Tuesday, May 24, 2016

Seven Days in May

I thought a snapshot of the last seven days in the Cocoa Beach and Cape Canaveral real estate market might be interesting. I was expecting to find less activity than I did. In the seven days since last Wednesday, May 18, twenty nine residential properties have gone under contract in our two cities, five of those single family homes. Ten of those properties were on the market less than two weeks.

At the other end of the spectrum, one of the condo units received an accepted contract after being on the market for eight years with eleven price changes. The asking price when contract was accepted was $165,900. At one time during the eight years they were asking $290,000. This is a classic example of denial being dragged kicking and screaming into acceptance of reality. Price it right and it will sell. Some sellers take longer than others to accept that.

During the same seven days, twenty properties closed, nine of those for cash. Prices of the closed properties ranged from $69,000 for a one bedroom Marlin Apartments unit to $785,000 for a beautiful open water single family home in Cocoa Beach. One of the closed condos was another long-listed unit that has been on and off the market since 2008. It was listed for $1,195,000 in 2008 with gradually reducing prices until it closed fully furnished for $690,000 last week. At $318 per square foot, that should be a reality check for the other units in that building asking far above that number but I'm guessing it won't.

I attended one of the more memorable and lengthy closings of my career last week. The closing agent was slower than most and took about twenty to thirty minutes to read through the settlement statement and loan documents while the buyers signed. Sellers had signed earlier and weren't present. When she finally finished I questioned whether the May condo fee had been paid by the sellers since there wasn't a credit on the settlement statement. She responded that she didn't know and would have to find out. First time for everything but shocking nonetheless especially considering that a condo's management must complete an estoppel for every sale showing what a unit owes the association if anything on day of closing.

She left the room closing the door and we discussed what the difference would be. If sellers had not paid May's fee they would owe the buyers $288. If the sellers had paid May's fee, the buyers would owe them a refund of $182 for the remaining twelve days of May. Twenty minutes later the closing agent returned and said that she had forgotten to add the condo fee to the statement and that the buyers owed $16 to the sellers. Huh? The buyers gave her a $20 bill and she disappeared again to get change. Another twenty minutes passed without a peep so I went roaming the halls of the attorney's office and found her in a back room. She said that the lender was preparing a new disclosure reflecting the changed amount. I returned to the closing room and when she came in a little later with the new disclosure and the $4 change I asked how she came up with $16 for 12 days of a $470 fee. She responded with "Can we just let it go and sign this as it is?" She admitted that she had made a $1500 error on an earlier closing that day. We exited the office two hours and ten minutes later for a closing that should have taken less than thirty minutes and that was completed with an acknowledged error on the statement.

Our takeaway: Buyers, sellers and agents (when you are allowed a copy) please read the settlement statement carefully. Mistakes happen. Sellers agents I would ask that you choose the title company/closing agent carefully. Most are professional and pleasant but there are a few out there that are difficult and can make closings feel like torture. Another story next post involving two title companies (one good, one bad) and another difficult closing.

“Never interrupt your enemy when he is making a mistake.” __NapolĂ©on Bonaparte

Saturday, May 14, 2016

Sell in May

Beautiful palm tree bloom at the Cocoa Beach Country Club.

Property sales in April in Cocoa Beach and Cape Canaveral, while brisk, declined year over year for the fifth consecutive month. The record low inventory levels we hit last summer were impacting closed sales numbers by year's end. We have since recovered somewhat in number of properties for sale but still remain well below historic levels. There are 296 condos and townhomes and 71 single family homes for sale this morning in both cities. As I've mentioned before, many of those properties are so overpriced as to be "not really for sale".

In the month of April there were 16 closed sales of single family homes. Median price was $300,000 with all of the upper half waterfront. There were 66 closed condos and townhomes with a median price of $186,000. Half were cash deals. Only two condos closed for more than $300 per square foot. One was a luxurious fully furnished direct ocean Meridian 3/2 and the other was an 844 sf Chateau that squeezed over the $300 mark because of the math of the smaller than average size. Most direct ocean units above the ground floor closed between $235 and $300 per square foot. That fact has not settled into many seller's reality. Hopeful sellers of direct ocean units take note: Units commanding above $300 have been in exceptional condition and usually fully furnished or way below average size as in the case of the Chateau unit. There are 25 units currently asking over $300 per square foot, four of them over $400/sf. In my opinion, only six of the 25 are worth above the magic $300 number and none of them over $400.

Unless we have a strong second half of the month, May sales look to fall well below last year's 71 units. Prices, however, continue their slow upward trajectory in spite of the slowing number of sales. Those looking to buy, as always, need to be able to distinguish those properties that are priced within striking distance of fair value. It is possible to waste a lot of time and energy looking at nice but overpriced property.

The weather in Cocoa Beach the last few weeks has been about as good as it gets. Light winds, moderate temperatures, warm ocean water and a lingering small longboard swell. Add the absence of crowds and it is everything one expects in a small Florida beach town. Today's forecast; sunny with a high of 80 and light variable winds. Superboat races tomorrow offshore Cocoa Beach between the Pier and Lorrie Wilson Park.

"You know what the secret to weight loss is? Don't eat much." ___Simon Cowell