It IS Different Here! [another past favorite]

[This post was originally published on Halloween Day 2008. It is still relevant and true so I thought, partly motivated by laziness (if that isn't a contradiction), that I'd repost for the newer readers enjoyment.]

There is a long list of thought-terminating real estate clichés that are to the truth as fingernails are to a blackboard. Among the nominees for the best is the title of this post. Other self-serving RE industry creations are "Now's a great time to buy", "Real estate only goes up", "Interest rates are at historical lows", "Buy now or be priced out forever" and on and on. In spite of the transparent purpose of these phrases when used by Realtors about the real estate market, I will venture that "it is different here" has some compelling resonance when said about Cocoa Beach as a community. I'm not speaking as a Realtor, rather, as a resident. Our market is subject to the same influences as other markets across the state of Florida, but, it only takes a drive down A1A through the four or so blocks of "downtown" or a stroll along the uncrowded beach on a beautiful day to realize that the absence of crowds and the small-town sense of community here is a rare commodity to be treasured. I am guilty of taking what we have here for granted but it only takes a moment mired in traffic in any another coastal community in our state to remind me how good we have it. Name one other coastal Florida town that has a "Walk your child to school day" or that has a maximum speed limit of 35 MPH or whose population has not increased in the last 20 years. That is Cocoa Beach. It IS different here. If you're looking to purchase here, do your homework, know what represents good value and bargain hard. Remarkable deals continue to happen in the best little beach town in Florida.

Mosquitoes can be a problem in many areas of Florida but the constant sea breeze keeps the ocean side of the road pretty much free of them and other flying insects. On those few days that the wind shifts around from the west, mosquitoes and other small insects get blown over A1A to the ocean side and tuck into the lee of oceanfront buildings. When this happens, the dragonflies come out en masse to take advantage of the easy meal. The photo at the top is of one of these other-worldly creatures that share our airspace on offshore days like we've had recently.

"We don't see things as they are, we see things as we are."
______Anais Nin

In the Rearview

It's the last day of 2013 and the time when we look back at the significant events of the year. For the Cocoa Beach real estate market it was a year of continued recovery with one massive unexpected event. Our big event was the change of MLS providers in July that destroyed the Melbourne Association of Realtors. Without going into detail, their leadership went all-in on an MLS bluff that was called by the membership. Brevard County will have one united Realtor association in 2014 as a result. Democracy won the day. I suspect my suggestion of a new name, Florida United Brevard Area Realtors, will be rejected because of the unfortunate acronym. Whatever.

As was evident much earlier in the year, 2013 finished as another record-breaking year in numbers of sold properties in Cocoa Beach and Cape Canaveral. The MLS this morning is showing 659 sold condos and townhomes in the year in our two cities and 121 single family and half-duplex homes. We have to go all the way back to 2005 to find another year that exceeds those numbers. Active for sale inventory stands at about half the sold numbers for the year. Subtract the yet-to-be-built (and unlikely to be built soon) properties and pickings are slim.

The lowest priced single family home to sell in the year was a 1000 square foot 3/1 in need of a lot of work in Cape Canaveral close to the beach that closed for $85,000. Highest price paid in the year was $1,430,000 for a furnished seven year old 4/3.5 with 3379 square feet on 50' of ocean in south Cocoa Beach. Just over half of all single family homes sold were waterfront.

Eight small (+-400sf) condos sold at prices between $20,000 and $30,000. A total of 165 sold for less than $100,000. In the half million dollars and up range, there were 23 sales with the highest at $750,000 for a penthouse 4th floor 4/4 corner on the river at West End Rd. behind Florida Seafood. It was furnished, had 10' ceilings, 4299 square feet and came with 2 garage spots. Eight of the $500,000+ sales were at the Meridian.

23% (149 units) of the closed condos were either short sales or foreclosures. There are 32 total short sales and foreclosures currently for sale out of 312 total.

2014 promises to be interesting and different than 2013. Sellers can reasonably expect to get more than they may have gotten this year. Whether they get enough to make up for the cost of waiting remains to be seen. I expect the number of sales to be less in the coming year even as prices are higher and I expect the decline in distressed sales to continue as well. To those involved in our market I wish you a prosperous new year. Snowbirds, stop by my office while you're in town and say Hello. Don't forget to make some room at the free coffee station at Publix for your fellow birds. Happy New Year, all.

