Wednesday, September 19, 2018

Manipulation. Who Cares?

According to convicted real estate agent turned extortionist Kevin Tomlinson, one of the top Miami Beach luxury real estate team, The Jillsmanipulated "dozens of MLS listings, hundreds of times, erasing more than 20,000 days on market". According to testimony from one of the Jills, “We didn’t think it was wrong,” And apparently she was correct in that thinking. Tomlinson has been sentenced and barred from working in the real estate industry over his attempted extortion of $800,000 from the Jills but the Jills are free to continue manipulating MLS listings to their and their clients' benefit, or detriment. This serves as a green light to listing agents everywhere to continue their shenanigans. Does this happen here in the Cocoa Beach area? Yes. All the time and in many different ways.

The most common form of MLS manipulation is cancelling and relisting a property to reset the days on market clock. Misrepresenting sold prices happens when furniture is included in the sale but not noted on the closed listing. A prospective buyer looking at an unfurnished condo might think he's getting a good deal if the unit is priced at the exact same price as the last identical floor plan unit to sell in the building. If that other unit's price included $40,000 of new furniture that was not noted in the closed listing, he may be overpaying. I'm aware of developers propping up prices by issuing "decorating credits" of tens of thousands of dollars back to the buyer at closing. For instance; the recorded selling price of $650,000 included a $60,000 decorating credit effectively making the actual price paid $590,000.

Our MLS has strict rules including fines up to $15,000 for relatively minor infractions but there aren't rules that prohibit either of the above manipulations. The Florida Real Estate Commission has instituted a new rule that addresses another common manipulation, that of crediting sales of an entire group of agents to one team member to artificially boost that agent's production numbers which doesn't really hurt anything. What it does accomplish is boosting that agent's recent transaction numbers at Zillow which is most agents' best source of new prospects. If you see an agent with hundreds of recent transactions in Zillow, you might be seeing the benefit of this type of team strategy. For the record, every team that I know of in our area that is doing this is top notch and providing great value to their clients. They are using a perfectly legal (until now) method of generating business. I personally have no problem with it but someone must have complained to FREC to get this new rule considered and passed. The new rule reads:


















I hope is everyone got all the waves they wanted the week and a half of Hurricane Florence swell and are ready for the next, should we get one this season. We still have time for more and October is generally productive for large, clean surf. Be safe out there and share the waves. There are always enough for everyone.

I tried so hard and got so far
but in the end it didn't really matter.  __linkin park

Monday, September 10, 2018

Grand Theft Cocoa Beach

If you have seen the photo above on another Cocoa Beach website you should know that it was shot by my wife and used previously on this blog when it was stolen and is now being used without permission. It is featured prominently on several pages on the other site. I would encourage readers who "love Cocoa Beach" and don't support this theft to demonstrate your disapproval in any manner that feels appropriate to you.  I must assume the advertisers on the offending site. motels, restaurants and a local political candidate, support this sort of business practice.

Condo sales in August were slower than in July with 55 units closed in Cocoa Beach and Cape Canaveral as reported by the Cocoa Beach MLS. Prices ranged from $84,000 to $765,000 with a median selling price of $260,000. The lower price brackets dominated the activity with only three sales exceeding the half million dollar mark with one each at Meridian, Mystic Vistas and Stonewood. There were seven direct ocean, east-facing units above the ground floor closed in the month with most clustered in the $265 - $275 per square foot range. Only two units commanded over $277 per square foot, one at Meridian and the other a high floor Sand Dollar at Stonewood, both exceptional and closed at numbers over $340/sf.

Single family home activity increased with 15 homes closed in the month, all but one in Cocoa Beach. Highest price paid was $1,037,500 for an 11 year old beauty on Edwards Bay in Snug Harbor, south Cocoa Beach. The majority closed at prices between $300,000 and $500,000.

Casual observation tells me that showing activity has slowed across the board, not unusual in the back to school period. There are currently 69 single family homes offered in the two cities and 215 existing condo and townhouse units. The majority of sellers are still clinging to optimistic asking prices in my opinion so prospective buyers will benefit from information and research about current market value ranges of their target property type. Good luck out there.

The beginning pulse of swell from approaching Hurricane Florence is already showing on our beaches. Anticipation is high for a clean sizable swell. We've been teased and disappointed before but this looks promising for a few days of good waves in Cocoa Beach.

"Stealing is stealing. I don't care if it's the internet or you're breaking into a warehouse somewhere - it's theft."  __Patrick Leahy

Monday, August 27, 2018

No Stinkin Photos

What's up with the million dollar plus luxury Cocoa Beach condo listing with only one photo that's been listed for 37 days? The listing says "easy to show" and "more photos coming soon". We're still waiting.

How about the fourth floor unit listed as being on floor 0? My search for units above the 2nd floor won't find that one. Or the several condo listings without the condo name entered in the appropriate listing field? I often have buyers looking for a unit in a specific building. My search for listings in that particular building will not find a listing with that omission.

Marketing residential properties has changed quite a bit since the old days when the MLS was a  booklet that was printed and distributed every few weeks. Consumers had no way of knowing everything that was for sale without the help of an agent other than driving around in their target area looking for signs. Since many condos don't allow signs, that wasn't effective for prospective condo buyers. Print advertising was the primary and most effective marketing strategy. There were a half dozen specialty real estate booklets in our area that were distributed to area stores and motels and were free for the consumer. The Sunday real estate section of Florida Today was as big as the entire paper is today. Hopeful buyers would grab the paper and a pen and sit down to sift through all the listings hoping to find something that sounded like it might work. Busy agents had contracts with the paper agreeing to spend big dollars every month. The Sunday section had full color pages with photos in addition to the several pages of classifieds. Listing agents were compelled to spend on print advertising as sellers expected and, rightfully, demanded it. The internet turned that model on its head.

