Friday, March 27, 2020
Last week of March is typically the busiest week of the year. Things are different this year with many would-be visitors cancelling reservations and snowbirds departing early because of the corona virus. All bars are shut down and restaurants are doing takeout or delivery only. All beach streets and parking are blocked off and beginning today the beach itself is closed everywhere in Brevard County from 11 AM to 4 PM for Friday Saturday and Sunday. That could change. Traffic is very light and there are very few cars parked along the streets downtown. It's an eerie pre-hurricane vibe.
Not surprisingly, real estate activity has slowed dramatically. The last three weeks of February we were averaging 26 new residential contracts executed per week in Cocoa Beach and Cape Canaveral. That started slowing in early March and was down to thirteen last week. So far this week we are showing just nine executed contracts. The number of new listings so far does not appear to be changing. It's too early to tell if the reduced buyer activity has impacted prices. We won't see the impact in closed sales numbers until next month when this month's slowdown in executed contracts will begin to be evident. As we're just now closing contracts from January and February, the March numbers are still looking good.
I'm hearing talk about changes in the secondary mortgage market which is being reflected in more stringent borrower requirements. Jumbo loans are particularly affected. Debt to income requirements have become more stringent as have credit score thresholds. Self-employed borrowers have a new set of higher hurdles to clear. Regardless ones situation, getting a mortgage now is more difficult than it was a month ago and some who could qualify last month may be rejected this month. Talk to your lender again if you're looking to purchase. The rules have changed and what you thought you could borrow in February may not be possible today. There is a strong possibility that we will start to see existing contracts fail to close because of these changes.
We've closed 50 condo units and 15 single family homes so far in March. Median price is just under $300,000 for condos and $540,000 for single family homes. Inventory for sale this morning is 225 condo units with an additional 21 in yet-to-be-built buildings, most of those in the Surf at Cocoa Beach downtown which is yet to break ground. There are 55 single family homes for sale in the two cities.
Vacation rental properties are being hit hard with cancellations due to the virus outbreak. If the beach closing is extended to include weekdays we can probably expect remaining rental demand from those within driving distance to dry up completely. Both grocery stores in Cocoa Beach are doing a seniors-only hour every morning to give us old folks a chance to snag a roll of toilet paper with relatively light customer density. I don't think they thought this one through very well as it isn't playing out as planned. A skewed to senior population means the old-timer hour is the busiest time of the day.
We are not under stay at home orders yet but that may be coming. I may have to actually clean out the garage if that happens. So far, we're eating really well and are treating the evening meal as the highlight of the day. Leisurely taking a couple of hours to prepare the meal is therapeutic and enjoyable.
Most restaurants in Cocoa Beach are offering curbside pickup for take-away including the Fat Snook. Growlers of draft beer and margaritas (among other drinks) are available for take-away with your food from the 4th St. Fillin Station downtown and at least one Cocoa Beach eatery is including a roll of toilet paper with every delivery while supplies last. Please support our eateries if you can. This is a hard time for those who serve and feed us. In lieu of ordering takeaway, consider buying gift cards to use later. Every little bit helps.
Best wishes to everyone and hope we can all emerge from this with the slightest of scars.
"It doesn't matter if you buy or sell today, the important thing is that you panic." __Josh Brown
Sunday, March 15, 2020
We are at the peak of snowbird season in Cocoa Beach and Cape Canaveral and activity in real estate is busy as is always the case this time of year. Thirty nine residential properties have gone under contract since March 1. Lower priced properties have seen the most activity with 33 of the 39 asking under $400,000. Nine of the 39 are single-family homes, all but one in the under $420,000 range. During the same two week period 33 properties, contracted earlier, have closed. Eight of those were single family homes.
Sales of note included a nicely remodeled, 4th floor direct ocean Stonewood of Cocoa Beach Sand Dollar wide floor plan 2/2 that sold for $530,000 or $360 per square foot.
A remodeled & furnished 6th floor direct ocean SE corner 3/2 Beach Winds downtown Cocoa Beach sold for $434,000.
A small, remodeled ground floor, direct ocean 3/2 Sea Oats of Cocoa Beach sold for $325,000. It had no ocean view.
A partially remodeled direct Banana River 4th floor 2/2 Harbor Isles of Cocoa Beach sold for $275,000.