For the loser now
Will be later to win
For the times they are a-changin'.
_____Bob Dylan

Blast From the Past

Another One Bites the Dust (originally posted October 4, 2007)  In 2013 we saw almost all the remaining Magnolia Bay units finally sell. It's been a long hard road. I thought the readers who may not remember the drama of 2007 during the construction might appreciate this look back at the time of construction and some of the unintended consequences. There is a new store in the old Express Grocer spot now and they seem to be doing OK. The site of the old trailer park is occupied on one half by a self-storage facility and the other half by nothing. I have no idea where Sam and Gary are these days.

Oct. 4, 2007 - This unwinding of the housing bubble has touched many lives. Besides the flippers who were too late to the party and people who bought more home than they could afford with exotic mortgages, some innocent victims have been dragged down, too. A deadbeat homeowner in my building has decided to walk away from her mortgage and will be leaving the remaining owners with thousands in unpaid assessments. My life will go on even though it riles me to have to pay for someone else's bad choices. It may hurt more for my retired neighbors. More heartbreaking is the impact on the decent people who run the small grocery store close to my home. They didn't speculate on pre-construction condos or try to flip houses and yet their lives have been changed forever.

It all began when construction began on the big empty parcel of land that was to become Magnolia Bay. Business picked up as workers walked over for lunch, snacks, cigarettes and so forth and the promise of all the new families that would be moving in made the future look bright. Shortly thereafter, the trailer park next door that housed the biggest part of our grocer's customers was purchased. With plans to build townhomes on the site, the trailers were progressively moved out or torn down until the property was empty. Things were still looking good even with the loss of the regulars. With 77 new half million dollar plus Magnolia Bay units and 18 new townhomes right next door, the customer base was growing and being upgraded and the construction workers were providing business in the interim. Life was good.

Then, Magnolia Bay sales slowed and the planned 4 buildings got scaled back to 3. Scheduled closings failed to happen and the construction workers finished their work and moved on. Today, the grand buildings at Magnolia Bay are mostly empty and dust blows in the sea breeze on the site of the old trailer park. The only townhomes there today are in the picture on the "coming soon" sign. Business at the grocer who stocked my favorite beer in a corner of the walk-in cooler at my request dried up to a trickle and, this week, he told me that this is his last month there. He can't make it any longer.

There are multiple losers in this story; the developers of Magnolia Bay, the trailer park residents, some of whom had lived there for decades, the owners of the trailer park property, the customers of Express Grocer including me and, most of all, Sam, the grocer and his family, and Gary, his long-time employee, who has been known to extend credit to a down-on-his-luck customer or two. Sam, your family, and Gary, you will be missed by many. You are good people.

My favorite Express Grocer memory will always be the sign that appeared on the door one day. It read:

Do not ask Gary for credit. He is not allowed to give it anymore. Sam

Optimistic Bankers

US temps 12-11-2103

I made a quick mention in the last post about the trend in asking prices for foreclosures. The recent trend has been towards higher and less aggressive asking prices. In the not too distant past, most foreclosures in the Cocoa Beach and Cape Canaveral market would have multiple offers within the first few days after hitting the MLS and would usually sell for full or above asking price. That is no longer true. The buyers have given a collective Ho Hum to the banks' recent optimistic prices and many attractive foreclosure properties are not getting quick offers. Of the 23 bank-owned condos on the MLS this morning, 11 have been listed for longer than a month and 9 have reduced the original asking price, one by 24%, still without a sale. Five of the 7 short sales currently active have reduced their original price.

Our takeaway: just because it's a distressed sale doesn't mean the asking price is a deal. Know the current value and offer accordingly. As always, knowledge is power.

""If you can't fix it with a hammer, you've got an electrical problem." ___unknown

Where Are We Right Now?

It seems just yesterday that I was writing the year-end wrap up for 2012 in Cocoa Beach and Cape Canaveral and commenting on the record-breaking number of sales. We still have the month of December to go and we've already exceeded 2012's numbers with 623 MLS-listed condos and 116 single family homes closed so far. Inventory numbers have increased recently but after we remove the noise of the pre-construction listings and the way-overpriced, been-on-the-market-forever listings we have about a five month supply of properties for sale at the current sales rate. The MLS shows 310 condos and townhomes for sale this morning with 55 of those having been listed for over a year. Most everything that's been for sale for over a year qualifies for my "not really for sale" designation for obvious reasons. There are 31 short sales and foreclosures among the 310 units for sale including a 4th floor Meridian asking $649,900. The banks' asking prices for foreclosures have crept up into the meh range and many of the foreclosures are languishing on the market as a result. There are only a few of the 31 distressed sales that I would consider a "great" deal.

