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