By the mid-2000s the MLS was online and consumers had the ability to search for exactly the property type they were interested in. They could see photos, read descriptions and find details such as rental restrictions and taxes for every listing. Print advertising outside the MLS became more effective at landing a listing than for actually attracting a buyer. With a listing on the MLS, listing syndicators scraped the listings and redistributed to dozens of online sites. Listing agents shifted their advertising dollars to Google, Zillow and other online real estate sites. By 2018 all any listing really needed was a reasonably fair listing price, good photos and an MLS listing and the rest would take care of itself. That is unless the listing agent failed to enter the correct information or was cheap and lazy and took fuzzy cell phone photos or none at all. The number of listings with incorrect or missing info and/or bad photos seems to tell me that many sellers aren't checking their listings or vetting their agent. There are zero excuses for a poor listing yet quite a few agents are getting away with it. I would encourage all sellers to carefully check their listings right now for accuracy and appeal. The market is strong but you don't need a listing agent adding friction to the selling process. Just saying.

I was reading back through some of my older posts and thought this one was worth a read for those who may have missed it the first time around in 2015.   Don't. Say. That.  

"Personally, I am very fond of strawberries and cream, but I have found that for some strange reason, fish prefer worms." - Dale Carnegie

Tuesday, August 07, 2018

Rolling Up July

After a slow start for residential real estate in Cocoa Beach and Cape Canaveral, the month of July finished with a bang, at least for condos.  The Cocoa Beach MLS is reporting 70 closed condo and townhouse units in the month as of this morning but only four single-family home sales. Seventy condo sales beats last July's 62 units but four single family home sales lags far behind July 2017's eighteen sales. Inventory of condos is slightly higher than last year with 220 existing units for sale and single family homes offered is almost the same, 62 compared to 64 in July 2017.

I don't have a good guess for the drastic slowdown in home sales other than price creep. Only 17 of the 62 homes for sale are priced below a half million dollars with a mere twelve asking less than $400,000. The priciest home sale in July was $420,000.  As prices inflate, the audience shrinks.

The pricing distribution of the condo inventory is considerably more favorable with two thirds of the units offered priced at or below $400,000 with 95 of those asking less than $300,000. Over half of the units that sold in July were on the market for less than 60 days with twenty seven of those sold in less than a month. About half of the units for sale have been on the market for 90 days or more. Seller optimism remains high. Those that price close to fair market value sell fast absent some unusual circumstance. About half the July condo buyers used a mortgage and the other half paid cash.

Happy hunting to those hoping to purchase and, as always, be prepared to move quickly when an attractive target has been acquired. You have competition looking for the same thing.

"I don't mind you thinking I'm stupid, but don't talk to me like I'm stupid." __Harlan Ellison

Wednesday, August 01, 2018

Real Estate Myths Examined

I'm sure I've missed a few but the memes listed below are the most common ones that I hear from people outside the industry about real estate agents.

Phony multiple offers. This one will not die. I dread hearing the frightening phrase, "We have multiple offers. Bring your best and highest offer." The most common response from a buyer is "Do you think there really is another offer?" The second most common response is, "Withdraw my offer. I'm not playing that game." It is this second response that makes phony offers a risky strategy for a listing agent. She stands the chance of chasing away a legitimate buyer by fabricating a phantom offer. I have seen both buyers offering on the same property withdraw when asked for best and highest. For this reason, I never doubt the existence of another offer even if the property has been on the market for months. It's just too risky. This leads to the next myth;

Agents on both sides push for higher selling price because they'll get a higher commission check. Think about this. No sane agent would jeopardize a sale in hopes of getting a couple percent on an extra few thousand dollars. Parties to a real estate transaction can rest assured that the agents want the deal to close, otherwise they get nothing for their efforts.

Agents not showing low commission listings. This is probably at least somewhat true. There is a local broker who often (possibly always) pays out less to the buyer's broker than he keeps for himself unlike the majority of listings which share the commission equally between listing and selling (buyer's) broker. I don't exclude his listings from showing lists but I resent the fact that he cheats buyers' brokers while being so difficult to work with. I imagine some other buyer's agents will gladly skip his listings should the schedule necessitate excising some properties from their list. Sellers, make sure you know how the commission you agree to pay your listing broker is being shared. I suspect some sellers don't realize that their broker is offering an unequal split possibly affecting the exposure their property gets.

Open houses only benefit agents. Absolutely not true. I have sold several properties at open houses and know of multiple other sales that happened because of an open house. Yes, a good agent will take advantage of an open house to get prospects who find the open property not suited for them but who are looking to purchase something in the area. That doesn't mean that the next person through the door will also find it unsuitable. Sellers, remember. You're only looking for one buyer. In fact you can only accommodate one buyer. Side note; don't worry about nosy neighbors coming over just to check out your stuff and get free food. They may very well have a friend or relative moving to the area who'd like to live nearby. They aren't hurting you and may be the source of the eventual buyer.

