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

Sunday, June 04, 2017

June Flowers and Property Sales

It might have been nothing more than a cruel tease but we got our first long, soaking rain of the season on Friday after months of little to no rainfall. Every green and blooming thing in town is radiating happiness and it seems to be affecting the humans as well.

The month of May finished with a bang in the local real estate market. As of this morning, the MLS is showing 67 condos and townhomes closed in Cocoa Beach and Cape Canaveral during the month. As is normal in our market, over half sold for cash and ten sold in the first week on the market. Average days on the market are creeping up as sellers, emboldened by low inventory and rising prices, are listing with ever more optimistic initial asking prices. As always, the market ultimately decides the selling price, not the seller. The MLS is showing 204 total existing condos and townhomes for sale in Cocoa Beach and Cape Canaveral this morning and another 27 to-be-built units.

Action in the higher end of the condo market was subdued with only ten of the sold units closing for more than $399,000. Over half closed for less than $220,000. Decent oceanfront units were closing for prices mainly in the $230 to $285/sf range with only one smaller unit commanding over $300 per square foot. For perspective, there are 33 units currently asking over $300 per square foot. Only a few of them deserve that price.

Single family home sales continued at a strong pace with 16 closed in May, five of them over a half million. Only three of the homes sold for cash. A third of the homes sold in the first 30 days on the market. There are 73 homes currently for sale in the two cities.

Bottom Line
The song remains the same; know how to, or have a buyer's agent who does, accurately estimate fair value of properties for sale. If a listing is priced closed to fair value, it usually sells quickly. If a condo, know that over half the interested parties will likely be offering cash. Those who have been looking for a while will know that putting off an offer until travel arrangements have been made will likely contribute to being to the table too late. It's possible and usually advisable for out of town buyers to have their agent go ahead and offer on attractively priced properties sight unseen as long as they can negotiate a long enough inspection period to accommodate travel here for viewing. As we oldtime surfers used to say, "the lip does not linger".

SpaceX launched a previously flown Dragon Spacecraft on a resupply mission to the ISS yesterday and successfully landed the first stage of the Falcon 9 rocket vertically at LZ1 at the Cape after stage separation. The tremendous sonic boom of the returning Falcon loosened caulking and fillings all over town.

"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects."  __Robert Heinlein

Monday, May 29, 2017

Don't Panic...Yet

A fine example of Jurassic World Cocoa Beach wildlife. I've seen this guy chase snakes away.

A few things: Several dozen property owners in Cocoa Beach and Cape Canaveral woke up Sunday morning of Memorial Day weekend to find (if they looked) that their property was being advertised on Zillow as "foreclosed" or "pre-foreclosure (auction)". Must have made for an interesting morning for those who caught it. Most probably didn't but you can bet that real estate agents across our area are frantically researching the flood of new distressed properties that their Zillow-using clients are calling about. The handful that I looked at when I got the alert proved to be mostly previously foreclosed properties that had long since been sold and off the MLS in some case for over six months. It was either a computer glitch during the night or a deliberate ploy by Zillow to increase traffic, their life-blood. We may never know. For the record, of the 298 residential listings in Cocoa Beach and Cape Canaveral this morning only five are distressed, four of them bank-owned, one auction and zero short sales.

In the shenanigans category; another agent mentioned to me that a settlement statement he saw last week had a substantial "marketing fee" being paid by the seller to her broker. This was in addition to the commission already being paid which was at the top of the range I'm used to seeing. Not sure what extra "marketing" on this particular property deserved a bonus beyond what is usually provided in a listing but, hey, if they'll sign agreeing to pay more, why not? My opinion; disgraceful gouging, but I don't have all the details and perhaps the seller insisted to weekend ads in The Telegraph and Le Monde. to which the listing agent agreed with the extra fee.

We are resting at a measly 200 total existing condos and townhomes actively for sale in Cocoa Beach and Cape Canaveral. There are another 27 pre-construction units offered to the market's collective indifference. The low inventory numbers may have finally put the brakes on the sales rate. In the last two weeks only 21 units have gone under contract, quite a slow-down from activity in the first quarter. Five of those sold within the first five days on the market. So far in the month of May, 53 units have closed, 32 of them bought with cash. Fifteen single family homes have closed so far in May with only three of those purchased with cash.