These are representative of the types and prices of condos currently selling. Those looking to purchase have a total of 220 condo units to consider in all price ranges. Potential buyers looking for a direct ocean unit asking less than $400,000 have five possibilities. If they want above the ground floor that drops to three units between $375,000 and $395,000.
As always, buyers need to have an idea what represents a fair price range for the type of property they're looking for. The opportunities to overpay for a Cocoa Beach condo are abundant, more so than at any time in the last several years. The majority of our for sale inventory is overpriced and uninformed buyers or those without an experienced local buyer's agent are at a disadvantage. Know this market or engage someone who does.
I hope everyone has been enjoying the summer weather this month. Expected to hit 80 again today. Please be aware of the poor golfers behind you. If you haven't had to wait on anyone ahead of your group but you see the guys behind you every time you look back, your group is probably playing too slowly. Thanks in advance.
“Expecting the world to treat you fairly because you’re a good person is like expecting a bull not to attack you because you’re a vegetarian." __Dennis Wholey
Saturday, February 29, 2020
Current demand is strong with 75 units going under contract since February 1, about a third of those are units asking over $400,000. February is the month when sales begin to ramp up every year and activity usually stays strong through August. Those looking for a condo unit should expect competition. An informed buyer will also be aware of the highly optimistic prices of the majority of the inventory. In a market with low inventory and high demand it is to be expected. Buyers who will be getting a mortgage should know that their lender will not be equally receptive to every condo they may consider. The association's financial health will be scrutinized and the intensity of that scrutiny may vary depending on the amount of down payment being made. Talk to your lender before you narrow your property search and find out what's going to be required so you aren't blind-sided by arcane and seemingly unfair lender questions that may eliminate your dream condo.
Happy Birthday to all the Leap Year babies. I'll go into detail about specific sold properties in the next post.
Cocoa Beach has a great new healthy eatery just south of the Cocoa Beach Fire Station, the Skinny Mermaid, offering excellent poke bowls, wraps, salads and boba teas. It's worth a visit.
"Over the years, a number of very smart people have learned the hard way that a long string of impressive numbers multiplied by a single zero always equals zero." __Warren Buffet
Thursday, February 06, 2020
Firmly into snowbird season 2020 we sit this morning with 221 existing condo units for sale on the Cocoa Beach and Cape Canaveral MLS, a modest increase from our inventory levels of last year. There are another nineteen to-be-built, pre-construction offerings as well, most of those in the new luxury oceanfront building, The Surf at Cocoa Beach, to break ground shortly downtown.
January was slow for closed sales as is usually the case. We closed 38 condo units in our two cities in January compared to 40 in January 2019. Highest price sale was $603,500 for a corner unit at Majestic Seas with a median selling price of $240,000. Four oceanfront units commanded over $300 per square foot, all of them above the ground floor and with extensive remodeling. Sellers would be well-advised to remember that when they are pricing their units. An original condition 2/2 on the 5th floor with a magnificent view is not going to justify $300 a foot unless there is a Tesla being thrown in the deal.
Sixteen single family homes closed in the month, all in Cocoa Beach, none in Cape Canaveral. Highest price paid was $830,000 for a beautifully and completely remodeled four bedroom pool home on a canal with covered dock and boat lift. Half of the sixteen sold for more than a half million. Lowest price paid was $330,100 for a modestly updated but well-maintained four bedroom non-waterfront four blocks from the ocean.
I have had a slow but interesting start to 2020. I have been tussling with a minimal-contact buyer's agent who is also trying to be a mortgage broker for his client. As I expected, that distant lender failed to complete the loan but a local lender swept in and saved the day start to finish in less time than it took the the distant lender to get an appraiser to the property. Buyers are advised to use a local lender whenever possible. Rate shopping internet lenders may get a lower interest rate estimate but that saves nothing if they fail to close. That happens often enough that I would not consider using an out-of-town lender myself regardless the quoted interest rate.
The fairways at the Cocoa Beach Country Club recently resemble the scenes from Jurassic Park with herds of slow-moving herbivores roaming grassy plains. Those gentle giants in our case are our beloved snowbird visitors who do their best on our courses to teach us to slow down and smell the roses. I'm trying. I really am but as George W. used to say, "It's hard, reeeeeal hard."