Listing agents play games with listings to increase their income. This one is at least sometimes true. It can be as innocuous as legally delaying entering a listing into the MLS in hopes of finding a buyer first or sharing an upcoming listing within the agent's brokerage in hopes that both sides of the commission will stay in the listing office. Or, it can be unethical and/or illegal as in the recent case in Miami where a prominent agent team was discovered to have been entering incorrect neighborhoods for their listings to keep other agents from finding and soliciting the listing upon expiration. This one was definitely not in the clients' best interest if other agents couldn't find the listings. It devolved into something far worse than the initial MLS trickery and now one broker finds himself facing a possible 30 years in prison.

And now for a couple of items of good news: Cocoa Beach's Freedom Seven Elementary School has once again been named the number one elementary school in Florida by the Florida Department of Education.

NOAA Fisheries has announced a brief red snapper season in Atlantic federal waters for recreational anglers. We will be allowed to keep one fish per person per day of at least 20" in length for two weekends only (Friday, Saturday, Sunday) on the following days: August 10, 11, 12 and 17, 18, and 19, 2018. Good luck everyone and hope your one fish is a sow (over 20 lbs.) although I'll settle for a top of category Cadillac (10 to 20 lbs.).

I see the bad moon arising
I see trouble on the way
I see earthquakes and lightnin'
I see bad times today

___________________Creedence Clearwater Rivival

Saturday, July 14, 2018

Calm and Hot With a Tiny Swell

We finished the month of June with 56 recorded condo sales in Cocoa Beach and Cape Canaveral and, according to the Cocoa Beach MLS, another 24 have closed so far in the month of July. Inventory for condos and single family homes has barely budged since my last post. The constant upward push in prices seems to have slowed. I'm not seeing a lot of new price records as was the case earlier this year. The upper $200s per square foot range seems to be the comfort level for good condition, medium sized direct ocean condos with a good view. Those cracking above $300 per foot are mainly newer or nicely remodeled units and usually furnished and with garages.

Those looking for a unit in an oceanfront building have a decent handful from which to choose at the moment. There are three one bedroom units asking less than $200,000 in oceanfront buildings this morning. If two bedrooms are a must but an ocean view is not, there are several possibilities directly on the beach under $300,000. For those who must have an open ocean view and at least two bedrooms, there are several offerings under $400,000 in older oceanfront buildings.

As always, if anyone has questions about properties or the Cocoa Beach and Cape Canaveral market, I am happy to try to help. Feel free to contact me.

It's been hot everywhere in the US according to the weather channel but the afternoon sea breeze has kept things comfortable in Cocoa Beach most days. Mornings, on the other hand, even the birds retreat to the shade.

The ocean has been calm and very fishable recently (see the top photo) but unfortunately the hungriest fish have been "no keep" American red snappers like the one pictured in my last post. Fishermen in the Gulf of Mexico are allowed to keep two fish per person at least 16" in length between June 11 and July 21 but those of us on the east coast have no open season. Judging from my last trip and the numbers being reported caught there is a healthy population off our coast.

"I'll stop wearing black when they make a darker color." _Fall Out Boy

Monday, June 25, 2018

Approaching Half Time

There hasn't been much to report since my last post. Activity and sales remain slow. Prospective buyers hoping for a greater selection of listings in Cocoa Beach and Cape Canaveral will have to continue to deal with a meager number of possibilities. Residential inventory has been stuck in skinny water for several years now and doesn't appear to be changing anytime soon.

Condo inventory in the two cities stands at 233 existing units this morning with another 50 single family homes offered.

Sales have been slow with only four homes and forty condos closed so far in the month of June. Some of the oceanfront condo sales of note included:


A luxurious 10 year old 4th floor direct ocean 3/3 at Ocean Paradise in south Cocoa Beach with 2134 square feet and a one-car garage that closed for $685,000 or $321/sf. Furniture was marked as "optional/negotiable" in the listing and may have been included but we'll never know as the listing agent did not disclose that detail when closing the listing. I don't blame her as no agent in our market ever does but it would be nice to know for other agents and appraisers using the sale as a comp to value another property.

An updated 5th floor direct ocean Palmas Majorca 3/2 in downtown Cocoa Beach with 1801 square feet and a one car garage that closed for $550,000 or $305/sf. Again, furniture may have been included but...

A nicely remodeled 5th floor SE corner direct ocean 2/2 at 2100 Towers with 1600 sq.ft. and a one-car garage that closed for $530,000 or $331/sf. Again; furniture? Maybe.

A remodeled and fully furnished (confirmed-yes!) direct ocean 2nd floor Waters Edge 3/2 in south Cocoa Beach with 1753 sq.ft. and one garage spot that sold for $440,000 in 3 days. Only brought $250/sf probably because of the somewhat obstructed ocean view due to high dune vegetation there.

Three different Mystic Vistas 3/2 units with ocean views ranging from none to a peek, some with furniture, some undisclosed at prices from $167 to $210 a square foot.

An original condition, furnished 6th floor Canaveral Towers 2/2 with 1145 square feet and an expansive south ocean view and a carport that closed for $340,000 or $297 a foot. These weekly rental units bring a premium because of the income history and/or potential.

An updated and furnished ground floor direct ocean Windjammer 2/2 in Cape Canaveral with 1196 square feet and a one car garage that closed for $320,000 or $267/sf.

