who want to do a deal. If the goal is a transaction, flexibility in one's opinion is a powerful tool.

It was great seeing so many Cocoa Beach folks last night at the grand opening of The Studios of Cocoa Beach. The turnout was overwhelming and the collection of art on display was beautiful. If you missed it I encourage a visit to see the brightest new addition to the downtown scene. Open daily. As I walked to my car at some point during the night I could hear live music drifting out of doorways from at least six different places in a one block area with an overlay sound of the surf in the background. Our downtown may be small but it is diverse and concentrated and I love it.

"We meet aliens every day who have something to give us. They come in the form of people with different opinions."  __William Shatner

Sunday, October 30, 2016

Happenings Downtown Cocoa Beach

It's good to see new things happening in downtown Cocoa Beach ahead of the completion of the Minutemen Causeway streetscape project. It's been a long haul so far but I believe the end result will have been worth the inconvenience of the detours and closed roads. Speaking of, please support those businesses across from City Hall while their section of Minutemen is closed. They are all accessible from the alley (Wayne Coombs Way) by Roberto's Cuban Cafe connecting Orlando and Brevard Avenues.

New arrivals to downtown include The Thirsty Oyster raw bar on the corner of Atlantic and Minutemen in the old shell shop location. The Bula Kava Bar has opened on Orlando Ave. between North 1st and 2nd streets and, Grand Opening next weekend, the Studios of Cocoa Beach next door to Heidi's Jazz Club on Minutemen between Orlando and Atlantic Avenues.

The Studios are a co-operative, non-profit venture run by volunteers and the artists who display there. The idea was conceived by Peter Hain and Tony Sasso who enlisted a group of hard-working volunteers to join them to make the dream a reality. At present there are over 25 artists displaying a diverse mix of works in assorted mediums. The Studios are open to the public now with the big Grand Opening celebration next weekend, November 5. For those interested in displaying, teaching, volunteering or sponsoring please contact them through their website Studios of Cocoa Beach There will be an ongoing roster of classes and the art lineup will be ever-changing. Please stop by and support the arts in our community and visit the other new arrivals to the downtown scene while you're there.

“Art washes away from the soul the dust of everyday life.” __Pablo Picasso

Saturday, October 15, 2016

After the Storm

One week ago we were breathing a sigh of relief having just side-stepped Hurricane Matthew's rush northward. Our northern neighbors were not so lucky but for the most part Cocoa Beach and Cape Canaveral suffered minimal damage. The main impact here was widespread landscape damage, scattered roof damage primarily on older buildings, blown down signs, toppled fences and downed power lines. West facing shorelines on the open Banana River took a hard hit from the west winds on the back side of the storm with some severe dock damage in south Cocoa Beach. Some sections of Cocoa Beach were without power for as much as five days but most had power restored within the first couple of days post Matthew. In south Cocoa Beach most buildings never did lose power. Beach erosion was very minimal although we've had some impact from the hard onshores and high surf of the week following the storm. All in all, another blustery week at the beach. The plastic yardbirds above successfully rode out the storm hunkered down behind the Spanish bayonets and dune vegetation which didn't fare as well.

Real estate sales last month were strong coming one unit shy (65 closed units) of setting a record as the busiest September ever recorded in Cocoa Beach and Cape Canaveral for condo sales. Six oceanfront units commanded selling prices over $300 per square foot. All of those were either new or completed remodeled and several included furnishings at that price. The lowest price per square foot paid for a direct ocean unit above the ground floor was $247/sf for a 3rd floor mildly updated 1/1 Royale Towers with a garage. In a departure from the recent trend towards more buyers using mortgages, two thirds of the condo sales in September were cash deals.

Another trend I'm seeing is overpricing at initial listing. It makes sense for a seller who is in no hurry to take a chance at landing a lottery winner or frustrated buyer willing to pay more than fair current value. There are two sides to this. In a rising market a reasonable premium to current value will be overtaken with time. However, unless the unit is a unique floor plan or rarely offered type, a buyer can just wait for another acceptable unit at a better price. For a one-of-a-kind or hard to find floor plan, it may make sense to pay a reasonable premium. By the time another unit is offered, prices may have overtaken what the premium would have been. As always, homework pays off.

Knowing that this dynamic is in play makes it more prudent than ever for buyers to know exactly what property criteria matter to them AND how to approximate current value. Just hoping to get X% off asking price is not a good plan. When looking at comps be aware that the sales prices that are reported in the MLS and the Property Appraiser's site don't always include all sales details. Be especially doubtful of too-good-to-be-true prices of non-MLS sales prices at the PA's site. It is not uncommon for private parties to exchange a portion of the sales price off the record to reduce tax implications. One or two sales whether MLS or not do not reveal enough information to accurately value a comparable property unless one can be certain that all the details of the sales are known. For instance; the listing agent often doesn't indicate when closing a listing whether or not the furnishings were included in the sales price or that the seller was granted a free three month stay next snowbird season.

Our takeaway: putting an exact current market value on a property is not possible. We can only approximate. Knowing what I want in a property may be just as important as nailing down exact current value. If the perfect unit becomes available I need to be able to recognize that and make an informed decision about what I'm willing to pay to get that unit. At least some of those 65 people who closed in September went through this process successfully.

Good hunting out there. Those looking for a condo or townhome in our two cites have 207 existing units to choose from today. Less than half of those are in oceanfront buildings. Many are way overpriced. You'll increase your odds if you do your homework and find an agent you can trust who knows this market.

"Fear of the storm is usually worse than the storm itself."  ___Gail Lynne Goodwin