Heaven in a Small Dish

South Cocoa Beach delivered a knockout last night. It began with a simple spinach salad and lobster bisque followed by fresh grilled local grouper perched atop layered vegetables. All were excellent and I would normally have ended my meal at that, quite satisfied, but, since it was my birthday, I decided to go for a dessert. Holy cow! As a redneck gourmand my descriptive skills are somewhat lacking but I'll try. What appeared to be a straightforward crème brûlée revealed a few seconds into the first bite subtle flavors of peach that shifted into airy traces of lavender mixed with the toasted caramelized sugar that was last to dissolve on the tongue. This is only the second time that I've ordered dessert here, not being a fan of sweets. Both times, though, I've experienced such complex layers of flavors that I find myself slowing my eating to a crawl trying to discern each flavor shift. Last time was a similar dish, a crème brûlée but with flavors of bourbon and pepper drifting in and out of the background. All this gushing from a not-into-sweets guy. Thank you to The Fat Snook for once again delivering an eating experience that I'll be daydreaming about for days to come. I'll be back.

"One of the very nicest things about life is the way we must regularly stop whatever it is we are doing and devote our attention to eating."
~Luciano Pavarotti

There is a Silver Lining After All

Tiiiiiiimberrrrrrrr. Mortgage rates fall off the cliff.


Chart courtesy of bankrate.com

Buried beneath the onslaught of bad news in the financial sector recently is a snippet of good news for buyers of real estate. Regular readers of this blog know that I lean towards the pessimistic and am anything but a cheerleader for the housing market and the economy in general, so, pointing out good news may have you questioning my sobriety. Worry not, I retain my cautious outlook for our market in general and suggest continued patience if you are looking to purchase. My advice remains "don't compromise on the property you're looking for and drive a hard bargain when you do find it". Now on to the good news. An unintended side effect of the bailout of Fannie Mae and Freddie Mac last week was an immediate and dramatic drop in mortgage rates. Even as taxpayers will be shouldering a staggering amount of debt, those buyers taking on new mortgages will be getting rates lower by more than 1/2 of a point than in late August. For a purchaser of a $250,000 Cocoa Beach condo with an 80% - 30 year mortgage that reduction will amount to about $70 per month lower payment or the equivalent of about a $12,000 reduction in price. Not shabby.

With the failure this past weekend of Lehman Brothers, the buyout of Merrill and the future of AIG and Washington Mututal in question, the interest rate trend remains on the downslope with the yield on the 10-year bond hitting a 5 year low this morning, Tuesday Sept. 16. No one knows where this will all end or where rates will be in the near future but, for now, buying power is stronger for those financing their property purchases.

Serendipity is looking in a haystack for a needle and discovering a farmer’s daughter.
- Julius Comroe Jr.

Ahhhh, September in Cocoa Beach

Osprey riding the updraft over ocean condos this morning.

Welcome to the best time of year in Cocoa Beach. Summer is over on the calendar but the only indication on the ground here is the lack of traffic and small number of people on the beach. The summer tourists are gone, the kids are back in school and the snowbirds are months away from their annual influx. The weather is balmy and the water is warm and should stay that way through November.

A positive development this week is the dramatic decline in long-term mortgage rates following the Fed's bailout of Fannie Mae and Freddie Mac. 30 year fixed rates are once again below 6%. Real estate sales on the beach are slowing as they do every year this time. We fell back below last year's sales numbers in July and August and should follow the seasonal trend of declining total sales through November. That is positive for buyers and negative for sellers. Some of the more notable sales so far this month include;

5th floor direct ocean 2/2 Windjammer for $275,000
2/2 Beachwalk corner with boat slip and garage for $154,000
3 yr.-old, 3/2.5 River Gardens townhome w/2 car garage $175,000


One note about the inventory numbers below; there is a shadow inventory of luxury condos held by the developers that isn't included in the MLS numbers. By my unscientific count there are in excess of 100 additional over-$500,000 condos available for purchase in Cocoa Beach and Cape Canaveral that are not included in the MLS inventory of 78. If you're thinking of dipping your toes into this dangerous market segment, you need to understand the implications of this inventory and more specifically the implications of a high number of unsold units within a complex. You also need to thoroughly investigate the condo association's financials and budget. If the condo fees seem too low they probably are and will almost certainly be raised to adequately insure and maintain the complex. It's not uncommon for developers to keep fees low until a project is sold out. The owners at Crescent Palms can speak to this; the previous $300 a month has been increased to $505. Also, if buying in an older building, ask about upcoming concrete projects. Even if a seller is willing to pay the assessments for you, do you want to buy into a building just embarking on a project that could take two years to complete? Jackhammers and construction crews can make your beach experience less than idyllic. Grill your buyer's agent for all details about your target buildings.

MLS inventory Sept 12, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____733
over $500,000________78 - 28 sold since New Year's Day
Single family homes___118
over $500,000_________42

My favorite, attractively-priced listings in the MLS right now include;

9-yr old, 4/2 half duplex steps from the beach for $210,000
Big, 3/2 canal-front condo with boat slip for $235,000
Big, 4-yr old, 4th floor, 2/2 direct river w/expansive views for $266,900
Big, 8-yr old side ocean view 3/3 for $299,900 (sold in '06 for $600,000)

If you have questions about our market or you'd like to know more about these or any other listings, please email me.