We've settled into our summer pattern of hot and humid with afternoon thunderstorms most days. The reliable sea breeze has been doing a good job of keeping temps in a pleasant range close to the beach. Conditions have made offshore fishing pleasant with mixed species being caught. Giant tarpon and monster jack crevalle are following schools of pogies just outside the surf zone up and down the beach. It's a catch of a lifetime with either for most anglers. While some big grouper are being caught in deep water, the American Red Snappers are so thick that it's hard to get a bait through to a grouper. We could have caught as many of these pictured below  as we wanted last weekend but unfortunately, they are off limits because of their "endangered" status.


































“Oh, pour me another drink
And punch me in the face
You can call me Nancy” __Josh Tillman

Saturday, June 02, 2018

Summertime 2018


I have been asked why I tend to focus more on condos than single family homes. It's circumstance, not choice. As with most coastal areas of Florida, condos in Cocoa Beach and Cape Canaveral outnumber homes by a wide margin. Typically there will be five or six condos for sale for every single family home listed.

Showing activity during May was slower than the preceding months which is normal in our area after the snowbirds leave and before the summer visitors begin arriving. Activity typically cranks back up in June as schools let out and summer vacation season kicks in.

The number of closed sales in the month remained strong as properties that were contracted during snowbird season closed. Nine single family homes and 70 condo and townhouse units closed in the month of May. Twenty of the condos and four of the single homes sold in the first week on the market. Half of the condos and a third of the homes sold for cash.

Six oceanfront condos brought over $300 a square foot with the top spot going to a gorgeous 7th floor SE corner Michelina overlooking the Pier with 3221 square feet selling for $1.1 MM or $341 per square foot. This particular unit has been off and on the market since 2009 when the asking price was $2.4 MM. That was an expensive and slow moving reality check. Other buildings with units bringing more than $300/sf included Coral Seas, Sand Dunes, 2100 Towers, Windward East and Canaveral Towers.

Note that except for weekly rental buildings like Canaveral Towers, units commanding over $300 a foot are typically either new or totally remodeled, fully furnished and have a garage. There are 43 units currently asking over $300 per foot, many of them in old buildings, in original condition and without garages. A few of them are worth close to the asking price but the overwhelming majority are worth nowhere near their delusional prices. A 40 year old unit in mainly original condition without a garage is going to have a hard time justifying $428 a foot despite the great view and location. Buyers should not be discouraged when a fair offer on an overpriced listing is rebuked especially if the listing is new. It's not reasonable to expect a seller asking an unreasonable price to come to his senses because you submitted a fair offer with supporting comps. If he was reasonable, he would have already determined fair value and would be asking a little above that, not 25% higher. As the Captain said, "Some men you just can't reach."

Inventory of condos and townhomes for sale remains tight with 231 existing units available in Cocoa Beach and Cape Canaveral with another 25 offered in yet-to-be-built buildings. Single family home inventory in the two cities stands at 54.  As mentioned above, a huge majority of current listings are overpriced, some ridiculously so.  It's possible to buy property in our area at a reasonable price but it doesn't happen by accident. Determining fair value isn't a science but any good buyer's agent can run comps and come up with a tight range of fair value for most properties. Whether a buyer is willing to stray outside that range depends on the property. Homework, people and good hunting.

The old Publix at Banana River Square that was torn down last year reopened this week. Everyone south of 520 is happy about that. We had about four days in the last month without rain but it appears that we are out of that trend now. The ocean has calmed down and summer rates are in effect at the Cocoa Beach golf course. It's uncrowded most days.

Who wants mullet when there are big gator trout to be had?



"All you have to do is not smile and they're like, 'She's a bitch.'" __Kacey Musgraves

Saturday, May 05, 2018

It's a Guessing Game










Attention listing agents: If you received an alert that I accessed your electronic lockbox for a listing that I didn't make showing arrangements for, you can relax. It is, almost certainly, because you didn't mark your lockbox and I was opening multiple boxes looking for the keys to a unit I was scheduled to show. At secure condo buildings, there is generally an exterior location where all the lockboxes are located like the palm tree with bike chain at River Bend, or the PVC pipe in the flower bed at Windward East or the chain link fence around the tennis court at Xanadu. No problem until a buyer's agent is faced with multiple identical lockboxes with no unit or broker markings. Then it becomes a total guessing game. All of you know that the Walker Bagwell lockboxes have a bright wide green stripe, easy to identify in a forest of lockboxes. Zero failure-to-identify rate and no royalties should you decide to adopt the idea (in another color please). I and every other buyer's agent would appreciate easy-to-identify lockboxes. I failed to show a unit this week because I couldn't figure out which box belonged to the unit we wanted to see. I gave it a shot but thirty minutes later after two wrong guesses and two round trips out to the tennis courts, we gave up and went to the next property. Friction.

We resume our regularly scheduled post here. Inventory has been creeping up (read: improving) and this morning we have a total of 241 existing condos and townhomes for sale in Cocoa Beach and Cape Canaveral according to the Cocoa Beach MLS. There are an additional 21 units advertised in to-be-built buildings. Single family home inventory remains low after a very busy month with 16 sales and stands at 56 for sale today in the two cities.

April was a blockbuster month for sales with 81 condos and townhomes closed during the month at prices from $80,000 to $2.2 MM. Seven oceanfront units cracked the $300 per square foot barrier with the one-of-a-kind Cocoa Cabanas penthouse bringing $415/sf at a selling price of $2,200,000. This unit, completed last year, has six bedrooms, five and a half baths, 5300 square feet, three garages and the best of the best in finishes and fixtures. Villages of Seaport continued to be busy with seven units closing in April. Xanadu and Harbor Isles in Cocoa Beach were also busy with multiple closing in each complex.