"It’s so exciting. My son turned 14, and now he knows everything! Everything! I don’t have to tell him anything anymore because he already knows! In fact, he knows more than I do AND more than his dad does! We couldn’t be more thrilled. What a joyous time." __Michele Tafoya
Friday, January 03, 2020
There were a total of 154 single family homes closed in the year in our two cities at prices from $192,500 to $1.995 MM with a median of $410,000. There are but 55 for sale this morning.
Total sales activity for 2019 trailed last year's record setting 734 condo units but was still among the four highest years since 2005. Not surprisingly the other three high years were 2016, 2017 and 2018. I see no reason to anticipate this trend slowing outside of some unforeseen macro event. Of course, those trend-influencing macro event are always unforeseen so a trend shift remains anyone's guess. Just less than half (48%) of the sold units closed for cash so a sudden surge in mortgage rates would be expected to have limited effect. Units that were priced fairly sold quickly with 138 units selling in the first week on the market. At the other end of the spectrum we had 105 stubborn sellers who overpriced their units and had to wait over six months to sell. A quarter of those took over a year to sell.
Construction will begin this year on the new oceanfront condo, The Surf at Cocoa Beach, in downtown Cocoa Beach on the vacant lot that has been empty since the storms of 2004 destroyed the shabby old condo building that was there. It's a welcome addition to our newly vibrant downtown area. Expect more new things downtown in 2020.
I snapped the eagle pictured at the Cocoa Beach Country Club last week. We are used to seeing lots of ospreys, dozens of species of wading birds and waterfowl including the occasional roseate spoonbill but bald eagles are a rare sight. The Country Club is a true lootbox for bird watchers. The arrival of our largest winter population of migratory fowl, the northern snowbird, has begun. In addition to the Cocoa Beach Country Club golf courses another good location for viewing is Publix. The males tend to gather around the free coffee up front while the females forage throughout the store before competing, often savagely, for spots in the Express Checkout line. The usual trend is steadily increasing numbers through the end of March into early April when we reach our max number of visitors with converging snowbirds, spring breakers and baseball families here for spring training at the Expo. It looks to be another record setting season.
Anyone looking for their own little slice of Cocoa Beach is welcome to contact me with questions or advice or representation. I'm willing to share what I know about our special little town and am willing to offer an opinion about the rest whether I know what I'm talking about or not. Happy New Year, all.
"Concentrated risk is not compensated in the long-run." __unknown
Wednesday, December 18, 2019
During the peak of distressed sale activity in 2011, 71% of all condo sales were cash, no mortgage. Some of that was because lending standards had tightened considerably since the fiasco period of NINJA (no income, no job or assets) loans of the early to mid 2000s. That percentage of cash buyers has slowly declined since and we look to have just over 50% of all condo sales in 2019 close for cash. The busiest year for sales during the decade was last year when we closed 734 units. I expect us to end 2019 with just under 700 units closed. It's a remarkable number considering inventory has hovered right around 200 units all year.
In 2009 six units at the two-year old Meridian closed for less than $600,000, the lowest for $510,000. A third floor 3000 square foot unit at Riomar in south Cocoa Beach closed for $550,000 and someone picked off a 6th floor direct ocean 2419 sq ft Constellation unit for $395,000. Prices in most complexes were well off the highs of 2006-2007 but would continue to drop for another couple of years. Even so, everyone who bought then and held on has done well. For what it's worth, the S&P 500 has just about tripled in the same ten year period.
Of the 663 units closed so far this year, 129 of them sold in the first week on the market and 42% closed within the first month. Just over half were purchased for cash even though mortgage rates are only about a third of a point above the all time low reached in 2012. There remains good demand for the low number of properties available and barring some macro event that would affect activity I see no reason to expect the upward trend in prices of the last seven or so years to slow. The advice for buyers is the same as it has been; know what you'd like to have and how to estimate what it is worth and don't hesitate to offer when that property is found. Forget lowballing in hopes of stealing something. That just ain't gonna happen. Chances are that there are several other prospective buyers looking at the same property. It's not necessary to overpay but it is extremely unlikely that you'll be able to purchase something for less than current value. Starting low may give another buyer time to get their offer in while you're negotiating up from your lowball number. A multiple offer situation is to be avoided if possible.