One last note about my earlier report on the Mystic Vistas auction in May; I incorrectly reported that 12 units had closed from the auction. The actual number of closed sales (as recorded on the tax appraiser's site through Aug.20) is only 11, less than half the number widely rumored to have been sold at the auction. It is entirely possible that the developer is giving buyers longer than the stated 30 days to close but, at this point, we're past 90 days and counting, so, it seems likely that 11 is the real number. If that changes, I'll update in a later post.


"Fast is fine but accuracy is everything." Xenophon

TS Hanna Sept. 5, 2008

A couple of frame grabs below from the Cocoa Beach Pier cam at high tide, 1 PM today, Sept. 5, 2008. Tropical storm Hanna is about 100 miles due east. Wind is 25 mph out of the WNW and air temp is 77 degrees. No rain at the moment but small showers earlier this morning. The 20 mile buoy is reading 17.7 foot swells with 12 second periods. Surf is bigger south but cleaner at the pier and north into Cape Canaveral.

A stoked individual drops in on a big left out in front of the pier.



Also the occasional right peels through. No takers for this one.


Surfing can only be peripherally explained and described. It is far too complex and much too internalized to approach in any other way.
__________________Steffen Mackert

REDUCED! ... meh

Looking up the channel along St. Croix from Fountain Cove.
Merritt Island in the distance and Banana Bay on left.

REDUCED! OWNER MOTIVATED! BRING OFFER! NEW CAR IN GARAGE! $50,000 DECORATING CREDIT! SELLER WILL PAY 2 YEARS OF YOUR MORTGAGE PAYMENTS!

Like Lisa Simpson, when I see any of the above or similar phrases in a real estate listing I usually yawn and say, meh. However, it's the last weekend of summer, seller sentiment is changing and the headline "REDUCED!" is starting to mean something. When I sift through the 129 price reductions on condos and townhomes in the month of August in Cocoa Beach and Cape Canaveral I'm seeing some serious price drops unlike the, mostly, baby step reductions earlier in the year. The pressure of the end of the summer season is apparently being felt and some of the reductions are significant. For example:

Villa Verde 3/3 in south Cocoa Beach from $1.35 million to $899,999
Ocean Terraces 3/2 reduced from $699,900 to $599,900
Cape Hacienda 2/2 from $315,000 to $225,000
Waters Edge 2/2 direct ocean from $259,000 to $219,000
Dolphin Beach from $240,000 to $129,900
Brisas del Mar from $185,000 to $120,000
Cape Shores from $199,900 to $119,900

I don't consider all of these to be good buys even at the newly reduced price but the amount of the drops tells me that the shift in seller mindset is speeding up in it's move towards acceptance and away from denial. Even with the highly picked-over inventory I suspect that the next few months will present opportunity for ready buyers. I would suggest, if you are going to be using a mortgage, that you go ahead and make contact with your lender before you start pursuing a deal. The rules for condo mortgages continue to change and you'll have more bargaining strength if you're already approved or paying cash. If you were pre-approved more than a couple of months ago, you need to talk to the lender again. Things have changed, yet again.

As of today, the Cocoa Beach MLS is showing 24 closed condo and townhome units in the month of August in Cocoa Beach and Cape Canaveral, well below last year's 39 sold units with nothing closed under $500,00. The number may drift up slightly as tardy listing agents update their listings next week. Hope you have a fun Labor Day. Be safe and close your shutters when you leave.

Homer: Kids... how would you... like to go to... Blocko Land??
Lisa/Bart: Meh.
Homer: But ... the TV gave me the impression that ...
Bart: We said "meh".
Lisa: M-e-h. Meh.

Notable August Condo Sales

Spotted dolphins playing around the boat in the ocean off Cocoa Beach.
__________________________________________________

As of this morning, August 23, we have had 18 closed condos in Cocoa Beach and Cape Canaveral in the month of August. Notable sales included:

Lowest price was $59,999 for a small 2/1, Star Beach unit in Cape Canaveral. This unit sold after being listed for only 3 weeks. The seller took 86% of his asking price of $69,900.

The highest price so far this month was $440,000 for a fully furnished, 3rd floor Mystic Vistas unit in the A building with an ocean view. This unit sold in 76 days for 88% of asking price. The selling price was $189,900 less than the seller paid for it in June of 2005.

A 3rd floor corner, direct Banana River 3/2 at Solana River closed for $350,700 after being listed for only 25 days. The seller got 95% of his asking price but sold for $84,300 less than he paid in March of 2005.

A 1725 sq.ft., 3rd floor, 2/2 Shorewood unit with a peek of the ocean sold for $236,000 after being listed five different times for an astounding combined 997 days with an original asking price of $464,900. It closed for 79% of the last asking price but almost double what the sellers paid when it was new in 1996. This is an extreme and costly example of chasing the market down and clinging to unrealistic expectations.