Demand and activity remain strong so I think it's safe to say that, absent some unknown negative macro event, upward pressure on prices will persist. Buyers need to keep in mind what this means when drawing their line in the price sand. Whatever the fair value of a property today, in this market, it is likely to be higher later. Keep this in mind before walking away over an insignificant amount in tight negotiations. I've watched several stubborn sellers successfully stand firm and wait for the market to catch up to their expectations. This is more true with income properties than owner-occupied. Sellers' circumstances vary but buyers would be prudent to be mindful of market direction and inventory.

I had a deal fall apart this week because of a failed mortgage. After placing the unit back on the market I had three calls to show within the hour and had a new contract by dark. Demand. My advice to clients is the same as it has been for the last several years; know which criteria matter, be realistic about what it's going to cost and be prepared to act when a target is acquired. About mortgages; one's glowing credit score, high income and assets are probably not going to be enough to convince a conventional mortgage lender to lend on a non-warrantable condo. In short that is a complex that doesn't conform to Freddie Mac and Fannie Mae's conventional guidelines. Some of the issues that will disqualify a complex are:

    A single entity owns more than 10% of the units
    Less than 51% of the units are owner-occupied
    More than 15% of the units are in arrears with their association dues
    There is litigation in which the homeowner’s association (HOA) is named

Most loan officers will promise that they can perform in a borderline complex (weekly rentals) but experience tells me that the majority of them will fail to close. For those looking at weekly rental units, a mortgage is probably going to be impossible or at best, difficult. Be realistic.   

Things are happening in downtown Cocoa Beach and are especially exciting for those who appreciate a good meal. The site of the iconic Mango Tree is now a flat lot awaiting a new Fat Snook building. All is not lost, however, as Luca, the talented chef from the old Mango Tree, is now at the Pompano Grille creating new deliciousness. Recently opened at the corner of Minutemen and Orlando Avenue downtown adjacent to the Heidelberg is the new Flavour Kitchen & Wine Bar We walked around the corner to check it out last night after attending the Brian Dowdall showing and celebration of life at the Studios of Cocoa Beach and enjoyed a few craft beers and, from the small bites menu, tuna tacos and flatbread pizza. The entree selection looked enticing but will be explored another time. The plentiful selection of wine and craft beers and the cozy, hip decor will have me back. They're having a grand opening May 27 for those interested. By the way, PBS did an excellent piece about Brian last year.

Looks like the offshore fishing tournament scheduled for today will be contending with high winds and seas. Several hundred boats were registered but if called off for weather, the prizes will be raffled to the registered captains. The party at Rustys at the Port this afternoon should be a good one either way.

"You might be the prettiest, tastiest, most wonderful peach in the world but there’s just some people who don’t like peaches”.  _ishnite

Tuesday, April 10, 2018

In-Between Season









The beach re-nourishment crew and the majority of the winter visitors are gone as Cocoa Beach eases into the recess between the snowbirds and summer vacationers. It's a good time here and the slowdown is welcomed by most. There are a few spring breakers roaming around and some of the more reclusive locals have been spotted emerging from their lairs where they've been waiting out the snowbird exodus. Count me among them. May is a great time here with light traffic, small waves, warm water and low summer rates at the Cocoa Beach Country Club. Things will pick back up as schools begin letting out for the summer.

March was a busy month for residential real estate sales in Cocoa Beach and Cape Canaveral. Sixty condo units and thirteen single family homes closed in the month. Median selling price for condos was $200,000 with only three units closing for more than $500,000, all three oceanfront south Cocoa Beach. Villages of Seaport in Cape Canaveral has been unusually active with eight units closed in the month and another six units contracted since March 1 and awaiting closing. Less than half of all condo buyers in the month used a mortgage. Slightly more than half of the sold units were on the market less than a month.

Single family homes at the low end of the price range were more active with eight of the thirteen closed selling for less than $400,000. Over half of the homes sales were cash deals.

Golf business league at the Cocoa Beach Country Club starts again today for 2018 and is every Tuesday, tee off anytime from noon until dark. Everyone is welcome. Nine holes is $18 with optional skins for a couple more dollars if one is so inclined. Hope to see a bunch of you there.

"Big dogs eat first, I guess. "  __Matt Warshaw

Sunday, March 25, 2018

Crossing T's and Dotting I's

A portion of another excellent Cocoa Beach mural on the north wall of Coconut's Fish Market.

Those tired of reading about bad listing agent behavior may want to skip this one.

Browsing my hotsheet one morning this week I notice a price reduction on a three quarter of a million dollar luxury oceanfront condo unit that's been on the market a little more than a month. I browse the photos to refresh my memory of the unit and to see if it really should command the still-high $350 per square foot price. It might, considering the remodel job, the fact that it's a corner unit and is being offered fully furnished. Problem is, I can't really tell from the listing photos because they appear to have been shot with a Kodak Brownie with Vaseline smeared on the lens. I know the listing agent would like to get a check for selling this listing but she's hampered the process with poor photos. Friction.

On the same hotsheet is another unit, same building that is more aggressively priced that has been on the market for 94 days and that has a newly accepted contract. It might have sold sooner had the listing agent bothered to put the condo name in the listing. Anyone doing a search for listings in this particular complex over the last 94 days wouldn't have found this one because it had no name entered. Friction.

