Surprise, surprise

Here we go, again. After the passage of Amendment One, the property tax relief bill supported by the Florida Association of Realtors among others, there was wide speculation that individual cities and counties would increase millage rates to make up for the lost revenue. Orlando appears to be among the first to float that idea. In last Tuesday's Council meeting the majority of members stated their support for a 21% increase in the millage rate to make up for the $30 million budget gap that resulted from the passage of Amendment 1. Most of us who opposed Amendment 1 did so because we doubted the willingness or ability of the bureaucracy to reduce spending and expected offsetting higher millage rates in the wake of successful passage. I don't have a solution but slashing taxes at the state level without a solution for replacing the revenue doesn't seem well thought out.

Now, the same groups are pushing for support of Amendment 5 or, as they are calling it, "Amendment 1 on steroids". As before, the Florida Association of Realtors supports slashing property taxes because they believe that will increase sales activity, which is, naturally, their primary concern. And, as before, they have no solution for replacing the lost revenue other than a one cent increase in the sales tax which will still leave an $8 billion with a "B" shortfall. As a dues paying member of both the Florida Association of Realtors and the National Association of Realtors, I am embarrassed by their wasteful, self-serving campaigns ranging from NAR spending $30 million in 2006 and 2007 to tell the public that "Now is a great time to buy" and the current $1 million campaign by FAR to entice the public into supporting a bill that is likely to backfire just like Amendment 1 is now beginning to do. For the record, if it's not clear from the above, I oppose this half-baked idea to reduce property taxes. I support lower taxes but this just ain't the solution.

"Prices have stabilized and are starting to rise."
___November 2006 - National Association of Realtors ad, NY Times



"I triple guarantee you, there are no American soldiers in Baghdad."

The Sweet Smell of Summer

One of the sweet smells of summer in Cocoa Beach, frangipani (aka plumeria).

As of today, the 24th of July, we appear to be on track to closely mirror last year's sales for the month of July in Cocoa Beach and Cape Canaveral. For the last five years, sales have peaked between April and June and then trended down to the lows of the year between October and January. Typically the number of closings falls off the cliff in October reflecting September's abrupt drop in sales activity and doesn't recover until February. I expect the same for this year.

Recent sales of note include a 4th floor, direct river 2/2 at Four Seasons in Cocoa Beach for $185,000 and a 5th floor, direct river 2/2 at Sunset Harbor that sold for $165,000. Best oceanfront deal of the month was a 4th floor, north corner 3/2 Ambassador Shores unit that I was able to negotiate on behalf of a buyer for $235,000. Unfortunately, our contract was taken away by another owner in the first right of refusal process that is in place at that building. We have had two $500,000+ units close so far this month, one of them a new unit at Meridian on the ocean. Of the 21 MLS-listed condos to close so far this year for over a half million dollars, nine have been at Meridian. I hope the buyers agents are doing the right thing and disclosing in advance and sharing with their buyers the excessive commissions being paid to them by the developer. Long-time readers of this blog know my stance on agent incentives. The practice reeks like shrimp heads in a hot dumpster. If you never read my first posts on the subject you can read them here.

Single-family home sales have been tepid with only three closed sales so far this month. One was a small but very cute 2/1 home with a pool one block from the ocean and 1/2 block from the river in south Cocoa Beach that went for $195,000. There are pending deals set to close soon that will cause some teeth-gnashing and rending of garments. I will report on them as they close.

As of yesterday, ten of the developer's auctioned units from the May 17 auction at Mystic Vistas in Cape Canaveral have been recorded on the property appraiser's site for prices ranging from $181,500 to $275,000. These were all new units from 1686 to 2059 sq.ft.

From Bankrate.com: "This week (July 17-23), 70 percent of the panelists believe mortgage rates will rise over the next 35 to 45 days."

MLS inventory July 24, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____753
over $500,000________95 - 21 sold since New Year's Day
Single family homes___125
over $500,000_________44

For those of you waiting for an outstanding deal, the pickings are slim. There have been very few priced-right new listings in the last few months and the ones that have appeared have been quickly snapped up. Be ready to pounce if you want to steal something and don't rely on the tardy listings at some of the popular real estate web sites. Your buyer's agent, if she's good, is your best weapon for early notice of hot listings. Justify your low offers with comps and/or well articulated reasons for a better chance at success.