Here's an excerpt from a post exactly one year ago. The sentiment expressed persists.

"I had an interesting conversation with a prospective buyer last week. Among his criteria was "being able to take advantage of the poor market conditions in the area in terms of significant below market pricing and leveraging the fact that he'd be paying cash". "Poor market conditions"? The current market would be better described as en fuego (see the previous post). "Significant below market pricing"? I'm not aware of any sales happening at significantly-below market prices. Buyers are standing by ready to purchase good properties when they're priced at current levels with over half of them paying cash. I suspect this particular buyer is going to be looking for a very long time unless he modifies his expectations."

The song remains the same. Buyers with specific criteria are having to search for months in many cases for the right property. Those with popular criteria like direct ocean condo above the ground floor sub-$300K (5 available today) or canalfront home under $350K (3 available today) can expect competition when a good unit hits the market. Buyers, be patient and ready to move quickly when a desirable property surfaces. Even though we have moved off the bottom, prices have not run away. Deals exist for the persistent. Those seeking a mortgage would be advised to start the process before starting the search. A note about  search criteria. Don't trust descriptions in the MLS to be accurate. I searched for oceanfront condos above the ground floor with a front door facing west asking less than $300,000. The results included two Conquistador units in the building across the street from the ocean and seven others with balconies facing either north or south. Some actually had doors facing west with balconies facing south but some others were just incorrectly described. Maybe inadvertently. Maybe not. The internet is great for buyers doing their own searches from afar but nothing beats boots on the ground here and local knowledge. If you need those boots and knowledge, contact me. My motto; No BS.

Denver this morning is at zero degrees with an expected high of 16. We are forecast to reach 77 under clear blue skies with a light SE breeze. Offshore fishermen are catching sailfish in decent numbers and some pompano are being caught in the surf. Conditions are ideal for both at the moment.

The photos are of  Tuesday's launch of the Space X Falcon 9 in it's first mission to deliver a commercial satellite to geostationary orbit. The new kid in town makes a big statement with this mission.

"I always tell people, the first $500,000 is the easy part of the deal. The deal will come apart over nickels and dimes." ____Mike Jaquish

Fool Me Once

NOTICE: We've had some major email disruptions in the past month and I have not received all mails. If I haven't responded to a recent mail, chances are, yours was one of the lost ones. Please resend to the hotmail address in the header of this blog and I'll respond immediately.

What can I believe when looking at real estate listings online? I spoke with someone yesterday who noticed a listing that was previously under contract had just come back on the market at Realtor.com. When I researched the MLS history it showed as still under contract and continuously so since the end of October. So, why did Realtor.com show it as back on the market? The only thing I can figure out is that when the listing agent changed the status from "contingent" to "pending" it triggered a status change which conveniently and incorrectly defaulted to "active/for sale" status rather than "under contract". More page views = more revenue. None of the major non-MLS real estate sites can be trusted to be up to date and accurate. Actually, nor can BrevardMLS.com, but, it is the most accurate by a mile.

The errors on BrevardMLS.com are mostly related to agent errors or circumstances, not a policy intended to boost page views. Foreclosure listings often remain active for a few days following acceptance of a contract because the banks are slow to get all the paperwork signed and delivered. Short sale listings are sometimes left in active status for months even though the seller has accepted an offer that is being negotiated with the bank. Sometimes a listing agent will mark the wrong area by accident. AND, some listings marked as "waterfront" may be a looong way from the water. There are two active listings this morning that are designated as "waterfront/ocean" that are over a half mile from the ocean. The condo project that they are a part of extends to the ocean so these listings are allowed to be tagged as oceanfront even though some units are as far as 3/4 mile from the beach. The units here are nice and the prices reflect the distance but the "oceanfront" status is misleading.Your agent can fill you in on the details of any too-good-to-be-true listing.

For buyers looking for listings with specific criteria, the best way to be on top of the accurate data is to have your agent set up an auto-alert directly within BrevardMLS.com with whatever criteria you desire. The system will send you an email whenever a new property with your criteria is listed or an existing listing has a price change. The mainstream for-profit real estate sites can't match the timeliness or accuracy of the source. I'd be happy to set up an alert for any readers without one.