In this day of universal access to the MLS and the syndication of listings to Zillow et al,  non-MLS marketing has become far less effective at selling specific listings. A marketing effort made by a listing agent in non-MLS media is good for every other comparable listing including those that do nothing but exist on the MLS. A buyer attracted to a Cocoa Beach condo by a slick ad in the Dubai Gulf News will almost certainly check the easily browsed comparable listings before making an offer. Knowing that, it is imperative that MLS listings be complete and with accurate descriptions and good photos. I cringe to think of the buyers who declined to view the first listing mentioned above because the photos made the unit look so dark and small or who missed the second because the absent condo name made it invisible in a search for that building.

Takeaway: Sellers should be concerned more with how their listing appears on the MLS than by fancy extra marketing efforts. A Wall Street Journal classified for a Cocoa Beach condo is less effective than good photos in the MLS. The appearance and content of a seller's MLS listing should take precedence over all other marketing efforts. Those who settle for crummy photos or bad descriptions are not taking full advantage of the current robust market.

"Mr. Gorbachev, tear down this wall." __Ronald Reagan

Sunday, March 18, 2018

The Dog Ate Your Showing Appointment

What is the best excuse a listing agent can give for not showing up to an appointment to show a luxury oceanfront condo? I tend to doubt the "I had car trouble and forgot to call" or "in the hospital" excuses that came from the same agent this week on two successive days to two different agents. She probably never dreamed that the agents, from different brokerages, would randomly mention their bad experiences with her to one another. Her client, the property owner, would probably not be pleased to know about that or that she refused to show the property another time this week with a 12 hour notice saying that the out-of-town buyers, if serious, should be willing to fly back down to see the unit when it was convenient for her. I'm waiting for "my dog ate the appointment calendar." Her friction to showing might explain why this attractively-priced property has been for sale for almost five months while other units are selling in less than a week. She may have agreed to a reduced commission rate and is regretting it after the fact and is just doing the minimum hoping for a miracle in spite of her resistance. Who knows?

Listings with easier access are selling fast. Since March 1, fifty-five condo units have gone under contract, twenty-five in a week or less on the market, ten of them asking $499,000 or more. All price ranges are active right now with waterfront, both ocean and river, especially strong.

There are currently 155 existing waterfront units for sale in Cocoa Beach and Cape Canaveral with another 12 to-be-built units offered. Asking prices range from $74,900 to $1.13 MM. For those looking there are possibilities. As always the ability to know what price is fair is paramount.

The old Cocoa Beach Public that was torn down and currently being rebuilt is taking shape and we just heard that the newly remodeled Cocoa Beach Winn Dixie will not be among the 37 WD stores slated for closure in Florida. The Cocoa Beach City Commission has been discussing and taking public comment about relaxing the 45' height restriction and whether to allow dogs on the beach. Opinions on both sides of both issues are heated. Change is afoot.

"I overthink your punctuation use. " __Lorde

Monday, March 05, 2018

It's All About the Price

The striking mural above is on the west wall of Mainely Lobster downtown Cocoa Beach and is missed by most vistors to Cocoa Beach. It's one of my favorites of the several good murals scattered around downtown.

If the meager for sale inventory in Cocoa Beach and Cape Canaveral were magically repriced overnight to within 5% of fair market value, I suspect over half would sell in two weeks. The demand for property remains high but the supply of fairly priced listings is not enough to satisfy that demand. I'm amazed that so many sellers insist on crazy high prices and that agents are willing to take on those listings. Some agents do it knowing there's a good chance the owners will drop the price later when the market doesn't deliver a buyer. Others will take a listing that will never sell knowing it will garner inquiries from prospective buyers. When those buyers realize they can't negotiate a fair price on the over-priced listing they'll move on to something else. Agent finds them something else at a fair price, gets paid and the over-priced bait continues to attract fresh prospects. Rinse, repeat. For an agent willing to put in the time and with the skills to work this angle efficiently, the results can be worth it. The over-priced sellers can continue to hope for a miracle. In this rising market, appreciation will eventually catch up to all but the most optimistic fantasy prices. Other than opportunity costs and mortgage payments, our recent rate of appreciation has been enough to cover condo fees and property taxes for most properties. However, considering a boring S&P index fund returned over 20% in 2017, the opportunity cost was significant for those who rode the year out clinging to an unrealistic price.

The evidence for overpricing is overwhelming. Exactly three condos have sold in our two cities in 2018 for more than $300 per square foot. Two were beautiful units in newer buildings and the other was a beautifully remodeled corner on a high floor. All three were direct ocean, third floor or higher. There are units that are worth $300 a foot and higher but they must be special. Any unit in the Meridian or a new oceanfront building will bring over $300/sf but in the older buildings a unit must be in exceptional condition to cross that threshold. Example: I saw  a new listing in Emerald Seas last week asking $327 a square foot that was worth every penny of that, in my opinion, due to an exceptional total remodel and tasteful included furnishings. Congrats to the buyer that contracted that one. It's a beauty.

