Condo foreclosure this morning

Just a quick note this morning on a new foreclosure offering in south Cocoa Beach. I have written about this unit in the past when the seller was trying to do a short sale and Countrywide had agreed to a price more than $260,000 less than the owner paid. No buyers materialized for the short sale and Countrywide is now the unhappy owner of this unit after foreclosure. They are so unhappy, in fact, that they are offering the unit for $342,900, less than half the $699,000 that the owner paid in December of 2005 when this unit was new.

It's never been lived in, is a 2160 sq.ft., 3rd floor corner, direct river with expansive views across the mile-wide part of the Banana River and has 3 bedrooms and 3 baths. I took the photo above standing in the kitchen looking out at the river. Here's a link to all the data on this unit. Pay no attention to the asking price. It is now $342,900. If you'd like more info on this unit, email me at larry@southcocoabeach.com

From denial to anger

Delay is the deadliest form of denial.
_________C. Northcote Parkinson


This market is getting weirder with every passing day. I presented an offer on a riverfront condo this week with our offering price based on the most recent sale in the same building. I explained to the listing agent that we were offering slightly higher than the sale last week would suggest for this smaller unit. Her response; "That sale doesn't count because those people really had to sell and it had been on the market forever." I suggested that the appraisal of the next unit to sell in the building would certainly use that sale as a comp and the appraiser would not care that they "had to sell" being that it was not a short sale or foreclosure. Her response; "You just don't get it."

She did present our offer to the seller who has had his unit on the market for 274 days with two price reductions. His response to our offer was, and she made sure to quote verbatim, "No, no and hell, no." No counter, he stuck to full asking price. A short while after the agent relayed his response to me, she called back with a new message from the seller who apparently felt he hadn't said enough, "Tell them to go buy another unit." We did just that. Good luck Mr. Seller. You're still overpriced, paying property taxes, insurance, condo fees and interest on an unoccupied unit and the Labor Day precipice is approaching while your neighbors that have come to terms with the market are selling their units.

Fees, utilities, insurance, tax.....+-$700/month
Interest/opportunity costs........+-$1000/month
Reductions so far in asking price...$36,500

Telling a qualified buyer offering a fair price to get lost
.........................................................Priceless

We have had 21 closed sales of condos in Cocoa Beach and Cape Canaveral so far this month. Two notable deals were a 2/2 side ocean view, 3rd floor Chateau by the Sea that closed yesterday for $215,000 and a 2nd floor, direct ocean Sand Dollar 2/2 at Windrush that sold for $310,000. These two sales will have a chilling effect on future sales of units in these buildings. As always, if you're looking, be sure to do your homework and work with someone you can trust who knows this market. You may have to be patient to find the perfect deal as the bulk of the sellers are still deep in da Nile.

"Whoa. Déjà vu."
_______Neo

It's all about the bottom line

We've had an unusually large amount of sargassum (above) washing up on our beaches in the last few weeks since the west winds turned east. Lots of cool little creatures live in this weed when it's floating; crabs, shrimp, sea horses, baby fish and so forth.

I posted back in February in the "Blue Pill or Red Pill" post about the percentage difference between asking price and selling price for condos closed that month. I am seeing more and more buyers keying in on the discount off asking price rather than looking at the final number. Macy's has successfully cashed in on the mentality of big discount = great deal while Wal-Mart and Target have successfully exploited the strategy of low regular prices. It's a natural to want a big discount when purchasing something. It feels good to find a $200 dress at 50% off regular price and then to get an additional 50% off at the register. Great deal, huh? Not if that same dress is $45 regular price at Target. It's just that the Macy's model makes us feel like we got a better deal.

For your consideration here are the first seven condo sales to close in the month of June and the selling price as a percentage of last asking price and the percentage of original asking price.

