We Have a Situation

Sunrise Thanksgiving morning in south Cocoa Beach

Our condo market is in trouble. The trouble started with Covid but is just now becoming apparent. The number of units sold in 2021 was the highest since I began keeping records in 2004. There were 863 closed condo sales in Cocoa Beach and Cape Canaveral that year. Prices had not yet returned to 2005-2006 levels for most units but there was a strong uptick in selling prices as demand climbed following the Covid lockdowns of 2020. Inventory had been in a broad decline since 2006 and bottomed out in 2022 adding fuel to the demand/supply imbalance. In April of 2022 there were less than 40 total units for sale in our two cities and buyers exceeded sellers by a large margin. Most new listings sold within days. Multiple offers were common and the legislation in response to the collapse of Champlain Towers South in June 2021 had not yet been signed into law.

Following the exuberance of 2021 and 2022, inventory began rapidly climbing at the same time prices began leveling out. The legislation requiring condos to establish a fully-funded structural reserve fund was signed into law in June 2023 with a deadline for compliance of December 31, 2024. As a result condo fees exploded as condo associations were forced to increase them in order to fund the new reserves and in some cases levy special assessments to repair existing structural issues. These fee increases didn’t happen overnight and in the meantime enthusiastic buyers continued to buy condos.

2025 sales shown through late November

By December 2024 the inventory of condo units had climbed to 298 units and most condos had raised fees and demand had cooled. Many sellers were clinging to expectations of the previous years’ selling prices but buyers were not sharing those expectations. Instead of $550 a month fees and a 3% mortgage like a few years earlier, a buyer was now looking at over $1000 a month fees and a 7% mortgage for the same unit. Justifying a beach condo was no longer possible for many buyers and they suspended their search. Sellers, on the other hand, clung to their visions of 2022 and refused to accept that the market was changing. Many of those sellers are still on the market although some are beginning to realize that the prices of recent years are not realistic in this market.

There are 30 units for sale right now asking less than the sellers paid in 2021, 2022 or 2023. There are another five asking within 2% of their purchase price and nine units who have curbed their enthusiasm with price drops between 23% and 40%. The most extreme example at the moment is a unit at 60% of the original asking price. This seller was asking $2.1 MM in 2024 and is now hoping to get $1.275 MM. The reality checks are not confined to the upper price range with listings like a unit in a riverfront complex that was asking $240,000 a year ago now down to $160,000.

Inventory has inched back up to 313 total units for sale this morning with a median time on market of 93 days, 81 of those units for sale over six months. Everyone is hoping for a strong selling season in the spring but the friction for buyers isn’t going to disappear with the arrival of the snowbirds. Higher fees, insurance and mortgage rates will persist. Of the units that have closed so far this month, the majority sold for large discounts to the original asking price and four of them sold for a loss. One unit stands out for seller optimism, a bad bet and, ultimately, capitulation. First listed three and a half years ago for $1,299,000, the seller decided to rent for a year after failing to sell, probably hoping for a better market a year later. After a year and $36,000 of rent collected they relisted and found a buyer for $575,000. Anyone hoping to sell needs to accept the reality of this changed market and think hard before making a bet like renting for a year in hopes of a better future market or clinging to yesterday’s price. Unless we have the busiest December of the last twenty years, this year’s total condo sales will continue our five year trend of declining number of units sold.

I hope everyone had a happy, stress-free Thanksgiving. For those who are here this weekend the Cocoa Beach Art Show kicks off tonight with a street party. Live music on the main stage on Minutemen Cswy. begins at 5:30 with FlowMotion followed by the always-outstanding FUNPIPE at 8:30. Hope to see y’all there. Congrats to the handful of people who won tickets to see Benson Boone at the Rocket Garden at the Space Center Saturday night. Enjoy the backflips.

“Sometimes I’m scared of being Ozzie Osbourne but it could have been worse. I could have been Sting.” _Ozzie Osbourne

Houses vs Condos

The moonrises over the ocean this week have been spectacular.

I mentioned in the last post that different market segments can behave very differently at the same time and used the Cocoa Beach single-family market and condo market as examples. Let’s dive into the details and see just how differently they are performing.

We typically have about five to six times the number of condos for sale at any one moment as houses. This morning there are 64 MLS-listed homes for sale in Cocoa Beach and Cape Canaveral and 299 condo units. During the month of October, 15 homes and 34 condo units closed. That means that we have about a 17 week supply of homes versus around 35 weeks for condos.

