Wednesday, October 03, 2018
Maybe. Maybe not. Residential real estate appraisals are not definitive. An appraisal is the appraiser's opinion of the market value of a property on the date of the appraisal. In simple terms, the appraised value is the appraiser's opinion based on recent sales of nearby, comparable properties and adjusted for differences. Market value by definition is: the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
That recent appraisal was probably a refinance appraisal. A refinance appraisal differs from a purchase appraisal in that the appraiser is not in possession of a contract with a price (target). He is essentially going in blind and must come up with appraised value using comps alone. That doesn't mean that a refinance appraisal is less accurate but it does leave room for a greater range without that target contract number. The buyer who negotiated for $10,000 less than the refinance appraisal shouldn't be surprised if the new appraisal done for their mortgage comes in closer to their contract price than the refinance number. I have seen sellers refuse a fair offer because it was less than their refinance appraisal number. Unless the appraiser is offering to buy the property for his appraised value, remember to treat it as what it is, an opinion of value. Appraiser Tom Horn did a good write-up on the differences in appraisals.
Inventory of condos and townhomes in Cocoa Beach and Cape Canaveral has been virtually unchanged all of 2018 and is hovering at 222 existing units for sale in the two cities this morning. In the month of September we had 48 units reported as closed. Twenty three of those were cash deals. Eleven were in oceanfront complexes and those eleven closed at prices between $270,000 for a 1st floor Cape Winds 2/2 weekly rental unit and $675,000 for an impressive 2525 square foot 5th floor SE corner penthouse at Hacienda del Mar in south Cocoa Beach. Median price of all 48 was $230,000.
Activity in single family homes remained slow with only seven closing in the month. All but one were in Cocoa Beach. Three non-waterfront homes sold in Cocoa Beach at prices between $320,000 and $350,000. Someone paid $1.5 MM for a gorgeous 9 year old 3836 square foot pool home on the open river in south Cocoa Beach. There are 73 homes currently for sale.
Green fees at the Cocoa Beach Country Club changed to the higher winter rates on October 1 and will stay there until after snowbird season. Golfers can save on the rates by purchasing advance rounds. Ask for details in the pro shop.
Raised on promises
She couldn't help thinkin' that there
Was a little more to life
After all it was a great big world
Wednesday, September 19, 2018
The most common form of MLS manipulation is cancelling and relisting a property to reset the days on market clock. Misrepresenting sold prices happens when furniture is included in the sale but not noted on the closed listing. A prospective buyer looking at an unfurnished condo might think he's getting a good deal if the unit is priced at the exact same price as the last identical floor plan unit to sell in the building. If that other unit's price included $40,000 of new furniture that was not noted in the closed listing, he may be overpaying. I'm aware of developers propping up prices by issuing "decorating credits" of tens of thousands of dollars back to the buyer at closing. For instance; the recorded selling price of $650,000 included a $60,000 decorating credit effectively making the actual price paid $590,000.
Our MLS has strict rules including fines up to $15,000 for relatively minor infractions but there aren't rules that prohibit either of the above manipulations. The Florida Real Estate Commission has instituted a new rule that addresses another common manipulation, that of crediting sales of an entire group of agents to one team member to artificially boost that agent's production numbers which doesn't really hurt anything. What it does accomplish is boosting that agent's recent transaction numbers at Zillow which is most agents' best source of new prospects. If you see an agent with hundreds of recent transactions in Zillow, you might be seeing the benefit of this type of team strategy. For the record, every team that I know of in our area that is doing this is top notch and providing great value to their clients. They are using a perfectly legal (until now) method of generating business. I personally have no problem with it but someone must have complained to FREC to get this new rule considered and passed. The new rule reads:
I hope is everyone got all the waves they wanted the week and a half of Hurricane Florence swell and are ready for the next, should we get one this season. We still have time for more and October is generally productive for large, clean surf. Be safe out there and share the waves. There are always enough for everyone.
