How Much is Too Much?

I was reading an article in the Tampa Bay Times about the startling new flood insurance increases and was looking at their posted chart (left) when I noticed the zip code at the top of the chart, 32931. What is this, surely a typo or a mistake? 

[Click the chart for a larger image.]

The new rates that were announced this week put Cocoa Beach in the number one position as getting the highest increase of any zip code in Florida. Those with existing flood policies have a little breathing room as premium increases are capped at 18% per year for them but those buying a new flood policy will see the full rate at purchase. This new Risk Rating 2.0 as FEMA calls it went into effect last April and the intent is to price policies based on actual risk. Many Floridians have gotten away with unrealistically low flood premiums in the past but that era has ended. 

The reported increase for new national flood policies for affected properties in Cocoa Beach is 761%. Flood policies in Cocoa Beach that were less than $1000 before this year will now cost over $6000 a year on average. Note that flood insurance is typically only required by lenders for homes that are in an at-risk zone, which is a minority of homes in Cocoa Beach. Those looking to buy a home here need to check for flood zone status of the properties they're considering and to include the cost of flood coverage if they're buying in a flood zone. Note that these increases are for federal flood insurance only and don't affect regular homeowners and wind coverage rates which are set by the insurance companies. Properties in at risk zones will typically be required to carry flood coverage by their mortgage holders as are those with homeowners' policies from Citizens which now requires all policy holders to also have flood coverage.

You can search for flood zone status for specific addresses in Brevard County at the County's Flood Map below.

Current Effective Brevard County Flood Zone Map

A good summary from the Tampa Bay Times here who also posted the chart above.

"Experience is making the same mistake over and over again, only with greater confidence." _unknown

Mini Slow Season

May is traditionally one of our two slowest months for real estate in Cocoa Beach and Cape Canaveral, the other being October. Sales remained strong in April as properties contracted earlier during the spring season closed while inventory remained practically unchanged. 

During April there were 76 closed residential properties, 63 condos and townhomes and 13 single family homes. Lowest price paid for a single family home was $535,000 for a 2965 square foot 5/3 in Cape Canaveral that needed some TLC. Median price was $810,00 with five sales over a million and the top dollar sale was a beautifully remodeled direct oceanfront two story in south Cocoa Beach with 3670 sq ft with six bedrooms and 4½ baths and a pool that closed for $3.17 million. 

Median selling price for condos was $385,000. Lowest selling price in the month was $75,000 for a tiny studio in Cape Canaveral far from the beach. Highest selling price for condos was $950,000 for a gorgeously remodeled and fully furnished 5th floor corner direct ocean Crescent Beach Club in south Cocoa Beach. It is a 3/2 with 2278 square feet and a single garage. Slightly over half of the condo sales were cash and median time on market was 24 days. More than a thrid of the sold units were on the market less than two weeks.

Selling prices remain high with eleven condos bringing over $400 per square foot although prices have declined in several popular complexes. Notably, among the weekly rental complexes, a Sandcastles 2nd floor 2/2 side unit closed for $515,000 while a 7th floor Canaveral Towers 2/2 sold for $550,000. My vote for most notable sale of the month was a remodeled and furnished 5th floor direct ocean Royale Towers Sand Dollar 2/2 that closed for $655,000 or $476/sq ft. That's a remarkable price for a unit in a complex with a two month minimum rental restriction. More remarkable prices are happening at The Diplomat in Cocoa Beach where 60 year old, 2/1 units with no garage and no ocean view have closed over the $300,000 mark.

Activity seems equally spread over all price ranges both waterfront and not. Buyers are still active and attractive units in good buildings are still commanding high prices and selling quickly. We usually see activity increasing as we enter the summer months and with the current inventory levels multiple offers will likely continue to happen with attractive new listings. Buyers paying with cash will continue to win most of these multiple offer situations. Good luck to all hoping to purchase. Make your offers as clean as possible with as few contingencies as you are comfortable with for your best chance at success. Those looking for a deal are likely to be disappointed.

