Sunday, February 19, 2017

Valentine's Week, 2017

There were no big changes in real estate activity in Cocoa Beach and Cape Canaveral the week of Sunday, February 12  to Sunday, February 19. The main themes of previous weeks remain firmly in place; low inventory and demand exceeding supply. Two-thirds of the 63 condo closings so far this year have been cash deals. Those hoping to purchase a condo who are planning to get a mortgage need to remember that when drafting their offers. Single family home buyers are more likely to use a mortgage with only a third of the 19 closed sales so far going for cash. Note to prospective buyers: one fifth of all closed sales so far this year sold in the first week on the market. If a property is desirable there will be multiple suitors immediately and the buyer who can't act quickly will lose out most times. I can say from repeated first-hand experience that those using an active local (Cocoa Beach) buyer's agent have a distinct edge. Three of my last four closings were under contract the first day on the market.

We had 25 new MLS listings of residential properties during the week. One was under contract within five days and one of the new listings was an old stale listing refreshed with a new MLS number. During the same week, another 28 previously listed properties went under contract, six of those single family homes.

Condo inventory is down to 216 existing units for sale in our two cities. That's less than the number of units that sold in a three-month period last spring. The same 27 pre-construction units are still offered with no takers since last week. Rounding out the shopping basket, there are 58 single family homes offered for sale, 28 of them waterfront.

The non-winter of 2017 continues to amaze with high 70s and low 80s most days. A wetsuit has not been needed this month for the several days of small, fun surf with surf temps hovering in the 70s.

Truth will always be truth, regardless of lack of understanding, disbelief or ignorance. __W. Clement Stone
Truth will always be truth, regardless of lack of understanding, disbelief or ignorance.
Read more at: https://www.brainyquote.com/quotes/keywords/disbelief.html

Sunday, February 12, 2017

The Week of February 5, 2017

New listings in the week of Sunday, February 5 to Sunday, February 12 came on at the lowest weekly rate so far in 2017. We had just 21 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral. Two were under contract within three days and three of the new listings were refreshed older listings.

Fifteen of this week's new listings were condos or townhomes and six were single-family homes. During the same week another 19 properties that had been listed prior to last Sunday went under contract making a net inventory gain of zero for the week. Twelve properties were reported closed during the week, ten condos and two single families.

Condo inventory stands at 220 existing units in our two cities with another 27 pre-construction units (same as last week) in yet-to-be-built buildings. There are 61 single family homes offered for sale, 28 of them waterfront, highest asking price $2.995 MM for a brand new beauty on the ocean at 1st St. South. Lowest priced waterfront currently offered is a fixer-upper on a canal in south Cocoa Beach just off the open river for $379,000. Exactly a third of all residential properties on the market have been for sale for over five months. We know what that means.


























The ocean end of the Minutemen streetscape project is taking shape and the finished product looks like it's going to be beautiful. [First photo above] There are two colors of pavers in the pedestrian only street laid in a pleasing pattern with a few scattered planters. Looks promising. The second photo shows the block between Atlantic and Orlando avenues. It still looks like a Todd Hoffman mining project but I'm very hopeful now that we've had a peek at the ocean end. Foot traffic last night downtown didn't seem to be deterred by the construction. Lots of people out enjoying the balmy weather and excellent live music at multiple venues. The Uber guys were busy.

“If I paint a wild horse, you might not see the horse... but surely you will see the wildness!” __Pablo Picasso

Saturday, February 11, 2017

The Appraiser Is Not Buying It

The moon setting over Merritt Island this morning just before sunrise in south Cocoa Beach.

I can examine the details of every single sale in Cocoa Beach every day for years, go in many of those sold properties and know things about many of the sales that aren't made public yet my opinion of property values in Cocoa Beach will never be held in the same high regard that an actual appraisal is. The one exception to this is the occasion when an appraisal comes in lower than expected. In those instances sellers are very willing to dismiss the appraisal as garbage. In most cases, in most minds, appraisals are seen as definitive proof of a property's present value.

I called a listing agent last week to alert him that I was sending over an offer on his new listing. I asked about the unusually high price when we talked and told him that I'd include comps with our offer to justify our offering price. He said not to bother, the owner had an appraisal done before listing and the asking price was at the appraisal number. He was as surprised as I was at the high number but the seller had firmly wrapped her arms around that number and expected to receive it. She didn't counter the very fair offer that I presented. A spendthrift purchaser may come along and pay the appraisal number but it's a long shot at best. Incidentally, the unit needs tens of thousands of dollars of renovations to approach average beach condo condition. Maybe she can get the appraiser to buy it since he and she are the only two people who believe his opinion of value. Or she can sit on it and let the rising market bridge the gap in a year or two.