I tried so hard and got so far
but in the end it didn't really matter. __linkin park
Monday, September 10, 2018
Condo sales in August were slower than in July with 55 units closed in Cocoa Beach and Cape Canaveral as reported by the Cocoa Beach MLS. Prices ranged from $84,000 to $765,000 with a median selling price of $260,000. The lower price brackets dominated the activity with only three sales exceeding the half million dollar mark with one each at Meridian, Mystic Vistas and Stonewood. There were seven direct ocean, east-facing units above the ground floor closed in the month with most clustered in the $265 - $275 per square foot range. Only two units commanded over $277 per square foot, one at Meridian and the other a high floor Sand Dollar at Stonewood, both exceptional and closed at numbers over $340/sf.
Single family home activity increased with 15 homes closed in the month, all but one in Cocoa Beach. Highest price paid was $1,037,500 for an 11 year old beauty on Edwards Bay in Snug Harbor, south Cocoa Beach. The majority closed at prices between $300,000 and $500,000.
Casual observation tells me that showing activity has slowed across the board, not unusual in the back to school period. There are currently 69 single family homes offered in the two cities and 215 existing condo and townhouse units. The majority of sellers are still clinging to optimistic asking prices in my opinion so prospective buyers will benefit from information and research about current market value ranges of their target property type. Good luck out there.
The beginning pulse of swell from approaching Hurricane Florence is already showing on our beaches. Anticipation is high for a clean sizable swell. We've been teased and disappointed before but this looks promising for a few days of good waves in Cocoa Beach.
"Stealing is stealing. I don't care if it's the internet or you're breaking into a warehouse somewhere - it's theft." __Patrick Leahy
Monday, August 27, 2018
How about the fourth floor unit listed as being on floor 0? My search for units above the 2nd floor won't find that one. Or the several condo listings without the condo name entered in the appropriate listing field? I often have buyers looking for a unit in a specific building. My search for listings in that particular building will not find a listing with that omission.
Marketing residential properties has changed quite a bit since the old days when the MLS was a booklet that was printed and distributed every few weeks. Consumers had no way of knowing everything that was for sale without the help of an agent other than driving around in their target area looking for signs. Since many condos don't allow signs, that wasn't effective for prospective condo buyers. Print advertising was the primary and most effective marketing strategy. There were a half dozen specialty real estate booklets in our area that were distributed to area stores and motels and were free for the consumer. The Sunday real estate section of Florida Today was as big as the entire paper is today. Hopeful buyers would grab the paper and a pen and sit down to sift through all the listings hoping to find something that sounded like it might work. Busy agents had contracts with the paper agreeing to spend big dollars every month. The Sunday section had full color pages with photos in addition to the several pages of classifieds. Listing agents were compelled to spend on print advertising as sellers expected and, rightfully, demanded it. The internet turned that model on its head.
By the mid-2000s the MLS was online and consumers had the ability to search for exactly the property type they were interested in. They could see photos, read descriptions and find details such as rental restrictions and taxes for every listing. Print advertising outside the MLS became more effective at landing a listing than for actually attracting a buyer. With a listing on the MLS, listing syndicators scraped the listings and redistributed to dozens of online sites. Listing agents shifted their advertising dollars to Google, Zillow and other online real estate sites. By 2018 all any listing really needed was a reasonably fair listing price, good photos and an MLS listing and the rest would take care of itself. That is unless the listing agent failed to enter the correct information or was cheap and lazy and took fuzzy cell phone photos or none at all. The number of listings with incorrect or missing info and/or bad photos seems to tell me that many sellers aren't checking their listings or vetting their agent. There are zero excuses for a poor listing yet quite a few agents are getting away with it. I would encourage all sellers to carefully check their listings right now for accuracy and appeal. The market is strong but you don't need a listing agent adding friction to the selling process. Just saying.
I was reading back through some of my older posts and thought this one was worth a read for those who may have missed it the first time around in 2015. Don't. Say. That.