"Honesty is never seen sitting astride the fence."
_____________Lemuel K. Washburn

Whoa....Déjà Vu

As a buyer's agent I don't pursue listings and usually suggest another agent that I trust (it's a short list) for listing inquiries depending on the location of the property. I have made an exception for the building above. I have history in this landmark downtown Cocoa Beach location and thought that the connection I have with the property made for a harmonious fit. I owned a business that operated out of this building back in 1992, hence the déjà vu title (a quote from Neo, by the way). Since I moved a series of tenants including Munson Surfboards, Da Kine Diegos restaurant and, most recently, Beach Culture Surf Art have occupied the space. It picked up the Rick Piper mural across the front a few years back and is now for sale for the first time in years. For someone interested in a commercial property 2 blocks from the beach and walking distance from the two dozen or so restaurants and bars in downtown Cocoa Beach, this could be it. Offered for $199,900. Email me if you'd like to know more. If you'd even consider painting over the mural, it probably isn't for you.

"Every child is an artist. The problem is how to remain an artist once he grows up."
__________Pablo Picasso

July 14 Update

I grabbed the frame above from the Cocoa Beach Pier cam just a few minutes ago of a few guys catching the last few sets of the Hurricane Bertha swell.


MLS inventory July 14, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____758
over $500,000________99 - 18 sold since New Year's Day
Single family homes___127
over $500,000_________47

Deals of note

New 1702 sq.ft., 3/2.5 Sea Spray townhome in Cape Canaveral,
______closed last week for $155,000

Third floor side ocean view Chateau 2/2 - weekly rentals
______closed for $215,000

Direct ocean 3/2, 1548 sq.ft. in a 4-unit building in south Cocoa Beach
______closed for $335,000

There's something happenin' here
What it is ain't exactly clear
________Stephen Stills

Back after a rest

Sorry for the long lag since the last post. I've been away for the last 10 days but a new post is forthcoming. The shot above was my sunrise this morning before a boat ride and a short plane trip back to Cocoa Beach. Some of you can probably guess where. Here's a hint. The shot below was taken a few minutes later of the last few sets of the Hurricane Bertha surf breaking out behind the house before the boat ride.



New post on the Cocoa Beach market by Monday.

Everything is fine, ...really

The market has bottomed, inventory has dried up and prices are expected to skyrocket next year. Buy now or be priced out forever, historically low mortgage rates, population explosion, baby boomers, European buyers, median price up, year-over-year sales up, blah, blah, blah.

Let me translate the above Realtor-speak; "I will tell you anything in hopes of generating a commission check." Folks, some segments of this market are still dangerous and it would be prudent to be cautious with your real estate search. If your agent is saying any of the above phrases while waving his Time2Buy button before your eyes, put your hand on your checkbook, yell "watch out for the squirrel" and roll out of his Lexus onto the pavement. The damage to your body will probably be cheaper than the damage to your finances that was about to happen. This is historically the busiest time of the year for sales in our market and it would be easy for me to tell you that the recent activity in our market is evidence of the end of the troubled times, but, it just ain't so. There are scattered super deals to be had but they do not represent the bulk of the available listings and, if you aren't on top of recent activity, you won't be able to recognize the deals when you see them. The vast majority of current listings are over-priced. You need to be able to determine current value and negotiate a price below that number. If you can't, move on. The patient buyers are being rewarded.

There is a special danger in the high-end condo market as developers are sitting on dozens of units that they cannot move. Most of this inventory is not on the MLS so the reality of this segment of our market is hidden from examination but my observations tell me we are approaching a tipping point. No one knows how this will play out in individual complexes but the recent auction by the developer at Mystic Vistas likely sent a chill down the spine of every owner in that complex, especially when the record low prices became known. Owners in other not-sold-out new buildings and complexes should be similarly concerned. When a developer decides to unload his remaining inventory, all other units' values will be affected. If you're looking to buy in a new building, ask how many units are still unsold, find out how many (if any) owners are delinquent on their monthly fees and, most of all, be prepared to wait a long time for any appreciation. No rational person can look at the level of inventory and the rate of sales in the high-end condo market and expect things to turn around anytime soon. That doesn't mean there are no good reasons to own a condo in our great community. If you can strike a great deal and don't mind the possibility of no appreciation for a while, the best little beach town in Florida is waiting for you. The market decline so far does not appear to have affected the beach, the surf or the fishing. The market's direction was the last thing on my mind this morning as I stalked tarpon in the surf before coming to the office.

My intent from the day of my first post here in 2005 was to give you readers timely, accurate and honest information about the Cocoa Beach and Cape Canaveral real estate market. From the hundreds of emails I've received over the years, I know that many of you have profited from knowledge gained here. There is wheat and there is chaff. If you're buying or selling real estate in our market, you better know how to separate it.

'When the tide goes out, you can see who isn't wearing shorts.'
________________Warren Buffett

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