Thursday, July 21, 2016

It's a Mango Year

I dropped off a few towels yesterday to guests from New York who were visiting south Cocoa Beach for the first time. I asked how their stay had been. They said that when they walked out onto the beach the first morning they were concerned that no one else was there. Was something going on they should know about?  By the second morning they realized that very few people on the beach was a normal thing in south Cocoa Beach. Their second comment was that the people in Cocoa Beach were, as a group, the friendliest they had ever encountered in Florida. I'm thinking we'll see them again.

Sales in Cocoa Beach and Cape Canaveral continue at a brisk pace. The 11 year record breaking number of sales in May and June despite record low inventory is evidence of the extraordinary demand for residential properties that we are enjoying. I see no evidence that this has changed. So far 34 units have closed and another 39 have gone under contract since the month began. There are only 237 condos and townhomes for sale at the moment in our two cities and another 25 in planned buildings. We closed more than a third of that existing unit number last month alone.

Of the condo and townhome sales closed so far in July the average selling price was 95% of the last asking price. That "last asking price"qualifier is important. Of the 35% of sales that were on the market less than a month, none had a price drop before accepting a contract. That means they were priced right when listed. Of those who started high and later reduced their asking price, average time on market was 83 days. Sellers take note.

It seems everyone in town is walking around with bulging grocery bags. In most cases they are filled with mangoes like the one pictured. This is one of those years when every mango tree is loaded down and the harvest is so excessive that those with trees are giving mangoes to everyone they know. The locals are forced to eat excessive amounts of mangoes every day or live with the guilt that they are going to waste. We can only make so much salsa and chutney and freezer space eventually runs out. It's a tough problem but we'll see it through. By the way, that mango pictured is as tasty as it is pretty. Juicy, not stringy and as sweet as ice cream.

“If it could only be like this always – always summer, always alone, the fruit always ripe and Aloysius in a good temper…”  __Evelyn Waugh, Brideshead Revisited

Wednesday, July 06, 2016

2016 - First Half Recap

We are squarely in the daily afternoon thunderstorm season with dark fronts like the one pictured a fairly common occurrence. Independence Day fireworks are no match for the fireworks that usually accompany these afternoon storms.

The first half of 2016 ended on a strong note with a record month of property sales in Cocoa Beach and Cape Canaveral. June 2016 was the second busiest month for closed condo and townhouse units since the peak of the boom in 2005 with 77 units recorded as closed so far in the Cocoa Beach MLS. As always, that number could increase as tardy listing agents get around to closing out their sold listings. For perspective, that is 29% of the entire inventory sold in one month. In addition, during the month there were 14 closed single family homes and a single half duplex. A third of the homes sold for more than a half million dollars with two river houses closing above the million dollar mark.

Condo sales were concentrated in the lower price ranges with two thirds of the 77 sales under $250,000. Only three units sold for a half million or more, the highest, one of the three big 4/4 Magnolia Bay units that closed for $565,000. Mortgage use for condo purchases continues to increase with just under half of the condo buyers in June using a mortgage for the purchase.

There were 81 closed single family homes and half duplexes from January 1 through the end of June. There are 55 currently for sale. Buyers who want a single family home on the water in Cocoa Beach have 31 to consider at prices from $2.95 MM for a brand new direct ocean 2 story with 4667 square feet to a nicely remodeled 55 year old 3/2 canal home with 1520 square feet asking $399,500. Almost two thirds of them have been for sale for more than 100 days so we can assume some resistance to the asking prices considering the number of buyers actively looking to purchase. Likewise over half of the condo listings have been on the market over 100 days. Same assumption about pricing can be made for most of these.

About "days on the market": This number can be manipulated by an ambitious listing agent so it can't always be trusted. Your buyer's agent can peek behind the curtain for the true listing history. A listing can be withdrawn and relisted to reset the days on market clock. Same thing can happen with an expiration and relisting. While we're on the subject of accuracy, I get lots of calls and emails from out-of-town buyers who have spotted a waterfront condo unit at a very attractive price on the MLS or one of the other big real estate websites. Those too-good-to-be-true prices are almost always misrepresented properties. While Villages of Seaport is technically an oceanfront community and a listing agent can code a listing there as "oceanfront" they never mention that the cute $115,000 two bedroom townhouse listed as "oceanfront" is actually a half mile from the beach. Likewise a smoking deal on an "oceanfront" Conquistador usually turns out to actually be in the non-waterfront Conquistador building on the west side of Ocean Beach Blvd.