"Personally, I am very fond of strawberries and cream, but I have found that for some strange reason, fish prefer worms." - Dale Carnegie
Tuesday, August 07, 2018
I don't have a good guess for the drastic slowdown in home sales other than price creep. Only 17 of the 62 homes for sale are priced below a half million dollars with a mere twelve asking less than $400,000. The priciest home sale in July was $420,000. As prices inflate, the audience shrinks.
The pricing distribution of the condo inventory is considerably more favorable with two thirds of the units offered priced at or below $400,000 with 95 of those asking less than $300,000. Over half of the units that sold in July were on the market for less than 60 days with twenty seven of those sold in less than a month. About half of the units for sale have been on the market for 90 days or more. Seller optimism remains high. Those that price close to fair market value sell fast absent some unusual circumstance. About half the July condo buyers used a mortgage and the other half paid cash.
Happy hunting to those hoping to purchase and, as always, be prepared to move quickly when an attractive target has been acquired. You have competition looking for the same thing.
"I don't mind you thinking I'm stupid, but don't talk to me like I'm stupid." __Harlan Ellison
Wednesday, August 01, 2018
Phony multiple offers. This one will not die. I dread hearing the frightening phrase, "We have multiple offers. Bring your best and highest offer." The most common response from a buyer is "Do you think there really is another offer?" The second most common response is, "Withdraw my offer. I'm not playing that game." It is this second response that makes phony offers a risky strategy for a listing agent. She stands the chance of chasing away a legitimate buyer by fabricating a phantom offer. I have seen both buyers offering on the same property withdraw when asked for best and highest. For this reason, I never doubt the existence of another offer even if the property has been on the market for months. It's just too risky. This leads to the next myth;
Agents on both sides push for higher selling price because they'll get a higher commission check. Think about this. No sane agent would jeopardize a sale in hopes of getting a couple percent on an extra few thousand dollars. Parties to a real estate transaction can rest assured that the agents want the deal to close, otherwise they get nothing for their efforts.
Agents not showing low commission listings. This is probably at least somewhat true. There is a local broker who often (possibly always) pays out less to the buyer's broker than he keeps for himself unlike the majority of listings which share the commission equally between listing and selling (buyer's) broker. I don't exclude his listings from showing lists but I resent the fact that he cheats buyers' brokers while being so difficult to work with. I imagine some other buyer's agents will gladly skip his listings should the schedule necessitate excising some properties from their list. Sellers, make sure you know how the commission you agree to pay your listing broker is being shared. I suspect some sellers don't realize that their broker is offering an unequal split possibly affecting the exposure their property gets.
Open houses only benefit agents. Absolutely not true. I have sold several properties at open houses and know of multiple other sales that happened because of an open house. Yes, a good agent will take advantage of an open house to get prospects who find the open property not suited for them but who are looking to purchase something in the area. That doesn't mean that the next person through the door will also find it unsuitable. Sellers, remember. You're only looking for one buyer. In fact you can only accommodate one buyer. Side note; don't worry about nosy neighbors coming over just to check out your stuff and get free food. They may very well have a friend or relative moving to the area who'd like to live nearby. They aren't hurting you and may be the source of the eventual buyer.
Listing agents play games with listings to increase their income. This one is at least sometimes true. It can be as innocuous as legally delaying entering a listing into the MLS in hopes of finding a buyer first or sharing an upcoming listing within the agent's brokerage in hopes that both sides of the commission will stay in the listing office. Or, it can be unethical and/or illegal as in the recent case in Miami where a prominent agent team was discovered to have been entering incorrect neighborhoods for their listings to keep other agents from finding and soliciting the listing upon expiration. This one was definitely not in the clients' best interest if other agents couldn't find the listings. It devolved into something far worse than the initial MLS trickery and now one broker finds himself facing a possible 30 years in prison.