Looking at the inventory of condo and townhouse units for sale this morning I find 44 asking over $300 per square foot, 15 of them over $350/sf. Only a handful of these 44 are worth within 10% of their asking price. Not surprisingly, well over half have been on the market for over a year. Many of those have had their days on market manipulated to appear to be new listings. Some change their asking prices frequently to trigger inclusion on lists of price-changed listings. All it takes is a change of $1 lower or higher to trigger that inclusion. It will, however, take more than cute MLS tricks, marketing in Dubai, or the most beautiful agent in Florida to sell a property for 25% more than it's worth. I'm guessing the buyer of that funky unit close to the Pier asking $396/sf is not going to be willing to pony up that number no matter the "$80,000 native coral wall framing the ocean view".

It's exciting to get an email like the one below from the City. This was the warning last Friday.
And this below is the reality this morning, Monday, 10.8' with a 16 second period.


The forecast was spot on. The swell was showing already Friday and was filling in nicely by Saturday evening. It's off it's face this morning with double-overhead freight train lefts breaking well offshore. The angle of the swell is hard out of the north so those beaches north of downtown will be significantly smaller than the south beaches not shadowed by the Cape. Streets north of the Pier to the Port will be best for those wanting a more manageable size. Breaking waves should be significantly larger than the open ocean measure of 10.8' at locations south of downtown Cocoa Beach all the way to south Florida. The Reef Road break in front of Mar a Lago in Palm Beach should be one of the best and biggest. Be safe out there. We look to have a few days of epic conditions after the wind switches offshore tonight or tomorrow.

"The problem of the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." __Bertrand Russell

Wednesday, February 21, 2018

What's Selling?

After a cold start to the year, we've settled into a high 70s to low 80s routine that is forecast through the end of the month. No complaints here.

Sales activity in Cocoa Beach and Cape Canaveral has been brisk as is normal this time of year. In the first three weeks of February, 58 condos and townhomes have gone under contract. Twenty two of those were in oceanfront buildings and eight were in canal or riverfront buildings. The majority of the activity was in units asking less than $200,000 when contracted. The over $400,000 bracket was strong with eight sellers finding buyers in that range.

Over half of the contracted units were on the market less than 14 days continuing the trend of fast sales for properly priced units. Not surprisingly, about a quarter of the still available inventory has been for sale for over six months, during which time, over 300 units have closed. The reason is obvious.

Inventory remains tight with only 221 existing condo and townhome units for sale in our two cities. There are an additional 21 yet-to-be-built units available for reservation. The lowest priced currently available direct oceanfront unit with at least two bedrooms is a ground floor 2/2 with garage at The Windjammer in Cape Canaveral asking $295,000. Those with a sub-$300,000 budget but willing to accept a side view of the ocean in an older building have 10 units to consider.

If we bump the budget to $400,000 for direct ocean with a view and garage, the short list begins with a gutted 3rd floor unit with 1344 square feet in south Cocoa Beach asking $310,000. For move-in ready with the same criteria there are only four, two in Cocoa Beach and two in Cape Canaveral, all asking $399,000. Raising the budget to $500,000 adds another seven to our list of possibilities, several of those over-priced. I wasn't kidding when I said tight.

The phone is already ringing with snowbirds looking for accommodations for the 2019 season. Those who haven't reserved for next year need to be making inquires now if they don't want to be stuck with leftovers.

It's time for the annual cobia run northward up the coast. Usually when we've had a sufficiently long period of cold weather, the fish will have been pushed south of here and will be congregated waiting to move north as water temps warm back up into the 70 degree range. After particularly cold winters the leading edge of the run can be thick with fish. Some are starting to show up but so far just in small numbers. The water may have warmed back up too quickly to keep them concentrated. Consequently, it's been hit or miss so far. Good luck if you're out there and feel free to drop off a slab at my office, skin-on preferably. Makes grilling much easier.

"I would like to die on Mars, just not on impact." __Elon Musk

Sunday, February 11, 2018

No News Is Bad News

When the other agent or the loan officer stops communicating it is safe to assume that the deal has turned south. If the appraiser hasn't called the listing agent for access to the property two weeks after contract, the safe assumption is that the borrower hasn't made formal loan application (that usually includes an application fee) or the loan officer is slacking, neither good news for hitting the closing date. In a recent deal, the loan officer responded with "everything is on track" until he went radio silent about two weeks into the deal. There was no sign of an appraiser at that point. When the title company emailed him for info three weeks in, he responded with "please remove me from your email list". Not a good sign. He strung everyone along for five weeks until finally admitting that the loan wasn't going to happen "because of the ex-wife". Thanks a bunch.

Condo inventory in Cocoa Beach and Cape Canaveral has increased a smidgen since my last post while single-family home listings have receded to their lowest level ever. There are currently 219 existing condo and townhome units and a mere 46 single-family homes currently for sale on the Cocoa Beach MLS. That's less than a four month supply of both at current sales levels. I received three inquiries in less than an hour of entering a listing in the MLS this week.

Prices remain strong and continued upward with overpriced listings predominating the landscape. Sellers who are renting their properties to snowbirds can be more stubborn with their opinion of value during the season while they're collecting inflated rents. It can be difficult to negotiate a fair price early in the year from a seller who may be looking at collecting 5% of the asking price in rent in the next few months. Their high ground starts receding at the end of March when the annual northerly migration begins. This is especially true in the complexes with longer than one month minimum rental restrictions. Finding a renter willing to sign a lease for at least three months after March and vacate by New Years can be a difficult task.

Those looking to purchase a condo here who hope to mix personal use with rental income are well advised to be aware of rental restrictions and their implications. Anything longer than one month minimum will be an obstacle. Some years it may work out, others not.