Maybe my opinion of value is wrong and the appraisal is correct. They are both opinions and presumably based on the exact same data. The difference is that my opinion comes with a ready, willing and able buyer and the appraisal is accompanied only by an invoice for services rendered. The unit is still active this morning.

Public Service Announcement: Property owners and tenants, change your AC filters. Here on the beach, the inside air handler will last a decade or two longer than the five to eight year life of exterior compressor unit IF filters are regularly changed. The system will do it's job better and with less energy usage as well. The same condo unit I mentioned above had a filter change log taped to the air handler so that the date could be noted every time the filter was changed. That's a great idea in theory. The last entry on the log was dated 2014 with a note from the person changing the filter that she used the last filter and more were needed. There was no filter in the unit when I checked and no spares around. It looked like it might continue to blow air another day or two. Expected high in Cocoa Beach today, February 11, 2017, is 78 degrees under sunny skies. Enjoy.

“People would say to me, “Hey man, you look just like Paul McCartney”, and I’d say: “I wish I had his money!”” __Paul McCartney

Sunday, February 05, 2017

Wrapping Another Week - Feb. 5, 2017

I shot the photo above last week on one of those magical still mornings when the Banana River is a sheet of glass except for the scattered schools of bait fish and feeding dolphins. Sure makes it hard to concentrate on work when surrounded by this kind of beauty.

The week of Sunday, January 29 to Sunday, February 5 saw a welcome increase in new listings from the previous weeks of 2017. We had 40 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral. Seven of those were older listings that were relisted, all but one at lower, more reasonable asking prices. [Note to sellers: In this tight market, if it isn't selling it is most likely overpriced unless it's a special property with no appeal to the many prospective buyers who are actively looking to purchase. It's always worth taking a brief shot at landing a lottery winner who is willing to pay a crazy price but if that hasn't happened after a few weeks it might be time for a de-orbital burn to get the price back in Earth's atmosphere.]

Thirty three of this week's new listings were condos or townhomes and seven were single-family homes. Three were under contract by this morning. During the same week another 18 properties that had been listed prior to last Sunday went under contract. Thirteen properties were reported closed during the week, eight condos and five single families.

The busy week of new listings helped to increase our existing condo inventory to 229 units in our two cities and another 27 units in yet-to-be-built buildings. Nothing has changed with the tendency to over-price with still more than a third of the total on the market for over six months. The single family home inventory is little changed with 59 homes on offer, 29 of them waterfront.

Those of you hoping to purchase, and there are quite a few, understand that over half of all listings are optimistically priced. It is your and/or your agent's job to try to educate the seller when making a fair offer. The seller's mental number, no matter how crazy high, is usually very real to her but a well-thought out and well-supported argument for a fair price sometimes works. A low offer that can't be justified with sold comps is, in this market, a snowball in a Waffle House kitchen.

Drivers, please be careful on our streets. Every crosswalk this time of year is crowded with snowbirds and the frustration we all feel having to wait through an entire traffic light cycle to turn onto A1A does not justify some of the aggressive driving I'm seeing. Snowbirds, likewise, look behind and beside yourselves when on those crosswalks. There are less-than-reasonable people driving some of the cars waiting for you and it is prudent to stroll defensively. Let's all enjoy this beautiful "winter" weather.

...the plane brought me farther.
I'm surrounded by water
And I'm not going back again

I got my toes in the water, ass in the sand
Not a worry in the world, a cold beer in my hand
Life is good today. Life is good today.

_________________________Zac Brown Band

Sunday, January 29, 2017

Weekly Wrap Up - Sunday January 29, 2017


I appreciate the positive feedback about last week's wrap-up, so, here's another.

For the week Sunday, January 22 to Sunday, January 29 there were 21 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral, slightly more than last week. Fourteen of those were condos or townhomes and seven were single-family homes. Four of the sellers priced their properties attractively and were under contract by the end of the week. Most of the others could not resist the urge to over-price. During the same week another twelve properties that had been listed prior to last Sunday went under contract. Nine properties were reported closed during the week, all but one were condos.

There are currently 219 existing condos and townhomes offered for sale in our two cities and another 28 pre-construction units. Nothing has changed with the tendency to over-price with still more than a third of the total on the market for over six months. There are 60 single-family homes on offer, 25 of them waterfront.

