The year 2024 was eventful for real estate in Cocoa Beach. We began the year with the National Association of Realtors embroiled in a lawsuit over commission collusion in another state whose settlement would affect Realtors nationwide when new rules went into effect on August 17. On that date, it became mandatory for buyers to sign a Buyer's Brokerage Agreement with their buyer's agent before stepping foot in a property. That agreement must designate either a specific property, a type of property or an area, a time period and, controversially, how much the buyer will owe their agent upon closing of a property. BBAs are not common in our market and buyer reactions have been at times unsettling. There were buyers previously happy with and trusting of their agent who refused to sign the new agreements or modified the language because of their newfound distrust of the same agent for presuming to ask for a signature on a required document. Several of us found out how some of our clients really felt about us and it wasn't encouraging. Thanks to those who never wavered in their trust knowing we'd be fair regardless, just as we always were, at least those of us who are deserving of that trust.
Many agents saw the new BBA requirement as an opportunity to get a raise to 3% on every deal when those same agents had been happy to walk away with 2% to 2.5% prior to August 17. I would suggest that buyers tread carefully when signing these agreements especially those asking for high commission rates and especially those asking for a transaction fee in addition to the commission. There are very few situations where a transaction fee is justified. When you are presented with a BBA it is your right to negotiate the commission rate and your duty to refuse the transaction fee. The transaction fee is an attempt to pick your pocket and should immediately disqualify that agent from consideration. Don't be robbed. For the record, most sellers are still offering to pay the buyer's broker but in many cases it must be asked for as a concession when making an offer. A buyer will only be on the hook for the difference in what the seller is willing to pay and what the buyer agreed to pay their agent in the BBA. Buyers, don't agree to a high commission on your BBA unless you're willing to cough up some extra cash at closing to make up the difference.
Another big story this year was the impending deadline for condo milestone inspections and structural integrity reserve study. That deadline is today, December 31, 2024. We look to have several condos in our area who are going to miss the deadline. Those that have complied have seen their condo fees rise to fund the new reserve account which includes concrete repairs, something very few condos have ever reserved for. As of right now, the median condo fee of the units for sale is $650 monthly and likely to continue to increase. Buyers are advised to review the condo budget closely before committing to purchase a unit. Those associations who haven't implemented their new reserve funding will likely have a nasty surprise for the owners when they come into compliance.
We began 2024 with an inventory of 254 condo and townhome units and 31 single family homes for sale in Cocoa Beach and Cape Canaveral. Today, on the last day of 2024, the Cocoa Beach MLS is showing 298 condo and townhome units offered and 48 single family homes. Median time on market for the condos for sale is 95 days and for the homes, 184 days.
There have been 102 closed single family home sales during the year. Median selling price was $791,000 and only ten houses closed for less than a half million in the year. Median time to sell was 67 days and 45% of the sales were cash deals.
Condominiums, as always, had much higher sales activity than houses as there are many times the number of condos as houses in our two cities. There were a total of 501 closed sales during 2024 as of today. That number will creep up slightly over the next couple of weeks as tardy listing agents get around to closing their listings. It will still be the lowest number of condo sales in Cocoa Beach and Cape Canaveral since 2010. A little over 54% of the condo sales were cash deals. That percentage will probably increase this coming year with more stringent scrutiny of condo associations by lenders for condo loans. Here are condo unit sales numbers for the last twenty years.
There were only eight sales of condos in 2024 for a million dollars or more. Median selling price was $355,000 and median time on market was 72 days. Sixty units sold for $200,000 or less.
Predictions for 2025: I expect condo loans to become more difficult to obtain. On a condo sale last month the lender's underwriter required a copy of the last reserve study before he'd approve. This was an association that was already funding reserves at 21% of the total budget, over twice Fannie Mae's minimum requirement. Florida condo loans are already some of the more difficult mortgages to qualify for and any new requirements like this are going to add even more condo associations to the list of those who will not pass muster for a mortgage.
Speaking of not passing muster, some associations have stopped filling out lender condo questionnaires for prospective buyers. Without the completed and signed questionnaire, units in those building effectively become cash only sales. In the associations' defense, the new questionnaires have some very vague questions about the respondent's awareness of structural issues. Signing one's name to one of these documents could encumber the respondent with substantial liability which is why some association attorneys are advising the association not to fill them out.
I would advise any prospective condo buyers to carefully review condo docs including budget and to give more than a passing glance at the overall apparent condition of the building. You don't have to be an engineer to notice deferred maintenance. Buildings with obvious issues will have to be repaired and the owners will be the ones paying for it. Be aware that condo fees are likely to continue increasing although hopefully at a slower rate than this year's increases. Master insurance policies are becoming more expensive so it's probably prudent to expect fees to rise again to accommodate 2025's probably more-expensive renewal premium.
On the positive side, there are lots of new things happening in Cocoa Beach. Construction is underway on the new Westin Cocoa Beach on the 15 acre oceanfront site of the old Holiday Inn. The food court on the site of the old Yen Yens downtown is well underway and The Surf oceanfront luxury condo downtown has begun closings. The new City Hall downtown is close to completion and there are several smaller projects either under construction or soon to break ground. Cocoa Beach is changing but we're still a small friendly beach town with the same population that we had in 1970, 12,000 mostly happy souls, probably over half of them surfers. We're a good bunch and welcome our new residents.
I found a note today I made in the 90s about the surf wax graffiti on the seawall at 14th St. Here are a few choice specimens:
- Chad Can't Surf
- Eric Shreds...Lettuce ("lettuce" was added days after the original appeared)
- Smoke a Fatty
We lost one of the 14th St. crew this year and he'd be paddling out today for his annual end of the year surf, regardless the weather. RIP Dennis.
"Coach, you can play me or not play me but I'm only here for four years and then I've got things to do with my life." _Pat Tillman to his college football coach upon being told that freshmen players usually didn't play in their first year
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