Humphrey come home - He's on the way

Good news, bad news. Good news first. Humphrey has been located. Bad news; because he was found wandering late at night by a couple as they were leaving town for vacation, he is presently taking a vacation in North Carolina with two shelties but will be home soon. We are all very happy.

Captain Hiram's

Captain Hiram's on the mainland at Sebastian, a fun boat ride lunch destination from Cocoa Beach via the ocean or the river.

Three weeks into July and 19 MLS-listed condos and townhomes have closed in Cocoa Beach and Cape Canaveral. Prices have ranged from $28,000 for a 1/1 short sale in Cape Canaveral, three blocks from the beach to $305,000 for a remodeled partially furnished 3rd floor 2/2 direct ocean unit at Ocean Pines in Cocoa Beach.

An interesting observation about the sales so far is that the six highest prices were all direct ocean 2/2 units above the ground floor in older buildings and none were short sales or foreclosures. Prices ranged between $250,000 and $305,000. This type of unit is the bread and butter of our market. Anecdotally, there seems to be more demand for direct ocean 2/2 units than any other condo type in our market. While prices for this property type have eroded along with the general market, the degree of depreciation has been less than other property types that experienced overbuilding during the boom years. Consider the many Cape townhomes built in the last 6 years that are selling for a third of their new price, e.g. Portside, Perlas, Sea Spray, etc.

The direct ocean buildings built in the last ten years have not included any two bedroom units. The trend during the boom was to build bigger, more luxurious units with at least three bedrooms. The norm in the years before 2000 was to build a mix of mostly 2/2 units with a few 3/2 units. Those older units are filling the niche for buyers wanting direct ocean but unable or unwilling to pay $400,000 plus for a big newer unit. If this is your target property type be aware that other buyers are becoming comfortable with the current prices levels and are contracting and closing these units in this apparent sweet spot range of mid $200s to low $300s. Expect to pay slightly more for nicer units.

"I definitely don't think that I'm hot doo-doo. I don't."
_________Drew Barrymore

Lazy days of summer

I'm guessing that by now most of the stragglers have updated their listings. The number of Cocoa Beach and Cape Canaveral MLS-listed condos and townhomes closed in the month of June is at 44 units as of this morning. None of the late arrivals exceeded the high number for the month which was $430,000 for one of the bank sale Ocean Club units.

Sales are plugging along so far in July with several nice direct ocean units closing last week. These included an upgraded and fully furnished 3rd floor Ocean Pines 2 BR, 2 BA with garage that closed for $305,000. A top floor (7th) Windward East, Sand Dollar floor plan (wide living room with two sets of sliders) 2 BR, 2 BA with garage went for $299,000. A big 5th floor 2 BR, 2 BA unit with garage at Wavecrest in south Cocoa Beach sold fully furnished for a surprising $276,500. That qualifies for "smoking deal" status. In Cape Canaveral, a super nice, remodeled Canaveral Sands 2/2 with garage sold unfurnished for $260,000.

Off the ocean a short sale Portside Villas 3 BR, 2 BA has closed for $105,000. It sold new four years ago for $239,000.

As prices have retreated, I've been seeing first right of refusal being exercised more frequently. This process deserves to be misunderstood as it often is. What it usually means (in our area) is that a contract for sale of a unit is offered to all the current owners who have the right to match the contract and purchase the unit themselves under the exact same terms of the original contract. Some associations mail the contract to all owners and some simply post the contract in the lobby or common area. (Not optimal for out-of-town owners.) Time periods are typically in the 10 to 14 day period during which time an owner intending to exercise his right must declare his intentions and present a matching contract. Should more than one owner declare intention to exercise, the condo docs spell out the process for determining priority. Some associations use numerical proximity while others decide based on physical proximity of units. Others let the seller decide which contract to accept. The end result is that the original buyer is out. It's not fair but it is the way it is.

One unintended side effect of the process is that all owners are aware of a contract price even in the event of a failed sale. I can think of one unit in south Cocoa Beach that is on the market for $25,000 more than the posted contract that failed. All the owners in the building and clued-in agents who perused the bulletin board during the posting period are aware of what those sellers were willing to accept. They are understandably upset at the process.

We saw asking prices in another large complex domino down when a low-priced contract went out to the owners a couple of weeks ago. If you're offering on a unit in a first right complex be aware of the chance of losing your contract.

"You can have anything you want,
But you better not take it from me."
______Guns n Roses

June Numbers

Cocoa Beach from the east.

The real estate market in Cocoa Beach and Cape Canaveral is not typical. With condos and townhomes making up the majority of sales here, investment and 2nd home purchases dominate the activity. While other more typical markets benefitted from the first time homebuyer credit, we didn't get the boost that some may have expected. Our June sales were right in line with last year's numbers with 39 closed sales of MLS-listed condos and townhomes in the month in the two cities compared to 41 in 2009. That number will likely wind up equal to or higher than last year's as lazy listing agents and inefficient offices get around to updating listings in the MLS that actually closed in June.

In going through the numbers of closed sales and recent price reductions, I'm getting a sense of renewed downward pressure on prices in some market segments. The bank liquidation of the Ocean Club building will likely negatively impact the troubled high end market as eleven buyers in the luxury market are now out of the picture having purchased there. There is one unit left in that building now, $849,000 for a 4565 square foot penthouse, not a great deal for a unit with a big chunk of it's ocean view obscured by the Coral Seas building immediately east.

Eleven of the closed condo sales in June were for less than $100,000 and none exceeded $430,000. Eleven of the total were short sales and nine were bank owned. It doesn't take Miss Cleo to figure out that with that level of distressed sales happening, unrealistic sellers are not going to find a buyer. Sellers take note: you are competing with the banks for buyers and you must accept that aggressive pricing is paramount in selling your property. If you're looking to buy, as always, define your wants, line up your purchase money and be ready to move when a priced-right property matching your criteria becomes available. I'd also advise being aware of current closed prices for your property type. Throwing out unresearched lowball offers hoping for a miracle is not a purchasing strategy. If you can't substantiate your offer price, you are probably wasting your time. Focusing on getting a big discount to asking price rather than getting a good deal may cost you a deal on an aggressively-priced property. I've said this before but it bears repeating. A strategy of offering an arbitrary percentage of the asking price is stupid. Nothing matters but the final purchase price and some asking prices are more realistic than others.

"An investment in knowledge pays the best interest."
______Benjamin Franklin