Friday, July 23, 2010

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


  1. tommyfudster said ....

    Often wondered why all the developers moved to 3 and 4 BR condos about the same time but suspect it is due to the economics of land prices combined with building height restrictions and fewer parcels of available suitable land. In my mind, going from 2 to 3 BRs changes the character of a condo from a part time beachhouse to a full time residence. The long term question is whether or not a significant number of retirees will opt to sell their single family residences and purchase the larger condos for an all year residence or continue to downsize to 2 BR units. Many will continue to keep their single home residence and a winter beach condo and one would think most of those will probably stick with 2 BR units.

    In your opinion, is there any long term hope for the larger 3 and 4 BR units given the glut of new, unsold units?

  2. The bigger newer units have a long road ahead. There is just too much unsold inventory and too many underwater owners to have any expectations of a near-term recovery in that segment of our market. Different story in the property types I discussed in this post.