Turtle nesting activity in south Cocoa Beach has been strong with a short walk on the beach most any morning revealing several new nests.

“Arguing with anonymous strangers on the Internet is a sucker's game because they almost always turn out to be—or to be indistinguishable from—self-righteous sixteen-year-olds possessing infinite amounts of free time.”  __Neal Stephenson

Monday, June 27, 2016

Approaching Halftime

Three days and we'll be halfway through another year. At the mid-point of 2016 there are 245 existing condo and townhouse units for sale in Cocoa Beach and Cape Canaveral and another 26 in buildings yet to break ground according to the Cocoa Beach MLS. At the same time there are 63 single family homes for sale. For perspective, ten years ago there were almost 1100 MLS-listed condos for sale in our two cities.

Despite these tight inventory levels, we are continuing to see strong numbers of sales. Since the first of the year 340 condo and townhouse units and 77 single family homes and half duplexes have closed in the two cities. In the month of June we've already closed 57 condo units with a median price of $211,000. Closed direct oceanfront units above the ground floor this month have sold for between $231and $304 per square foot. Nice direct river units have been closing in a range between $155 and $200 a foot. Thirteen of the 53 new condo listings this month are already under contract.

Since June 1, eleven single family homes have closed at prices between $255,000 for a cute little 1042 square foot home one block from the ocean south of downtown Cocoa Beach to $1.1 MM for a gorgeous 14 year old Key West style open river home with 3985 square feet north of 520.

Mortgage rates are close to their all-time low with the national average 30 year rate at 3.56% according to Freddie Mac's weekly survey last Thursday. Despite these historical low rates, over a third of the homes and over half of the condos closed so far this month were purchased with cash. Buyers need to keep this in mind. For a seller, cash is almost always preferable to an offer contingent upon a mortgage. No underwriter, no appraisal (usually) and no delays waiting on loan approval. I'm aware of three appraisals that came in under the contract price last week. Three things can happen when a property appraises below the contract price. 1) the seller can drop the price to the appraisal number and move forward towards closing 2) the buyer can make up the difference by bringing more money to close or 3) the contract falls apart if the parties can't find agreeable middle ground. Far better for a seller to have a cash contract with no appraisal contingency and the accompanying concerns.

"I got my own way of talking, but everything gets done
With a southern accent, where I come from."  __Tom Petty

Saturday, June 11, 2016

2000 Sq.Ft...More or Less

There was an interesting comment from an anonymous reader directed at my  last post. It concerned the condo that I mentioned selling for $318 per square foot. The buyer actually paid $343 per square foot  because of an incorrect MLS listing but may not know that. This particular unit has been listed and relisted many times over the years. Looking back at the previous expired listings I can find the advertised living square footage as 2011, 2170 or 2400 square feet, all from the same listing broker. The living square footage according to the tax appraiser is 2011 with  total square footage at 2400 including balconies. I have no idea where the 2170 size came from. Considering all the errors in previous listings I think it's probably innocent despite the suspicious fact that the errors have always been in the seller's favor.

There are Cocoa Beach condo listings on Zillow right now with inflated sizes that I suspect are outright attempts at deception by the owners. I would advise all buyers and agents to begin checking the advertised size against the tax records. A 159 square foot error doesn't sound like much but at $318 per square foot we're talking over $50,000.

Another relatively common error on the MLS is condo fees. Often an agent or her assistant entering a new listing will look at previous listings for the monthly condo fee amount if they don't already know it. If wrong, the error may go unnoticed. Same thing happens with long-listed units. The monthly fees may have changed since the original listing without getting updated. As always, it is up to a buyer and her agent to verify the data being presented to them. The MLS is only as good as the data being input. How about a FSBO? Same deal except probably even more important to question everything. Ultimately, it's a buyer's responsibility to verify everything.

There were 72 condo units closed in the month of May in Cocoa Beach and Cape Canaveral. A third of those sold in two weeks or less. Slightly more than half sold for cash. Inventory this morning is at 277 units with 25 of those in buildings yet to break ground. Those looking for a good, fairly-priced property don't have a lot to choose from. We are not seeing the same flow of new listings coming on the market that we were seeing earlier this year which is typical. For those hoping to purchase, this means, as always, know what you're looking for, know what a fair price range is and be prepared to offer quickly when you find it.