Florida, among six other eastern states, just recorded the hottest January through April season ever experienced. I can confirm that the heat is here in Cocoa Beach. What is not here is the much-hyped "super blob" of seaweed that the media has been warning us about. It may eventually arrive or it may pass by in the Gulf Stream if it doesn't coincide with easterly winds as it passes. We get sargassum on our beaches every year and always have. Some years it is so thick that the beaches are covered and you have to wade through a pile just to get to the water. Some years there is very little. It's always passing by in the Gulf Stream during summer but it needs sustained easterly winds to get onto our beaches. Beaches in the Yucatan are dealing with piles of it now and our turn may come. It's a natural thing and something that most see as little more than a temporary nuisance. It will disappear like it always has. For those walking the beach when the seaweed is washing ashore, take the time to pick up small pieces at the water's edge and shake them out over the sand. You might be surprised at the creatures that fall out that ride with it, shrimp, crabs and an occasional sea horse among others. 

Congrats to all graduates. Enjoy your summer as you get ready for the next stage of your lives. Best of luck to you all.

“If you aim at nothing, you’ll hit it every time.” _Butch Harmon

In-Between Season

There are only two houses for sale in Cocoa Beach and Cape Canaveral asking less than a half million dollars. Median asking price of the 25 houses for sale in the two cities is over $800,000. Of the 134 condos and townhouses currently for sale only 11 are asking less than $200,000. Median asking price is $440,000 with 46 units asking over a half million.

Thirty units have closed so far in April, seven of those bringing over $400 per square foot and another eleven over $300/sq ft. Shocking high selling price of the bunch was a 5th floor, furnished, direct ocean Royale Towers 2/2 Sand Dollar unit that closed for $655,000 or $476/sq ft. The three vacation rental units closed so far this month brought an average $404/ sq ft, none of them direct ocean, east facing units. Prices for vacation rental units have pulled back from last summer's levels with lower closing prices in three of our biggest vacation rental buildings. Many of the units still for sale in these buildings have asking prices that are completely out of sync with recent selling prices. Those hoping to buy a vacation rental unit would be well-served by knowing the prices of recent sales. They are considerably lower than the same units were selling for last summer. 

Speaking of asking prices, over half of the units closed so far in April were on the market less than 30 days. Of the 134 units still for sale over half have been on the market longer than that with 53 of them for sale longer than 60 days. That seems to suggest widespread overpricing. Buyers, know the comps, and don't overpay just because the seller is out of touch. Make the case for your offer with recently sold comparable properties and if the seller refuses to acknowledge reality, move on to one who is open to reason. The sellers who are pricing correctly are the ones selling. The optimistic bunch will continue to stagnate on the MLS until the reality check comes.

The bulk of the snowbirds have departed and traffic, other than the air show traffic this past weekend, has returned to its more leisurely off-season pace. From now until June is one of our two good-weather, no-crowd seasons. The other is Labor Day until Thanksgiving barring a hurricane. Things will heat up again as schools begin letting out for summer in late May and our summer vacationers start arriving.

"Twitter is such a mess, it’s as if they drove a clown car into a gold mine..." _Mark Zuckerberg

Peak Season

My corn plant, Dracaena fragrans, bloomed again this winter for the third or fourth time in over 25 years. The sweet scent of these blooms, which open a few every night for about a week, confirms the Latin name. There is never a clue from year to year whether this one will be a blooming year. It's always a December surprise and a welcome one.

Halfway through March and the real estate market in Cocoa Beach and Cape Canaveral is quite active with 42 condo units receiving an accepted contract so far in the month. Half of the units getting a contract had been on the market for over 45 days, all but three of them with reduced prices, most of those reductions substantial. What this tells me is that sellers are starting to realize that last year's high prices aren't working and they are dropping prices to attract buyers and it's working. Only two of the contracted units in March that had been on the market for less than 45 days had reduced prices. This supports the idea that priced-right properties will sell quickly in most cases. 

There are 137 existing condo and townhouse units for sale this morning in Cocoa Beach and Cape Canaveral. Half have been on the market longer than 45 days. There are 22 existing single family homes for sale in our two cities. Two thirds of them have been on the market longer than 45 days. So far in March seven homes have received an accepted contract. That means we currently have about a two month supply at the current sales rate. New listings for all residential property types seems to be matching the sales rate keeping inventory numbers relative stable, although low.

For those hoping to purchase, there is still competition and multiple offers have not gone away especially for desirable properties. Selling prices in several condo complexes have pulled back from last year's high numbers and that trend seems persistent so there is a nugget of hope for prospective buyers. We have yet to see any impact from the looming inspections, structural reserves and reserve study requirements but it is getting closer. Stay tuned. 