2019 has been a year of positive changes for Cocoa Beach. We finished our new parking garage downtown and several new restaurants opened downtown. The old Casablanca bar across from City Hall was gutted and turned into a swanky wine bar, Napa Beach Bubbles Bar. Those who remember the Casablanca need to stop by for a look and a drink. Prepare to be amazed at the changes. Another notable new addition is the 4th Street Fillin Station. The old gas station at the corner of 4th St. N. and Orlando Ave. has been transformed into a hip restaurant and bar with a huge backyard and indoor seating and bar in the old repair bays. It is kid friendly and has lots of good vegetarian options with a beer menu of several pages. It demands a visit. A new oceanfront condo project has been announced downtown between Minutemen Cswy and 1st St. North. Prices from $800,000 to $2.2 MM.
It was an exciting year for the space business at the Cape. We saw SpaceX launch a Falcon Heavy and successfully land all three stages, two on land and the other on the drone ship, Of Course I Still Love You. The Boeing Starliner crew capsule is planned to launch in a few days for an unmanned mission to the International Space Station in preparation for future manned missions. SpaceX began delivering its Starlink broadband satellites to orbit with a mind-boggling sixty satellites deployed from one launch vehicle. They expect the network of several hundred satellites to be functional and delivering satellite based broadband internet service by the end of 2020. The Boeing X-37 Spaceplane landed in October after 780 days in orbit. Jeff Bezos' space company, Blue Origin, has been busy with test flights and doing a massive expansion of their existing facility at the Cape. They completed their 12th suborbital test flight and landing last week of their New Shepard vehicle which is designed to carry astronauts on future missions.
Merry Christmas and best wishes to everyone as we wind down 2019 and prepare to launch into a brand new year. If you find yourself in Cocoa Beach, stop by our office downtown and say Hello.
"Don't blame the Clown for acting like a Clown, ask yourself why you keep going to the Circus."___Anonymous
Friday, November 22, 2019
If I'm looking for a direct east facing oceanfront unit above the ground floor with at least two bedrooms and two baths I have one available asking less than $400,000. If I must have a garage, there are none below $400,000. If my budget runs to $500,000, there are five possibilities. Six units matching our search criteria above have closed in the last 30 days only one for less than $485,000.
Interesting note here; as I was searching for east facing direct ocean units I had some results that were not east facing despite being entered by the listing agent as direct ocean, east facing. I feel certain these were intentional mistakes. This is a good time to point out that consumers who find a too-good-to-be-true listing should assume that it is a deceptive listing. There are no under-priced listings in our market, only misrepresented.
Prospective buyers who don't have to be directly on the beach have sixty units with at least two bedrooms and two baths asking less than $300,000, half of them below $250,000. Most are a short walk to the beach. Buyers hoping to find a single family home here have 64 to consider, ten asking over a million and ten asking less than $400,000.
Mortgage rates have stayed in the ridiculously low range for the entire year but 47% of condo buyers so far this year have paid cash for their purchase. Multiple offers have been the normal for any desirable property asking anywhere near fair value. Those of you planning to use a mortgage should keep in mind that should you find yourself in a multiple offer situation it is very likely that your competition will be offering cash. Knowing that, try to make the other parts of your offer as shiny as possible. Don't expect to win the contest with a mortgage contingency on a lowball offer.
The Cocoa Beach Art Show is next weekend. It's always a fun time with tons of good outdoor live music and street food as well as a lot of interesting art. Hope to see many of you there.
“I'm not upset that you lied to me, I'm upset that from now on I can't believe you.” __Friedrich Nietzsche
Thursday, October 17, 2019
Half of the condos sold so far this year have closed for cash, no mortgage. Over half sold in less than two months on the market and a quarter of all sales sold in the first two weeks. That's an impressive number considering the tendency of sellers and agents to start new listings at optimistic asking prices.
Single family homes have been equally busy with 133 closed so far in 2019. A third of the buyers paid cash and a third sold in the first month on the market. There are 53 homes for sale this morning in our two cities, two thirds of them asking over a half million.
Daytime temps have settled into the 80s most days and hurricane season is almost finished with but one near miss for Cocoa Beach this year. The mullet run turned out to be a complete miss this time for surf fishermen because of the incredibly rough surf during the run but there were good catches of snook inside the Port for those with boats.
"Talk low, talk slow and don't talk too much." __John Wayne