I witnessed another crazy closing yesterday. The buyer's lender botched the closing disclosure multiple times with inaccurate numbers and finally got it right just as everyone involved was ready to walk away from the deal. Buyers choose your lender carefully. Experience with the local market and property type is worth far more than the lowest promised rate. The guy in the call center in Texas who promises you a rate three basis points less than the local guy may have no idea what his underwriter is going to require for a Florida condo loan and may find out too late to close on time or at all. Rate means nothing if he can't close the deal.

After a week of daily rain, you can almost watch the grass and plants growing. The annoying sound of Florida's favorite tools, the leaf blower and weed eater, are rarely absent during daylight hours this time of year.

"To be one, to be united is a great thing. But to respect the right to be different is maybe even greater."  ___Bono

Tuesday, May 24, 2016

Seven Days in May

I thought a snapshot of the last seven days in the Cocoa Beach and Cape Canaveral real estate market might be interesting. I was expecting to find less activity than I did. In the seven days since last Wednesday, May 18, twenty nine residential properties have gone under contract in our two cities, five of those single family homes. Ten of those properties were on the market less than two weeks.

At the other end of the spectrum, one of the condo units received an accepted contract after being on the market for eight years with eleven price changes. The asking price when contract was accepted was $165,900. At one time during the eight years they were asking $290,000. This is a classic example of denial being dragged kicking and screaming into acceptance of reality. Price it right and it will sell. Some sellers take longer than others to accept that.

During the same seven days, twenty properties closed, nine of those for cash. Prices of the closed properties ranged from $69,000 for a one bedroom Marlin Apartments unit to $785,000 for a beautiful open water single family home in Cocoa Beach. One of the closed condos was another long-listed unit that has been on and off the market since 2008. It was listed for $1,195,000 in 2008 with gradually reducing prices until it closed fully furnished for $690,000 last week. At $318 per square foot, that should be a reality check for the other units in that building asking far above that number but I'm guessing it won't.

I attended one of the more memorable and lengthy closings of my career last week. The closing agent was slower than most and took about twenty to thirty minutes to read through the settlement statement and loan documents while the buyers signed. Sellers had signed earlier and weren't present. When she finally finished I questioned whether the May condo fee had been paid by the sellers since there wasn't a credit on the settlement statement. She responded that she didn't know and would have to find out. First time for everything but shocking nonetheless especially considering that a condo's management must complete an estoppel for every sale showing what a unit owes the association if anything on day of closing.

She left the room closing the door and we discussed what the difference would be. If sellers had not paid May's fee they would owe the buyers $288. If the sellers had paid May's fee, the buyers would owe them a refund of $182 for the remaining twelve days of May. Twenty minutes later the closing agent returned and said that she had forgotten to add the condo fee to the statement and that the buyers owed $16 to the sellers. Huh? The buyers gave her a $20 bill and she disappeared again to get change. Another twenty minutes passed without a peep so I went roaming the halls of the attorney's office and found her in a back room. She said that the lender was preparing a new disclosure reflecting the changed amount. I returned to the closing room and when she came in a little later with the new disclosure and the $4 change I asked how she came up with $16 for 12 days of a $470 fee. She responded with "Can we just let it go and sign this as it is?" She admitted that she had made a $1500 error on an earlier closing that day. We exited the office two hours and ten minutes later for a closing that should have taken less than thirty minutes and that was completed with an acknowledged error on the statement.

Our takeaway: Buyers, sellers and agents (when you are allowed a copy) please read the settlement statement carefully. Mistakes happen. Sellers agents I would ask that you choose the title company/closing agent carefully. Most are professional and pleasant but there are a few out there that are difficult and can make closings feel like torture. Another story next post involving two title companies (one good, one bad) and another difficult closing.

“Never interrupt your enemy when he is making a mistake.” __NapolĂ©on Bonaparte

Saturday, May 14, 2016

Sell in May

Beautiful palm tree bloom at the Cocoa Beach Country Club.

Property sales in April in Cocoa Beach and Cape Canaveral, while brisk, declined year over year for the fifth consecutive month. The record low inventory levels we hit last summer were impacting closed sales numbers by year's end. We have since recovered somewhat in number of properties for sale but still remain well below historic levels. There are 296 condos and townhomes and 71 single family homes for sale this morning in both cities. As I've mentioned before, many of those properties are so overpriced as to be "not really for sale".

