The prevailing trends in the Cocoa Beach and Cape Canaveral real estate market are increasing supply and increasing days on market. Half of the condo units on the market have been for sale for over 100 days. Only three of the 24 units closed so far in October were on the market over 100 days. That suggests that the ones that sold were priced fairly and that those older unsold listings are overpriced. It's logical that increasing supply going into the slow season would increase average days on market but widespread optimistic pricing is contributing to the slowed pace of sales.
Despite high mortgage rates, nine of the 24 sold units so far this month used a mortgage to purchase. The 24 sold were on the market for a median 34 days with a median selling price of $435,000. We've had two units to close in October for over a million dollars, a 5th floor direct ocean unit at Ocean Oasis in downtown Cocoa Beach and a third floor corner at Meridian in north Cocoa Beach. Selling prices were $1.545 MM and $1.477 respectively. Over half (14) of the sold units commanded over $300 per square foot with seven of those over $400/sq ft.
We began the year with an average inventory of around 135 units through March but then began creeping up and hit 164 by mid-June. The supply continued to increase and inventory of condo units this morning is at 225 units.
Condo fees are going up for the reasons described in my last post. 2023 renewal insurance premiums were high enough to trigger fee increases at several complexes and now the majority are preparing for the results of the new reserve study and projected increases necessary to comply. I've been saying it for a while now but the reality is that condo living in Florida is about to get much more expensive. There is no reason to believe that prices will remain steady as the fee increases begin to happen. I think an across-the-board pullback in condo prices is almost certain to be happening by next year. The first indications are already being felt with the increasing days on market and abundance of price drops. Buyers are less likely to find themselves in a multiple offer situation than they were a few months ago and have more bargaining power than before. Based on the current asking prices, most sellers are, so far, unwilling to accept the changed reality and, if history informs, will be slow to respond to the changes. The good news for buyers is that there are sellers who are realistic and want to sell. Hint: those are less likely to be found in the group of units that have been on the market for months.
Good luck to all market participants. Reality-based buyers and sellers are the ones who will make it to the closing table. The rest will continue to cosplay their roles until they accept reality or quit the game.
"The prerequisites for failure were all in place." __unknown