One of the bigger, 2348 sq.ft., Puerto del Rio units with a good river view from the massive, 4th floor wrap- around balcony closed for $233,000 or 78% of the original asking price in January this year. This was $54,000 less than the owner paid new in December 2003.

A Banana Bay townhome in Cocoa Beach sold for $161,000 in just 56 days, 89% of asking price.

And a Portside 1/1 with 943 sq.ft. sold for $92,000, lowest price yet in Portside and $23,900 less than paid for this unit brand new just two years ago.

We've seen four single-family homes close so far this month, all in Cocoa Beach, with waterfront prices from $340,000 to $570,000.

MLS inventory Aug 23, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____742
over $500,000________93
Single family homes___119
over $500,000_________44

If anyone has a particular market segment or subject you'd like covered in a post here, please email me and I'll do my best to accommodate.

"Life is not a matter of holding good cards, but sometimes, playing a poor hand well."
_____________Jack London

The little storm that could - UPDATE 2

As I write this, Tropical Storm Fay has been sitting on Central Florida for 18 hours dumping rain and bringing winds in excess of 60 miles per hour. The center of circulation right now is directly over Cocoa Beach as you can see in the radar shot above and forward movement is down to 4 mph, so, we're in for another long, wet and windy day. I did not see any damage on the way in to the office from south Cocoa Beach this morning other than Yen Yen's old rusty sign that appeared to have a new angle of decline. The shot below is from yesterday (Aug. 19) afternoon. The rain and wind have been pretty constant since that shot and conditions are the same now, 9:16 AM Aug. 20.



The forecast track below shows the storm eventually moving out over the Atlantic just north of Cocoa Beach before turning west and bringing excitement to north Florida. In the meantime, school kids in Cocoa Beach got to miss two of the first three days of school and I'm sitting in the office enjoying the sight of empty streets and bending palm trees in the blowing rain out my window daydreaming about tropical weather days in the past.



"Rain showers my spirit and waters my soul."
_____Emily Logan Decens
____________________________

[Aug. 20 - 5 PM update]

The storm renewed it's assault early in the afternoon and by 2 PM the storm had stalled, the wind had resumed out of the opposite direction at +-50 mph and the storm drains are flowing backwards as the rain continues unabated.



At this point the news channels are claiming upwards of 20 inches of rain so far and another 10 inches possible by tomorrow. The river is up to and over seawalls along all the canal streets and those people with west and south river exposures are experiencing flooding and dock damage. I received a call from a friend on the river in south cocoa Beach with a report of a flooded yard and a loose jet ski banging into the dock. When I got there the waves were crashing over the seawall into the back yard and the jet ski was breaking itself and the dock with each wave. Three of us were able to lasso the thing and winch it over onto the dock without crushing any appendages.



This is the usually dry yard with the jet ski safely tied down, for now.



These are west facing docks on the Banana River in south Cocoa Beach about 4 PM this afternoon, Aug. 20. Ten more inches of rain predicted with diminishing wind. All low areas in the county are now flooded. The bright spot is that we experienced minimal beach erosion and wind damage. At this point it has all been about the historic rainfall amounts.



[UPDATE - Aug. 21]

By dark last night the rising river and persistent southwest winds had some west facing docks in danger and crews were scrambling to shore up seawalls and secure boats.

Noon:Thursday - The rain has stopped and the water is starting to recede although the river may take some time to go down. Kids will likely have to return to school tomorrow after this unplanned three day holiday and I'll return to my normal real estate related postings. As you can imagine, there has not been much activity since Fay first arrived on Monday. Live long and prosper.

New waterfront Cocoa Beach homes

If you've been waiting for the market bottom to pick up a new waterfront home in Cocoa Beach for less than $900,000, your list of possibilities has been whittled down to one. Two of the three that were available closed in the last two weeks and there are none under construction. It will likely be some time before someone risks building a spec home of this type again and prices will have to be higher than these last two closed sales for it to be a profitable venture. The never-lived-in house at 1011 Minutemen pictured below closed this week for $570,000 or $146 per square foot. If we take out the value of the land ($300,000) this very nice new house was purchased for around $70 per square foot. Original asking price two years ago when it was completed was $1,250,000. I presented an offer earlier this year more than $100,000 over the eventual selling price. Click here for a slide show of the house.



The other new house to sell was a 5 bedroom 3.5 bath on Esther pictured below. It closed two weeks ago for $580,000. Original asking price in March 2007 was $799,900. Click here for a slide show of that one.



Last remaining new waterfront home in Cocoa Beach asking less than $998,000 is a 2 year old, 4 bedroom, 2.5 bath on Blakey, asking price $549,000. If you must have new construction and are willing to give up the waterfront, you could always go for a 3 bedroom 3 bath, brand new 3495 square foot beauty at the Enclave across the street from the beach with no view for $995,000. Several available.

I'll parse the condo activity in my next post. The inventory at the moment is looking like a picked over bowl of popcorn. The good stuff has been eaten and unpopped kernels (unbending sellers) make up most of what's left.

MLS inventory Aug 16, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____739
over $500,000________92 - 27 sold since New Year's Day
Single family homes___121
over $500,000_________44

" I look at a hundred deals a day. I pick one." Gordon Gekko