When the axe came into the woods, many of the trees said, "At least the handle is one of us."  __Turkish proverb

10 More Questions

Do agents lie about multiple offers? - I've written about this before. It seems to be universal among buyers to believe that the listing agent is always lying when she says she's received another offer. People, it just ain't so. It probably has happened somewhere but there is absolutely no need for a listing agent to make up a story about another offer in hopes of getting a slightly higher price. (see next question) The chance of chasing off a distrusting buyer is too great. Buyers, if you receive a call for your best and highest offer because of the existence of another offer, don't shoot yourself in the foot by withdrawing. If you wanted the property enough to place an offer in the first place, at the very least, stick with your original offer. It's your call if you want to sweeten your offer.

Do agents try to influence higher price for greater commission? - Not likely ever true. There seems to be a belief that agents, buyer's and seller's, want a higher price in order to get a greater commission. The math proves this one wrong. Even if either or both agents were able to influence a price up by $10,000, each agent's check would increase by a couple of hundred dollars in most cases. Not worth the risk of losing a deal for a couple of Benjamins.

Don't both agents work for the seller? - Absolutely not. The seller pays all the commission to their broker in most cases who shares part of it with the selling broker. Even so, as a buyer's agent, I am working solely for my buyer's best interest. The only exception to this would be when the buyer's agent is also the listing agent or when the listing is within the same brokerage as the buyer's agent. This is a persuasive argument for not using a buyer's agent from a company with a lot of listings in the market the buyer has targeted. A buyer's agent showing one of her company's listings is prohibited by law from advocated on behalf of the buyer. She must remain neutral, honest and fair. I, as a buyer's agent from another company, am not so restrained. In fact, I am bound to fight for my client and to use all fair means to get the best possible deal. Remember that when thinking about contacting a listing agent directly. It is rarely in a buyer's best interest to deal directly with the listing agent even if that agent is willing to concede part of the commission. See the next question.

Can't buyers get a better deal by dealing with the listing agent? - Not usually. As I explained above, the listing agent can't advocate for the buyer. While she may agree to shave off a percentage point for getting both sides of the deal she is prohibited from telling you, for instance, that your offer is $10,000 more than the seller countered my client last month in his failed attempt to buy the house. Think I'd let you make that too-high offer? Not.

Do agents not show buyers all listings? - sometimes. With the public able to view all listings on the internet, a buyer is able to do her own research and to find attractive listings that appear to match her criteria. When her agent doesn't include one that she has found on her own she becomes suspicious that her agent is either slack or deliberately excluding listings. Both may be true. The most likely reason a listing is excluded is that the agent has seen the listing and is aware that the MLS photos are misleading and the property is not what it appears to be online. It's amazing how many of the beautiful ocean view photos in our local listings are not the view from the unit. I get scores of inquiries about amazingly low prices on units with gorgeous open ocean views. What is usually the case is that the view in the listing was shot by Spiderwoman listing agent hanging off the side balcony shooting 90 degrees to the side with a zoom lens to exclude the huge timeshare building next door. As an active market participant here, I know that but to a prospective buyer in Fresno viewing it on awesomecondos.com, it looks like a steal for $199,000.

Then there are all those already sold or under-contract listings that still show up as "for sale" on the big real estate websites. There's a reason those websites are slow to remove a sold listing. It's called advertising revenue. Do your searching at BrevardMLS.com. It's the only site you can trust to always be up to date.

Do agents show only (or favor) their own company's listings? - It's very unlikely that an agent in our market would show only her company's listings considering the very low inventory right now but I can certainly see an agent favoring her company's listings. Brokers sometimes offer additional incentives for selling an in-house listing.

Do listing agents try to get sellers to sell too cheap? - Possibly. A hungry or lazy listing agent might encourage a seller to list too low or to accept a too-low offer in the interest of getting a quicker check. More often than not, an offer the seller thinks is too-low is right in the fair market value range. A good agent will always encourage a seller to accept a fair  offer even if the seller thinks it's too low. Sellers almost always expect to get more than their property is worth.