In the month of April there were 16 closed sales of single family homes. Median price was $300,000 with all of the upper half waterfront. There were 66 closed condos and townhomes with a median price of $186,000. Half were cash deals. Only two condos closed for more than $300 per square foot. One was a luxurious fully furnished direct ocean Meridian 3/2 and the other was an 844 sf Chateau that squeezed over the $300 mark because of the math of the smaller than average size. Most direct ocean units above the ground floor closed between $235 and $300 per square foot. That fact has not settled into many seller's reality. Hopeful sellers of direct ocean units take note: Units commanding above $300 have been in exceptional condition and usually fully furnished or way below average size as in the case of the Chateau unit. There are 25 units currently asking over $300 per square foot, four of them over $400/sf. In my opinion, only six of the 25 are worth above the magic $300 number and none of them over $400.

Unless we have a strong second half of the month, May sales look to fall well below last year's 71 units. Prices, however, continue their slow upward trajectory in spite of the slowing number of sales. Those looking to buy, as always, need to be able to distinguish those properties that are priced within striking distance of fair value. It is possible to waste a lot of time and energy looking at nice but overpriced property.

The weather in Cocoa Beach the last few weeks has been about as good as it gets. Light winds, moderate temperatures, warm ocean water and a lingering small longboard swell. Add the absence of crowds and it is everything one expects in a small Florida beach town. Today's forecast; sunny with a high of 80 and light variable winds. Superboat races tomorrow offshore Cocoa Beach between the Pier and Lorrie Wilson Park.

"You know what the secret to weight loss is? Don't eat much." ___Simon Cowell

Friday, April 29, 2016

Downtown Cocoa Beach Pub & Restaurant Crawl

I'm happy to report that there is plenty of life in the Banana River contrary to some recent sensationalist social and mainstream media reports. The stone crab claws pictured came from the Banana River this week along with many dozens more not pictured. There appears to be no trace left in late April of the brown tide that killed off thousands of fish in March. This doesn't mean that we shouldn't continue our efforts to reduce our nutrient rich runoff that triggers the algae blooms. Our river is special and beautiful and as we found out, delicate. Despite the brown tide event, it has produced quite a few tasty meals for me this week. I like mine dipped in a little honey-mustard sauce.

Other than Post Office boxes, all of Cocoa Beach including areas north and south of the city limits  share one solitary zip code. We are all 32931 but there can be quite a bit of difference in specific areas. I often talk about this. There is the one that attracts the bulk of the tourists that is centered on the Pier and Ron Jons area and seems to be most outsiders' image of Cocoa Beach. The other Cocoa Beach, the one that I love, begins at the Kelly Slater statue at the fork in the road at 4th St. North as one heads south.

Despite the small size of downtown Cocoa Beach, there is quite a bit there. How many restaurants and bars are there in downtown Cocoa Beach? I used to say more than three dozen but thought I'd take the time to walk the four block area of downtown and make a list. Turns out there are more than I thought. I have provided links to everyone's websites or lacking that a link to their Yelp review page. If one finds themselves thirsty, hungry or wanting to hear live music in downtown Cocoa Beach, there is no good excuse to do without.