Ocean Estates - $560,000 - 93% of asking price - 83% of original asking
Emerald Seas - $530,000 - 88% of asking price - 78% of original asking
Saturn Condo - $135,000 - 96% of asking price - 84% of original asking
The Oaks ------- $95,000 - 91% of asking price, this was original asking
Waters Edge -- $354,325 - 96% of asking price - 71% of original asking
Atlantique------$150,000 - 91% of asking price - 68% of original asking
Meridian-------$695,000 - 99% of asking price - 99% of original asking

The point here is that expecting a big discount off the current asking price is probably a recipe for disappointment. Only one of the seven sellers this month accepted less than 91% of their asking price although almost all took a severe discount from their original asking price. Most sellers in this market have had to get through a period of denial to get to a point where they were willing to consider accepting much less than their original idea of their property's worth. To get a good deal in this market it helps to have access to the true listing histories (not readily apparent on the MLS without some digging) and awareness of very recent comps. Armed with this knowledge a savvy buyer can target the listings that are within striking range of fair value and/or those that have gone through several price drops and work towards a number somewhere south of today's value. Your mortgage lender does not care what the asking price was, only what you are actually paying. Forget the discount and focus on the final number. That's the only one that matters.

"Knowledge is of no value unless you put it into practice."
_______Anton Chekhov

Happy Summer

She thinks that happiness is a mat that sits on her doorway.
~Rob Thomas, "3 A.M."

Sorry for the lack of posts recently. I've been at the beautiful spot above about an hour and fifteen minutes southeast of Cocoa Beach for the last week. What an easy trip; park a short stroll from the front door of the Melbourne airport, check-in with no lines and board a small plane for the hour and fifteen minute flight to Marsh Harbor. Pick up the rental boat, cruise over to Elbow Cay and be relaxing on the deck overlooking the ocean in less than 3.5 hours total from walking out the door in Cocoa Beach.


Condo sales in May were brisk, beating April with 45 units closed. This is the first month this year that we have exceeded last year's sales for the same month. The big question now is where are we headed for the rest of 2008. As you can see from the chart above, the sales trends in 2008 have closely followed the action in 2007. Consider the chart below showing last year's action through year-end along with this year's sales so far. If you are a seller of a condominium it would be prudent to examine last year's trend and to re-evaluate your plan for selling your unit this year. Sales will likely continue to fall as we move through the summer. If you haven't had an offer so far, you're probably over-priced. Price your unit aggressively and you stand a good chance of selling. Forty five sellers did just that and sold their units last month.


MLS inventory June 4, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____762
over $500,000________105 - 19 sold since New Year's Day
Single family homes___129
over $500,000_________45

Here's another shot from the Abacos; on a tiny deserted island overlooking the magnificent coral gardens of Fowl Cay between Man O' War and Scotland Cay. The snorkeling here is as good as it gets. This little island has a beautiful sandy beach on the west side and a rocky shore on the east.




There are some days when I think I'm going to die from an overdose of satisfaction.
~Salvador Dali

Take me out for sushi

This post will be short and sweet and potentially worth thousands to owners of single-family homes in Florida. In a radical departure from typical government inefficiency, the governor has set up a wonderfully useful website for homeowners to compare insurance rates for all companies that write in each of Florida's counties. Click on your county on this map of the state and see actual rates and links to each of the insurance companies. The range for the same house in Brevard County is from a low of $1034 to a high of $3213 annually, not insignificant. You can take me out for sushi with some of your savings.

You're takin' me down with a home field advantage.
And you're callin' me out with a home field advantage.
________________________Drive-by Truckers

Cocoa Beach Bunnies

This is a true beach bunny. He lives in the dunes between my back door and the ocean and ventures out into the back yard daily for a little snack of St. Augustine grass. You can see a blade in his mouth in the photo above. He is actually a marsh rabbit, a smaller darker version of the eastern cottontail rabbit with strong swimming skills. Marsh rabbits have shorter ears and no cottontail. This guy or one of his relatives strolled into my living room one evening when I had the door open. Just another in my long list of reasons why I love this town. Now on to this week's train wreck.