Won't "For Sale By Owners" net more money than sellers using a listing agent? - Sometimes, but for reasons one might not expect. A FSBO will not be paying a listing commission although they sometimes are willing to pay a buyer's broker. What is definite is that they are not planning on giving the commission savings to the buyer. They didn't forgo the convenience of having a listing agent in order to give a buyer a better deal. No, sir. The intention is to pocket more money. That same mentality is why so many FSBOs are overpriced. Match those sellers with a buyer enamored with the idea of buying without a Realtor and you have a recipe for an above fair value sale. Buyers, do your homework. It's not about the commission. It's about the final price. 

If a seller cancels a listing, do they pay a fee? - Sometimes but usually they shouldn't. A listing that requires expensive marketing and effort should carry some sort of cancellation fee to recoup expenses in the event that a seller prematurely ends the listing. Most listings should not carry a cancellation fee. A seller who doesn't like her listing broker should be able in most cases to cancel the listing with no penalty. This is not a popular opinion in the business but it is mine. Make sure you know if your listing contains a cancellation fee before you sign.

Are real estate websites a good way to find an agent? - Sorry, no. Agent reviews on all of the big online real estate sites are suspect. They are predominately and suspiciously positive. Beyond the reviews, any agent can throw money at these sites and establish a big presence. Big online presence does not guarantee competence or performance. This is doubly true for an agent's own website. If you're looking for an agent to represent you as a buyer or to list your property, talk to a few. Lacking a recommendation from someone you know, your gut perception is your best tool for selecting an agent to represent you. A little skepticism will serve well. We're not all crooks regardless of public perception.

Charlie don't surf. We really think he should. __The Clash

Sold Condo Price Ranges

Price ranges of sold oceanfront condos in the last two months:
Side view and partial ocean view units have been selling mostly in a range from $150 to $205 per square foot with the average at $170/sf. The higher range has been represented by units in buildings in good repair and/or remodeled interiors. Side ocean view units bringing above the average were in buildings including Artesia, Stonewood, Windward East, Royale Towers and Sandcastles.

Direct ocean units above the ground floor with unobstructed views have sold in a range of $196 to $281 per square foot with an average of $235 per foot. I did not include in the average the two highest sales at the Meridian which sold for $313 per square foot and the low which was a 1/1 at Triton Arms downtown Cocoa Beach with no garage that closed for $172 a foot. Like the side view units, units in well-maintained and/or newer buildings commanded the higher end of the range. Those included Michelina, Meridian and Solana Shores.

These averages and ranges are a good starting point for trying to put a fair value on a unit but they can't be definitive because of the many variables among the sold units. For those looking to buy or sell, it makes sense to be realistic about all the conditions affecting valuation. An otherwise identical unit that is not remodeled can't be expected to fetch the same price as the neighbor's remodeled unit. Garages, contents, age of appliances and AC systems, quality of view, existence of shutters, etc. all affect value and should be taken into consideration.

For units yet to be sold/purchased, there are constants, however. In almost all instances, sellers will expect their unit to command top of the range or beyond regardless of condition. This is especially true at present as prices have been moving up. Buyers on the other hand will be seeking to pay at the bottom end of the range or below, again, regardless of condition. When offering, including well-researched comparable sales with adjustments for variables, will go a long way towards bridging the gap between the opposing desires. Throwing a lowball offer without good justification is a waste of time. Likewise, a listing asking 20% above recent comparable sales better have some believable rationale if they expect to sell. If you're buying or selling, do your homework and be prepared to prove the case for your number. The comps are available for everyone. As I've said before, the Property Appraiser's and Zillow's estimates of value are not to be take seriously.

Somehow, even with our depleted inventory and abundance of unrealistic sellers, 50 condos and townhomes closed in the month of October in Cocoa Beach and Cape Canaveral. There are 282 units for sale this morning with 9% of the total distressed (short or foreclosed). We look to easily exceed last year's record sales of 612 units making 2013 the biggest year for number of sales since 2005. I'm not sure what next year will bring but I think it's safe to say that prices will be higher and inventory will continue to be in short supply. New mortgage rules and flood insurance uncertainty will both impact buyers hoping to finance a purchase. Cash will almost certainly continue to dominate the closed sales.

"My definition of art used to be narrow. Now, I consider anything that conveys intent to be art. It's a wide open door, I feel no anger towards stuff that's obscure. There's far too much effort put into things that are downright backwards and evil to harbor any ill will toward artists." unknown Redditor