And now for a couple of items of good news: Cocoa Beach's Freedom Seven Elementary School has once again been named the number one elementary school in Florida by the Florida Department of Education.
NOAA Fisheries has announced a brief red snapper season in Atlantic federal waters for recreational anglers. We will be allowed to keep one fish per person per day of at least 20" in length for two weekends only (Friday, Saturday, Sunday) on the following days: August 10, 11, 12 and 17, 18, and 19, 2018. Good luck everyone and hope your one fish is a sow (over 20 lbs.) although I'll settle for a top of category Cadillac (10 to 20 lbs.).
I see the bad moon arising
I see trouble on the way
I see earthquakes and lightnin'
I see bad times today
___________________Creedence Clearwater Rivival
Saturday, July 14, 2018
Those looking for a unit in an oceanfront building have a decent handful from which to choose at the moment. There are three one bedroom units asking less than $200,000 in oceanfront buildings this morning. If two bedrooms are a must but an ocean view is not, there are several possibilities directly on the beach under $300,000. For those who must have an open ocean view and at least two bedrooms, there are several offerings under $400,000 in older oceanfront buildings.
As always, if anyone has questions about properties or the Cocoa Beach and Cape Canaveral market, I am happy to try to help. Feel free to contact me.
"I'll stop wearing black when they make a darker color." _Fall Out Boy
Monday, June 25, 2018
Condo inventory in the two cities stands at 233 existing units this morning with another 50 single family homes offered.
Sales have been slow with only four homes and forty condos closed so far in the month of June. Some of the oceanfront condo sales of note included:
A luxurious 10 year old 4th floor direct ocean 3/3 at Ocean Paradise in south Cocoa Beach with 2134 square feet and a one-car garage that closed for $685,000 or $321/sf. Furniture was marked as "optional/negotiable" in the listing and may have been included but we'll never know as the listing agent did not disclose that detail when closing the listing. I don't blame her as no agent in our market ever does but it would be nice to know for other agents and appraisers using the sale as a comp to value another property.
An updated 5th floor direct ocean Palmas Majorca 3/2 in downtown Cocoa Beach with 1801 square feet and a one car garage that closed for $550,000 or $305/sf. Again, furniture may have been included but...
A nicely remodeled 5th floor SE corner direct ocean 2/2 at 2100 Towers with 1600 sq.ft. and a one-car garage that closed for $530,000 or $331/sf. Again; furniture? Maybe.
A remodeled and fully furnished (confirmed-yes!) direct ocean 2nd floor Waters Edge 3/2 in south Cocoa Beach with 1753 sq.ft. and one garage spot that sold for $440,000 in 3 days. Only brought $250/sf probably because of the somewhat obstructed ocean view due to high dune vegetation there.
Three different Mystic Vistas 3/2 units with ocean views ranging from none to a peek, some with furniture, some undisclosed at prices from $167 to $210 a square foot.
An original condition, furnished 6th floor Canaveral Towers 2/2 with 1145 square feet and an expansive south ocean view and a carport that closed for $340,000 or $297 a foot. These weekly rental units bring a premium because of the income history and/or potential.
An updated and furnished ground floor direct ocean Windjammer 2/2 in Cape Canaveral with 1196 square feet and a one car garage that closed for $320,000 or $267/sf.
We've settled into our summer pattern of hot and humid with afternoon thunderstorms most days. The reliable sea breeze has been doing a good job of keeping temps in a pleasant range close to the beach. Conditions have made offshore fishing pleasant with mixed species being caught. Giant tarpon and monster jack crevalle are following schools of pogies just outside the surf zone up and down the beach. It's a catch of a lifetime with either for most anglers. While some big grouper are being caught in deep water, the American Red Snappers are so thick that it's hard to get a bait through to a grouper. We could have caught as many of these pictured below as we wanted last weekend but unfortunately, they are off limits because of their "endangered" status.
“Oh, pour me another drink
And punch me in the face
You can call me Nancy” __Josh Tillman