The strategy has not changed for those hoping to purchase. A prospective buyer who knows how to approximate fair value for their target property and is willing and able to offer when the right property becomes available stands a good chance of succeeding as long as her criteria are not too restrictive. Out of town buyers who are unwilling to offer without physically touring the property are at a severe disadvantage to those who have an agent they can trust to protect them in a quick sight-unseen offer situation. The best properties and deals rarely happen with properties that have been on the market long enough for American Airlines to deliver a buyer to Cocoa Beach.

About those restrictive criteria: With our tight inventory, some flexibility with must-haves can go a long way towards a successful purchase. A buyer looking for a condo that will allow their Labrador that has a two car garage has exactly three possibilities this morning. If they must be on the ocean, there is but one. As always, a purchaser with a buyer's agent who knows and is active in this market and understands what is working has a great advantage over those who may have selected a face from Zillow's gallery of paid agent listings.
___________________________________

"The best scams are the ones that are not actually dishonest but that simply set up the mark to make decisions against their own interest."  __dbr

Sunday, January 22, 2017

The Weekly Wrap - Jan. 22, 2017

I am contemplating adding a weekly or bi-weekly wrap-up like the one below into the usual mix of ramblings about agent shenanigans and misbehavior. Feedback and/or suggestions are appreciated. I'm fond of the thought of "less is more" but I've been known to take that to extremes as evidenced by a couple of month long gaps between posts in the past. Note that the data I'm reporting are totally dependent upon those entering said data, a group not known collectively as being dependable nor prompt. That means there will be some under-reporting due to listing agents who didn't get around to marking a listing as contingent or closed. That said, the picture of the overall trend is true.

For the week Sunday, January 15 to Sunday, January 22 there were 26 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral. Twenty two of those were condos or townhomes and four were single-family homes. Four of the 26 new listings were under contract in three days or less, a sign of spot-on pricing and strong demand. It must be noted that there is no level of demand that will overcome some of the extreme over-pricing that I'm seeing on a lot of properties. During the same week another 18 properties that had been listed prior to last Saturday went under contract. Only five properties were reported closed during the week.

There are currently 216 existing condos and townhomes offered for sale in our two cities and another 29 units in proposed projects yet to break ground. A third of the total have been for sale for over six months, a sure sign of over-pricing. The single-family home market is somewhat more rational with 60% of the 61 houses for sale on offer for less than three months.

I'll try to post this wrap-up every week if it looks like anyone is interested. If not, we'll go back to the random post when the wind changes direction schedule.

I enjoyed seeing a lot of you last night at the downtown Sip n Stroll event. Clear skies and temps in the mid 70s contributed to the attendance. There were 26 different stops scattered in a three block area of downtown, each offering a small splash of wine and an hors d'oeuvre to the hundreds of folks moseying about. Some stops like Twin Finnegans and Heidi's Jazz Club had lines out the door when I stopped by but I didn't hear any complaints. I missed well over half of the stops as I maintained a tight orbit around the Studios. It was fun.

“If a free society cannot help the many who are poor, it cannot save the few who are rich."
  [Inaugural Address, January 20 1961]  John F. Kennedy
A considerable share of the world's population still cannot afford comfortable housing, education and quality health care.
Read more at: https://www.brainyquote.com/quotes/authors/v/vladimir_putin_3.html
A considerable share of the world's population still cannot afford comfortable housing, education and quality health care.
Read more at: https://www.brainyquote.com/quotes/authors/v/vladimir_putin_3.html
A considerable share of the world's population still cannot afford comfortable housing, education and quality health care.
Read more at: https://www.brainyquote.com/quotes/authors/v/vladimir_putin_3.html

Friday, January 20, 2017

Bandits Are Back in Town

Beware the junk fee. It's one thing to be bested by the other party in a transaction. It happens. It is another thing altogether to be taken advantage of by one's own team. Most purchasers who are getting a mortgage scrutinize their lender's disclosures trying to figure out if there are any junk fees and, if so, where they are buried. It can be difficult with today's complicated loan disclosures. Sellers are rarely concerned with the borrower's loan fees but the lender may not be the only shark in the tank.

In most Florida residential transactions, the seller is paying all real estate commissions which her listing broker shares with the buyer's broker, usually but not always, equally. There is a well-known local broker who frequently shaves off a larger portion for himself and tosses a leftover bone to the buyer's broker. Sellers agree in their listing agreement to the amount of commission and how it is to be shared with the buyer's broker. I'd love to hear Mr. Well-known's pitch for the unequal sharing. What Ms. Seller probably doesn't expect nor know to look for is an additional junk fee from her listing broker. I've written about these rip-off fees several times as far back as 2007 and thought they had quietly gone away by now but I encountered one last week.