Speculations: A frequent question I get is "Should I wait to look for a property to purchase in Cocoa Beach assuming prices will be better later?" Looking at our 200 unit inventory, which I though would level out many dozens of units higher, I don't see any forces that would contribute to prices retreating from current levels. This is, of course, barring a macro event like dollar collapse, war with North Korea or another country gaining control of our executive branch. Demand is still high and the appreciation we see appears to be at a healthy sustainable rate. Without a flood of new properties, the demand should continue to exceed the supply well into next year and beyond. The takeaway for those who agree is to continue the search if purchasing is the goal. Waiting for a dip in prices could prove expensive.

There's an excellent new fish market downtown Cocoa Beach on the beach side of South Atlantic just south of Minutemen next to the sunglasses shop. It's Coconut's Fresh Catch Market and it's not what you might expect. I've been in three times and I've found big, fresh cuts of locally-caught fish, tripletail, cobia, tuna and mahi in addition to some other not-local fish. Homemade crab cakes ready to cook for $5 each. The prices are slightly higher than the markets at the Port but the difference won't buy the gas there and back and the quality is equal. If you like fresh seafood, check them out and support this welcome addition to the community.

On this Memorial Day we celebrate and honor those who made the greatest sacrifice defending our freedom and way of life. Think about the idea of someone you don't know dying to protect your right to the way of life you enjoy. That is what this holiday is about. In addition, there are thousands of living Americans serving right now knowing the possibility of their making the greatest sacrifice is part of their service. To those before you and to you, thank you and a tip o' the glass.

There are so many ways to be brave in this world. Sometimes bravery involves laying down your life for something bigger than yourself, or for someone else. Sometimes it involves giving up everything you have ever known, or everyone you have ever loved, for the sake of something greater.

But sometimes it doesn't. Sometimes it is nothing more than gritting your teeth through pain, and the work of every day, the slow walk toward a better life." __Veronica Roth, Allegiant

Friday, May 19, 2017

Fear and Loathing in Cocoa Beach

I apologize for the long interval between posts. Over the last couple of weeks I began writing two different tales of shenanigans and outrageous behavior in the local real estate market, a favorite subject for writer and reader. Alas, a moment of level-headedness led me to shelve both articles. Rather than leave the reader hanging, briefly, one was about an episode of collective insanity at one of Cocoa Beach's largest (and tallest) condos. After years of willingly filling out prospective buyers' lenders' questionnaires, the association decided that they would no longer complete the required form. I happened to be the unfortunate agent with a buyer seeking a mortgage who was first confronted with the new policy. The association, after refusing to complete the form, referred the lender to the association's attorney who likewise refused citing imagined liability. What the association and their attorney failed to anticipate was the consequence of not completing the form. Without a completed form, the 108 owners in the building would not be able to sell to someone who needed a mortgage to purchase. It would effectively become a cash-only building. Here's what the form looks like for those interested.

After a few owners were alerted to the consequence of the new policy a small uprising ignited, the questionnaire was swiftly completed by a Board member and the loan package proceeded to underwriting, disaster averted.

The other tale of real estate drama I chose not to share was having my behind chewed viciously by a listing agent over some excluded contents in a "fully furnished" condo. She felt that I was being unreasonable in asking for an excluded items list prior to making our best and final offer. We ultimately offered without the list which was then produced, five days after listing, with, in our opinion, excessive exclusions. We ultimately reached agreement but not before I endured a scathing tirade and a hangup. All part of the job. About hangups: I got to thinking that punching the red "END" button on a cell phone, no matter how vigorously, is not nearly as gratifying as slamming a heavy phone receiver into its cradle. The millennials among us will never experience that warm fuzzy. On to real estate activity in Cocoa Beach and Cape Canaveral.

Since May 1, fourteen single family homes and 45 condos and townhomes in our two cities have received accepted contracts and another 70 new listings have come on the market. During the same time 46 properties have closed. Over half, 26, of the sold properties sold for cash, no mortgage. Inventory this morning sits at 206 existing condos and townhomes for sale in Cocoa Beach and Cape Canaveral. There are another 27 pre-construction units offered but they seem to be attracting very little attention despite compelling pricing at at least one of the projects. There are 72 single family homes for sale in the two cities, half of them waterfront and just under half asking over a half million.

Super boat races in the ocean off Cocoa Beach this weekend. Best places to view other than from a helicopter or boat will be in the stretch from about the Pier to Xanadu. The boats will be available for up close viewing on their trailers Friday night downtown. Hope to see some of you there.

"We felt the lightning
 And we waited on the thunder."  __Bob Seger