Sunday, May 15, 2011

The final frontier

Endeavour on the pad and ready to fly.

[update] In the air (above) as seen from south Cocoa Beach May 16, 2011.

Space Shuttle Endeavour is scheduled to blast off tomorrow morning on it's last mission and will be followed by the Shuttle Atlantis in early July which will mark the last flight ever for the 30 year old shuttle program. I thought I'd reopen the topic of the impact of that ending as the Blogger outage last week interrupted the discussion happening in the comments to the last post.

I'm asked all the time how I think the end of the shuttle program and the loss of jobs will affect our real estate market, specifically Cocoa Beach. Predicting that impact is not as straightforward as first glance would suggest. President Bush made the news official six years ago when he announced that the program would end in 2010, so, it's not like thousands of rocket scientists will suddenly learn of their layoff the day of the last launch and will put their houses on the market driving prices down in whatever area they happen to live. The first pink slips were issued last summer and plenty of former shuttle workers are already gone or still here looking for or working another job. I think the moving parts we need to consider to speculate on the impact or lack thereof include the following:

  1. How many of the yet to be laid-off workers live specifically in Cocoa Beach and Cape Canaveral?
  2. How many of those will stay put either retiring or seeking another job locally?
  3. How many of those will sell their homes and move from the area seeking employment elsewhere?
  4. How many of those have already sold their homes in the six years they've known it was coming?
  5. How much of the last few years' significant drop in property prices is due to fear of the impending end of the shuttle program, in other words, how much price drop is already "baked in"?
  6. Do enough shuttle workers own beachfront condos to have any effect on that particular market?
  7. For a buyer looking for a Florida beach getaway or investment condo (and undecided about the exact community) is the local employment picture a factor or is it all about what X dollars will buy?
  8. How much of our market is 2nd home and investment property compared to primary residence?

These are certainly not all the questions we need to be asking to make an informed prediction, just the ones that stand out in my mind. I do know the impact on some businesses in some areas of Brevard County will be and already has been significant and I sympathize with those affected. I welcome comments and speculation on the specific issue of the impact on the Cocoa Beach real estate market in the comments below.

30 year fixed rate mortgages are at an average 4.63% this week as reported by Freddie Mac . Even so, 75% of our condo and townhome sales in April were cash deals. Total MLS condo inventory in Cocoa Beach and Cape Canaveral stands at 397 units this morning.

That's why the most respected greybeards often aren't the guys pounding liquor under the pier every day or quitting multiple jobs to chase swells. They are the ones making short term sacrifices that guarantee they'll paddle out the next day and the day after. ___Matt Walker Surfer Magazine


  1. We rented a unit at the Ron Jon Caribe Resort a few years ago. Had a West view balcony. 2 AM launch time for the shuttle. What a sight--something we will never ever forget. You really have to see it live to feel the breath taking beauty of a shimmering ball of fire driving toward the heavens.

  2. Woops---Make that a north east view----

  3. Larry
    I'm inclined to agree with your points, but I think you may have stopped a little short. The CCB area is in the unique position to offer the ocean, weather and a certain culture which is a product of the Space Program Employees. I'm sure it doesn't hurt that several hundred thousand people flock to the area several times a year to see the launches. Along with them they bring a lot of $$ which I suspect are spent in businesses who's owners do live in those ocean front condos. You are in a better position than I to comment on the impact on the local economy the 2 times the launches stopped for extended periods after accidents

  4. Last time the program was suspended was in 2003-04 and it lasted for 19 months. That was right in the middle of the boom so if there was any impact on the market it was impossible to tell. I certainly agree that any business owner who relies on the three or four shuttle launches a year for survival, if there are any in that category, will be in a world of hurt after next month. How many, if any, of them or their employees will be hurt enough to have to sell their homes and how many of those live in Cocoa Beach or Cape Canaveral specifically? I can't answer that. The loss of income to our area is going to have many effects. Will further property value loss (specifically in Cocoa Beach and Cape Canaveral) be one of the effects? That is the question that interests me.