I was looking at a foreclosed river condo yesterday. As always, I investigated it's sales and listing history. What I found was not pretty. This particular unit sold new at the peak of the hysteria in June 2005 for $429,900. It was resold in June of 2007 for $344,000 and is now for sale once again for $254,900 by Fannie Mae, the less-than-enthusiastic new owner. That is some serious evaporation of wealth with the pain spread among the previous owners and lenders. At the new price, this unit is priced at $124 per square foot, approaching replacement cost. I predict that it will sell quickly. Hopefully, the new owner will get more enjoyment of this unit with a beautiful river view than the previous unfortunate owners.

Another interesting couple of sales recorded this month in Chateau by the Sea. Both units were owned by the same seller and both were offered as short sales . One unit closed for $323,000 and, three weeks later, the slightly smaller unit next door in similar condition closed for $390,000. Somebody got a raw deal. I can't say this enough, people. Do your homework or work with a good buyer's agent who will do it for you. Question everything. There are good deals going down almost daily but there are also buyers paying too much who could have saved thousands of dollars by doing some research.

Two Waters Edge three bedroom units on the ocean sold this month. Both were in great shape, one on the forth floor and one on the second. The forth floor sold for $348,000 and the second floor much-nicer unit is scheduled to close soon for slightly more. Click here for a slide show of one of these units. This is what the mid-$300s will get you in Cocoa Beach these days. Until next time, keep your hand firmly on your checkbook and question everything you read about the housing market.

Make me an offer....please!

I show dozens of properties in Cocoa Beach and Cape Canaveral every week to prospective buyers. I screen for available properties that fit the buyers' criteria and then sort for best value among the fits. Some can't be shown for various reasons; uncooperative tenants, incomplete or incorrect directions, keys elsewhere, and on and on. The ones that actually get shown inevitably generate a few phone calls from the better of the listing agents asking for feedback. Here's a typical call;

listing agent, "Larry, just calling to get some feedback on my Best Condo in the World listing that you showed Saturday."

me, "It's a beautiful unit. The Rockefeller's loved it except for the price. The comps are telling us that it's over-priced by at least $80,000."

listing agent, "Well, bring me an offer."

me, "Sorry, with a price so far out of the game my clients don't want to waste their time with an unreasonable seller. They chose to offer on another unit in the building that is priced closer to recent sales. I appreciate the call."

Lesson for sellers: Pricing way too high and praying for an uninformed buyer is only hurting your chances with the active buyers who are informed. Get real with your price and you have a good chance of selling.



Condo sales, though increased in the last month, continue to lag last year's numbers. Through April there were 127 closed condos sales in Cocoa Beach and Cape Canaveral compared to 153 in the same period last year. Of the 39 closed sales in April only four were for more than $400,000. A full half of those condo sales were under $200,000. Inventory of properties for sale is shrinking in all categories except for over-$500,000 condos. Supply in that troubled sector of the market continues to creep upward while sales are plodding along at the brisk pace of about one every two weeks. Sellers of luxury condos take note.

MLS inventory May 14, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____798
over $500,000________119 - 11 sold since New Year's Day
Single family homes___131
over $500,000_________46

Welcome to the new readers in Portugal, Algeria, Pakistan, Jordan, Macedonia, Albania, Latvia, Dominican Republic, Cayman Islands, Curacao, Bermuda, Cuba and Venezuela. I would love to hear from you and what your interest in Cocoa Beach is.

"Putts get real difficult the day they hand out the money."
Lee Trevino

Ch-ch-ch-changes

In the ever changing landscape of south Cocoa Beach, another landmark is gone. After eighteen years, Natural Art Surf Shop has closed it's doors and morphed their operation from a bricks and mortar hangout and popular weekend contest venue to an internet only retailer. Their boards and products can still be found online at NaturalArt.com and I suppose the weekend contests can still be held if the eventual new resident will tolerate the surfers' cars. I'll see you in the water.