Those visiting our area during March, which is our peak season, may have a distorted view of what life is like here. There is a convergence of spring breakers, baseball teams and snowbirds that makes March the busiest, craziest, most crowded month of the year for us. After Easter we revert to our much more sedate normal pace. I would encourage those who have only visited during the spring to return at some other time to get a more balanced picture of what Cocoa Beach is really like. On second thought, please take my word for it. No need to waste a trip here just to see us during slow season. Cheers.

“It says here in this history book that luckily, the good guys have won every single time. What are the odds?” -Norm MacDonald

Mixed Expectations = Mixed Results

The expected slowdown in real estate sales in Cocoa Beach and Cape Canaveral has failed to materialize. In fact activity has picked up and inventory has pulled back. That is not unusual in our market in the spring months but is a little surprising considering the steadily slowing sales and growing inventory since last summer. 

Inventory of condo and townhome units peaked at 148 units a few weeks ago and stands at 135 units for sale this morning in our two cities. A total of 110 units have gone under contract since January 1 so we're moving at a pace of two sold units a day at which our current inventory will last 67 days. 

Sixty one units have closed since the beginning of the year, 64% of them for cash. As mortgage rates have gone up so have the number of cash sales. With the national average 30 year fixed rate mortgage at 6.77% it's a prudent decision for some buyers with savings to use those savings for their purchase. When rates were less than half that it made sense for many to just borrow the cheap money for the purchase. Our percentage of cash sales dropped to just above 50% during those 3% mortgage days.

Of our 61 sold units over half sold in less than a month, 16 of them in a week or less. Median days on market was 21. Twelve units sold at or above original asking price, none of them lasting more than nine days on the market. Of the 23 units that took longer than a month to sell, all but four reduced their price before finding a buyer. Out of the 14 that took over two months to sell, all had reduced their original price and sold for an average discount of 12% to their original asking price.

Fifty of the current 135 units for sale have been for sale for longer than two months, twelve of them without price reductions and three with increased prices. Hope springs eternal but the stats in the previous paragraph would suggest that these sellers will not be finding buyers without coming to terms with their overpricing. A fair number of listings on the market for less than two months are similarly overpriced but haven't been for sale long enough for the market's indifference to sink in. 

There are 24 single family homes for sale in our two cities, a third of them for sale less than a month and a third on market for over six months. The single family home market is more sensitive to mortgage rates than the condo market so I'm guessing the higher rates are responsible for some of this. Only 10 homes have closed since New Years Day with a median selling price of $588,000.

Good luck to those who are hoping to purchase. Know that there are a lot of sellers with unrealistic expectations and try to spend your efforts on those who are priced fairly. There continues to be competition for desirable and fairly-priced properties and multiple offers are still part of the landscape for those properties. Make your offers as clean as possible and know when to walk away. Except for unique properties, there will always be another one.

“If I knew that I was going to live this long, I would have taken worse care of myself.” __John Daly

Optimism vs Reality

There were 33 condos and townhouse that closed in the month of January 2023 in Cocoa Beach and Cape Canaveral. Highest price paid was $760,000 for a 16 year old 3rd floor corner in south Cocoa Beach at Garden by the Sea. It was direct open Banana River and had 2405 square feet with two garage units. At the other end of the scale were eight much older, smaller units that closed below $200,000, all but one of them in Cape Canaveral. 

I don't remember ever having a month in which there were no direct ocean, east-facing units sold. Direct ocean units are the bread and butter of our market and it's surprising to see them missing from the sold list. Highest price per square foot paid were two small units with peeks of the ocean in oceanfront buildings that allow weekly rentals, Royal Mansion and Cape Winds. Both units sold furnished and brought over $500 per sq.ft. Meanwhile, seven of the remaining twelve weekly rental units currently on the market have been for sale for more than 100 days without selling. Only two of them have lowered their price during that time in response to the market's indifference. There is a shared reason for their stubborn optimism.

That reason is the handful of jaw-dropping, high selling prices last year among the weekly rental buildings. Every one of those high sales was a unit with a strong rental history and a stream of future bookings already in place. The new owners closed and assumed the income stream if they stayed with the same management. The stubbornly optimistic weekly units languishing on the market are shooting for similar prices but they lack the rental histories to justify their asking prices. While any comparable unit with similar views and amenities has the same potential for income, buyers are resistant to high asking prices without a solid track record. A unit with $40,000 of rental income last year shouldn't expect to command the same selling price as a similar unit that brought in $100,000. We have not seen this disparity among selling prices of non-rental units in other buildings.