I'm not sure at what point that $345 fee circled in red was disclosed to the seller or if it was just a coughed over small print item on the last page of the listing agreement. However it was disclosed/sold it was not justified and was a blatant rip-off of the client. In this instance the seller was already paying $12,762.50 which her broker shared equally with the buyer's broker. To gouge her for another undeserved $345 was, in my opinion, disclosed or not, shameful. My partners and I decided to form our company over a decade ago in large part because of our refusal to charge these types of fees to our clients when we were working for another local brokerage. At that time they cleverly called their junk fee a "Regulatory Compliance Fee". To quote Damon Wayans, "Homey don't play that." Adios.

Buyers and sellers of real estate, do not pay these fees. If you see one on the settlement statement, stop the proceedings and demand that it be removed. Trust me, your agent will be more than willing to pay that $345 out of his multi-thousand dollar commission check rather than let the deal die.

Some of the past posts about these fees for those who may have missed them.:
Unarmed Robbery Broker Style 
Revisiting Compliance Fees
Robberies Update

"Never make fun of people for mispronouncing a word. It means they learned it by reading." __Morgan Housel

Wednesday, January 11, 2017

The Curious Case of the Disappearing Agent


This is the true account of an interesting and perplexing transaction last month with a mysterious buyer and his communication-impaired buyer's agent from another city.

November 3: A buyer's agent calls the listing agent of a condo in Cocoa Beach asking to show. The unit is vacant and available to show anytime, but, being from Orlando, the buyer's agent doesn't have access to the local electronic lockbox system so he asks if listing agent can unlock the unit for him. No problem.

November 8: After no contact for five days after showing the buyer's agent delivers a very low offer contingent upon a mortgage. The listing agent presents the offer to the seller who doesn't want to counter as the unit is in a condotel complex where a mortgage is impossible to acquire unless it is from an unconventional source. The listing agent suggests countering without a financing contingency. Done.

November 9: Buyer counters at a lower number, cash, close in 30 days.

November 10: Negotiations ensue and buyer and seller verbally agree upon a higher number, cash purchase with a 30 day close and buyer's agent asks listing agent to write it up and he'll get buyer to sign. Written, signed by seller and delivered to buyer's agent same day.

November 11: Buyer's agent sends a lender's condo questionnaire but no signed contract. What? This was a cash offer. Buyer's agent says don't worry, buyer is just exploring his options. OK, management company completes the questionnaire three days later and listing agent forwards it to buyer's agent. Buyer's agent goes radio silent. 

December 7: The buyer's agent hasn't responded to any emails, texts or phone calls from listing agent for three weeks. Suddenly,  26 days after last contact, he emails listing agent to say that buyer is moving forward if the property is still available and is sending the signed contract shortly. Listing agent informs seller that the dead have arisen but neither holds their breath.

December 8: Signed contract is received from the buyer's agent with escrow deposit due in three days and a ten day inspection period with a close date of Dec. 30. Buyer's agent returns to his Faraday cage and relights the "Do Not Disturb" sign. Listing agent marks the MLS listing as "Backups" rather than "Contingent" and notes in the narrative that the contract is "shaky" and encourages backup offers. Fingers are crossed but seller's and listing agent's expectations remain minimal.

December 14: Escrow deposit is received, three days late. Buyer's agent surfaces briefly to acknowledge receipt and reenters suspension chamber blithely letting the inspection period expire four days later with zero contact..

December 26: After a two week disappearance buyer's agent notifies listing agent that inspections will be done Dec. 27 three days before closing. Inspection period expired on Dec. 18.

December 27 late night: Buyer's agent emails inspection report with a demand for all items to be repaired prior to closing on the 30th.

December 28: Seller refuses to do repairs but offers $300 credit at closing for the small items found. and buyer responds that he is willing to delay closing to give seller time to repair. Seller says, no dice, and closing will still happen on Dec. 30 or he will keep the deposit which became non-refundable ten days earlier at the expiration of the inspection period.

December 29: Buyer wisely agrees to the $300 repair credit, signs closing documents and initiates wire of funds late in the day which does not arrive until Jan. 3 for unknown reasons.

January 3: Buyer's agent who has been absent since demanding repairs the previous week sends his last text to the listing agent "Did you receive commission yet?"

While frustrating, this all-too-common level of incompetence from some of my fellow practitioners does provide entertainment and makes for lively discussions when the used house salesmen gather round the table for refreshments. I'd like to thank this buyer's agent and his peers for making the rest of us look better than we would sans the contrast. A hearty toast merry fellows.

"Just keep the motor runnin' this won't take very long
By the time the police get here we'll be already gone
We've got to leave 'em hangin' we can't leave 'em no clues
Just take the money and run
Lord I love robbin' banks" ___David Allan Coe