Exiting my office just north of 1st St. North on Brevard Ave. I walk a half block north past Jonathan's Pub and The Elks Lodge to N. 2nd St. and east around the corner. On the corner of Orlando Ave. is Jazzy's Mainely Lobster seafood market and restaurant. Taking the sidewalk north up Orlando, immediately next door is The Pig and Whistle British Pub . A half block further north and we're at Burger Country. Right across the street is Slow and Low BBQ and just beyond in the same block is the Surfers Pub and Bruno's Pizzeria. Since I'm keeping this to just the downtown area I walk one block east to Barrier Jacks Restaurant and then turn back south. First I come to the Cocoa Beach Brewing Company and right next door, Pineapple Point bar and restaurant. A couple of buildings down is The Mango Tree fine dining restaurant. I cross the street now to the ocean side and continue south past 1st St. North and first up is The New Habit, sandwiches and ice cream. Around the corner on Minutemen to the beach and we have everyone's favorite dive bar and music venue, The Beach Shack on the ocean and right across the way, also on the ocean is Coconuts, restaurant and bar. Immediately west of Coconuts is one building housing Hunker Down Bar, Fat Kahunas Restaurant, Cafe Playa Cuban Restaurant and shortly to open, The Thirsty Oyster oyster bar. Just across Atlantic Ave. and just south of the currently closed old Surf Restaurant is Venice at Cocoa Beach, bar and restaurant and the Subway sandwich shop. In the first block of Minutemen west of the ocean we have Yen Yens Chinese restaurant, Heidi's Jazz Club, The Heidelburg RestaurantMinutemen Tavern and the Cocoa Beach VFW. Just around the corner across from City Hall on Orlando Ave. is Twin Finnegans Irish Pub. Continuing west on Minutemen on the north side across the street from City Hall we begin with Cocoa Beach Thai and Sushi on the corner and then Casablanca bar. Next door in the Mai Tiki Market we find The Fat Donkey ice cream and desserts, The Tiny Turtle Caribbean Fusion restaurant and Wahoo Coffee Company. Across the alley behind Mai Tiki is Coastal Produce, produce market and deli and across Brevard Ave. is Jenna's Breezeway  restaurant. Walking back east up the alley (Wayne Coombs Way) behind Mai Tiki Market we get to Slingers Cocoa Beach Chicago-style hot dog joint on the right and Roberto's Little Havana Cuban Restaurant on the left. Across Orlando Ave. is Oasis Shaved Ice and The Florida Key Lime Pie Company. Heading north towards N. 1st St. we have the Surfinista, smoothies. coffee and health food and right across Orlando Ave. is Juice and Java Cafe. Around the corner on N. 1st St. behind the Surfinista is The Green Room Cafe health food restaurant. Continuing north on Orlando towards N. 2nd St. we pass Simply Delicious Cafe & Bakery and Surfer Joe's Tropical Ice before passing  Cocoa Beach Sports Pub with the attached Mexican grill. At 2nd St. North I retrace my steps to the office where we find our last eatery directly across Brevard Ave,, the always excellent,  Pompano Grill fine dining.

If I missed any, please let me know. By my count 18 of the over 40 listed have live music at least some of the time and only eight or nine of the 40 plus don't serve any food. If your image of Cocoa Beach is tourists, T-shirt shops and traffic it may be time to venture south..

"I'm sorry about last night. The next time I act in a willful or vain manner, you have my permission to put poison in my food, if you are not already planning to do so. Were you actually involved in a bank robbery? I think one of us is crazy. It's probably me. Take care. Your loving husband, Hack"
__from The House of the Rising Sun by James Lee Burke

Sunday, April 17, 2016

Onshore and Honking

It's been a windy few days in Cocoa Beach with temps in the 70s and 80s. The ten day forecast is for decreasing winds, clear skies and highs between 76 and 84 degrees. Surf was excellent for a few days last week before the winds arrived. It is still full-on Victory at Sea conditions right now with favorable surf conditions not expected again before next weekend. I can wait.

I often read or hear something about our local real estate market that is at odds with the reality that I am experiencing. I ran into an old acquaintance this past week and he started off the conversation with the statement that there aren't any deals to be had and that he thought the market might be overheated. I suppose when one hears that multiple offers are common and properties are selling within days of listing the conclusion might be that the market is too hot. The reality is that prices have been steadily rising since bottoming in the years 2009 through 2011 but not at anything approaching the pace of the bubble years 2003 through 2007. Even with the rebound in prices, some properties are selling at 60% or less of their 2006 prices. Facts don't always support the popular dialogue. Beware headlines and anecdotal evidence. My post Headlines < Statistics < Truth from last summer is worth a reread for those with the time.

Despite significantly fewer visitors in Cocoa Beach and Cape Canaveral since the first of the month, condo sales have been brisk with 21 units going under contract in just the last seven days. Nine of those units were on the market less than two weeks. There have been 47 new condo listings since April 1. Well, to be totally accurate, 43 new ones and four old listings withdrawn and relisted to trick the system into making them appear fresh.

My favorites of the new listings that are still available include the following:
  •  A furnished one bedroom 5th floor direct ocean unit in a newer building in Cape Canaveral with high ceilings and a garage asking $249K. 
  • I also like a 7th floor direct ocean 2/2 unit in south Cocoa Beach with a garage asking $375K. 
  • New last week was a 10 year old, 4th floor corner direct Banana River unit in Cape Canaveral with a private two car garage and a boat slip with boat lift asking $395K. There are not many opportunities to own a condo unit with a boat slip especially in a newer building. Likewise, private two car garages are uncommon. This is a good one in a good building. When new in 2005, these units sold for as much as $710,000 without a boat slip.

There are a few others that are interesting but the three above stand out for me. Anyone interested in looking at these or any others feel free to shoot me an email or phone call.

"No problem is so big or so complicated that it can't be run away from."  __Miki Dora