Shower thought of the day: I wonder what new owners in the condominium across the street from my house think when they realize that Waste Management empties their dumpsters two or three times a week between 6 and 6:30 AM. There are units on the second floor whose master bedroom sliders are level with the dumpster being slammed against the truck. It's loud at my house. It must sound like encore at a Motorhead concert in those units.

Three bedroom waterfront unit, $369,000.
Monthly fees: $435
Buyer's agent's local knowledge: Priceless

I had no idea when I quoted Ursala K. Le Guin (pictured above) in my last post that she had passed away the day before. Many thanks to her for the stories that inspired this young boy to imagine worlds far different than the one he found himself living in.

"If you don't stick to your values when they're being tested they're not values. They're hobbies." ________Jon Stewart

Tuesday, January 23, 2018

No, You Haven't Been Hacked



No, your computer problems weren't caused by Russian hackers and the listing agent did not lie about another offer to trick you into paying more with a bogus call for best and highest. With the critically low inventory it is safe to expect any desirable property priced within the ballpark of fair value to receive multiple offers. It is also safe to assume that another buyer faced with the same tiny inventory might consider paying over what you think is fair current value. What you should consider paying is up to you. Whether negotiating as the only buyer or making your best and highest in a multiple offer situation, it is a worthwhile exercise to estimate what the cost of buying later might be.

Example: A nice unit at Harbor Isles in Cocoa Beach is listed for $300,000. Comps suggest that $280 to $295 is probably in the range of fair current value. The unit satisfies all my criteria. It is the only unit in Cocoa Beach currently for sale that does satisfy my criteria. I prepare an offer and am told by the listing agent that there is another offer and both buyers' agents are asked to bring their best and highest offer. I had already decided that I would be willing to go as high as $295,000 to get this unit. Based on that, I submit my best and highest offer of $295,000 only to miss out to the other buyer who offered $300,000. I continue looking for another suitable unit but with the very skinny inventory am unable to find something that appeals to me. Finally, months later, an almost identical unit is listed in the adjacent building asking $320,000. We now have the previous unit as the best comp at $300,000.

Takeaway for prospective buyers: Make an effort to know the range of fair value for the properties you're interested in and be realistic with the offers you make knowing that the low inventory is always looming. Holding out for a "deal" may leave your search open-ended.

Three weeks into the new year and the 2018 snowbird season is throttling up with a vengeance. Probably due in part to the fact that everything north of the Florida line has been frozen tundra since December. New listing activity has been strong with 80 new units listed this month so far. Sales activity has been brisk  as well with 48 units going under contract since January 1, seventeen of those just listed since New Years Day. That leaves us with a total of 194 existing condo and townhouse units available in Cocoa Beach and Cape Canaveral this morning. How is our bread and butter oceanfront inventory? Looking for a direct ocean unit with at least two bedrooms and two baths asking less than $400,000? There are six. Don't want ground floor? Now there are four. Must have a garage? We have a grand total of three units. It'll be a short day.

I'm happy to help those who are hoping to purchase in our area. If you'd like the benefit of my experience and knowledge of this market, shoot me an email or call. I'll do my best to help you find the perfect beach place at the best possible price.

"The direction of escape is toward freedom. So what is ‘escapism’ an accusation of?" ________Ursula Le Guin

Wednesday, January 03, 2018

That's a Wrap - 2017

2017 was another stellar year for the Cocoa Beach and Cape Canaveral real estate market. We were looking to come up short of last year but managed to close just enough sales in the final days of the year to exceed 2016's number. There were a total of 696 condo and townhouse units and 159 single family homes closed in Cocoa Beach and Cape Canaveral according to the Cocoa Beach MLS. That combined total exceeded last year's number by a single property. The number of condo sales was the second highest since 2005.

[update Jan. 8] Three tardy listing agents have gotten around to closing additional December sales bringing the year's total of condo sales to 699.

Prices continued to drift higher through the year, not a surprise considering the persistent low inventory and strong demand. I see no evidence to suggest that that trend will change barring some black swan macro event. We enter the new year with the lowest condo inventory in recorded history with just 173 total existing condo and townhouse units offered for sale on the MLS, less than a three month supply at 2017's sales rate. If you're looking, be flexible and don't expect anyone to sell their unit to you for last year's price. Today's fair value will be last year's attractive price in due time.

Good news, bad news. Good news: Cocoa Beach City Hall reopened today and 2018 parking stickers are available. The 2017 stickers are good through the end of this month. Bad news: The Cocoa Beach city pool is closed due to this unseasonably cold weather. It was snowing in north Florida a few hours ago. We are expected to hit mid 30s tonight and tomorrow night but then back into more normal January weather, daytime temps in the 70s, next week.

The first launch ever of a SpaceX Falcon Heavy rocket is scheduled for this month. This beast has a orbital delivery capacity of 119,000 pounds, twice that of the Delta IV heavy. The three booster configuration has 27 Merlin rocket engines. Should be quite a spectacular launch topped off with simultaneous landings of the side boosters back at the Cape and minutes later landing of the main on the spaceport drone ship, Of Course I Still Love You, offshore. There is a higher than usual chance of failure in a first-time launch of any rocket vehicle. Don't be fooled by the multiple sonic booms as the rockets return after separation. This is the configuration that will likely be used in upcoming Mars missions.

I hope everyone's new year is off to a good start. See y'all around town.

"A president's hardest task is not to do what is right, but to know what is right." __Lyndon B. Johnson