Inventory has increased to 143 units for sale in our two cities. The highest four asking prices per square foot are in weekly rental buildings, all asking over $600 per sq,ft, but only one with a rental history that would justify the price. There are 45 other units asking over $400 per square foot only a few of which I would consider fairly priced at their asking price. Cash sales represented 79% of January's sales. Those who are currently looking to purchase in our market may have a little more leverage than they had last year, at least with the older listings that are over-priced. Note that there are still quite a few sellers who are expecting to get what their neighbor sold their unit for last year even though those prices may not be realistic in February 2023.

Downtown Cocoa Beach has transformed over the last few years with a new fire station, new police station, parking garage and now demolition of City Hall. Around the corner the luxury condos at The Surf on the ocean are approaching completion while next door and across the street existing buildings have been demolished to make way for new structures. There is a new building well underway on the site of the old Barrier Jacks and demolition on the International Palms (the old CB Holiday Inn) has begun. It's a time of change for our little beach town. Oh yeah, the snowbirds are here with all that entails. Welcome back and enjoy.

"When you’re accustomed to privilege, equality feels like oppression."

The Year of Reckoning

Shuttle on the pad in 2011

There are 135 existing MLS-listed condo and townhouse units for sale this morning in Cocoa Beach and Cape Canaveral plus two units at The Surf, the almost-completed, new oceanfront building in downtown Cocoa Beach. New contract activity so far this year has been slower than we enjoyed through most of 2022 with only twenty two units going under contract since Jan. 1. During the same time 35 new condo listings hit the market. Sales activity typically spikes February through April every year so we'll have to wait to see if sales can overtake the flow of new listings during that period. Condo inventory got as low as 34 units for sale last March because of strong sales during that time. Half of the units for sale right now have been on the market for two months or longer including a bunch of weekly rental units that were selling like hot cakes last spring and early summer but have since cooled considerably. The AirBnB investment hysteria of 2022 appears to have lost momentum. 

As condos begin performing their newly mandated structural inspections and reserve studies this year I expect to see an increasing number of new condo listings as the impact becomes apparent. I think that impact will include lower selling prices. That's not a guarantee but higher monthly fees for most condos is almost a certainty. Those who live in older buildings with unaddressed concrete issues would be well-served to be thinking about how much the new structural reserve fund will add to their fees. Concrete restoration is costly and buildings that already have well-funded reserves will not escape the impact of the new reserve accounts. Prospective condo owners should include the possibility of substantially increased fees as part of their purchasing decisions. 

The launch of the Falcon Heavy yesterday evening was spectacular and the two boosters were visible  from separation to landing at the Cape. Next launch is Wednesday morning.

"Tell people what they want to hear and you can be wrong indefinitely without penalty." _Morgan Housel

REMINDER: Condo Registration Due Dec. 31

 All condos in Cocoa Beach and Cape Canaveral with at least one building over two stories must submit their registration to the State by the end of this year, Saturday, December 31. It's very simple and can be done online (link below). Do not miss this first step in compliance with the new legislation passed in July. It is not optional.

• 718.501(3)(a), F.S./Senate Bill SB 4-D requires all condominium and cooperative associations with buildings 3 stories or higher to report the following information to the Division of Florida Condominium, Timeshares and Mobile Homes on or before January 1, 2023.

  • Contact Name, Phone Number, and Email Address
  • Name of Project
  • Project License # ( To find license # please click here)
  • The number of buildings on the condominium property that are three (3) stories or higher in height.
  • The total number of units in all such buildings
  • The addresses of all such buildings.
  • The counties in which all such buildings are located.

  You may provide your association's information to the Division by simply completing and submitting the Building Reporting form below. You may also submit this information via email at: ctmhbuildingreporting@myfloridalicense.com or by USPS mail or hand delivery to:

  Division of Florida Condominiums, Timeshares and Mobile Homes
  Attention: Building Reporting
  2601 Blair Stone Road
  Tallahassee, FL 32399-1030

• "Ever thine. Ever mine. Ever ours." __Ludwig van Beethoven