Median time on market for the sold homes in October was 55 days. For condos it was 151 days. As I mentioned in the Market Snapshot post, time on market is heavily manipulated so the real time to sell is longer than the MLS shows. More than a quarter of the sold properties, both homes and condos, took longer to sell than shown in the MLS but the fact that most condos are taking about three times as long to sell as homes is accurate.

Median selling price for homes was $1,012,000 and $335,000 for condos. Cash buyers dominated the market with two thirds of condo buyers and 60% of single-family home purchasers paying cash. That trend is likely to continue. There do not seem to be any reasons to expect market conditions to change until after New Years when we typically see an uptick in new listings and sales activity in both market segments. Until then we can expect more of the same absent some external macro event. Good luck to all participants. Knowing what’s going on in your market segment will go a long way towards success whether buying or selling.

Reminder to sellers to check your MLS listings for accuracy and completeness. The 15 condo listings on our MLS today that have incorrect or missing condo names may not be included in auto-search emails for buyers who are looking for a unit in a specific condo. If there are prospective buyers with an auto-search set up for Sandcastles, they are not going to get an email about a new listing there if the listing agent’s assistant spelled the name as Sand Castles.

Anyone willing to venture a guess on when/if the development of new houses on the site of Joyce’s Trailer Park in south Cocoa Beach will have its first completed structure? The MLS tells me that ten of them closed, all for cash, at prices between $970,000 and $1,495,000, between 2019 and 2022. Some of these closings happened before the slabs had even been poured and now they have been sitting at various stages of completion for years with sporadic activity and not a single one yet completed. I would love to hear from anyone with any insight into what happened or is happening there.

“A sane person to an insane society must appear insane.” _Kurt Vonnegut 

Beware the Market Snapshot

Typical crowded beach in south Cocoa Beach last week

I receive quite a few marketing direct mail and email blasts from real estate agents, mortgage brokers, title companies and such that include market statistics in their sales pitches. Market statistics are provided by most local Realtor associations to their members for use in marketing. They are most commonly presented (in my experience) as a market wide snapshot demonstrating the health and direction of the local market. All good and I imagine this might be meaningful in some concentrated, homogenous markets but in our 72 mile long county with many distinct and separated cities and communities an overall “market snapshot” is worse than meaningless. It’s misleading. The market viewed as a whole may suggest a different reality than the specific market niche one may be selling or hoping to buy in. Those using these stats rarely mention this. It’s marketing after all. The temperature of the Palm Bay single family home market has very little to do with the health of the beachside condo market. In fact, the one and two story, non-waterfront beachside condo market has little in common with the oceanfront condo market just as the Cocoa Beach single-family home market often moves counter to our condo market. Beware the market snapshot.

Condo inventory in Cocoa Beach and Cape Canaveral has increased slightly with 298 total units for sale as of this morning. The median time on market shows as 112 days but that is misleading because of the way that the MLS calculates combined days on market. The listings that gave up on selling last year and rented for a few months hoping for a market improvement can come back on the market now as a brand new listing with zero combined days on market. Same holds true for a listing with a clever listing agent who cancels and relists to get a new MLS number. There are many of both types of these listings in the current inventory making the time on market appear less than it really is.

A total of 37 units have accepted a contract so far in October. The median time on market indicated by the MLS was 131 days but a look at the relisted units among them like those mentioned above reveal the actual time to sell to be much longer.

Reality is starting to set in for many sellers with overly optimistic expectations. Among the 37 units contracted so far in October a few stand out for their extreme price reductions that produced results.

• Oceanfront unit - original asking price $650,000. Asking when buyer found, $499,000.

• Oceanfront unit - original asking price $439,900. Asking when buyer found, $349,000.

• Oceanfront unit - original asking price $1.1 MM. Closed for $880,000.

• Riverfront unit - original asking price $595,000. Asking when buyer found, $410,000.

• Oceanfront unit - original asking price $700,000. Asking when buyer found, $499,900.

• Oceanfront unit - original asking price $549,000. Asking when buyer found, $399,900.

• Riverfront unit - original asking price $364,900. Asking when buyer found, $284,500.

• Oceanfront unit - original asking price $439,900. Asking when buyer found, $349,000.

• Riverfront unit - original asking price $470,000. Closed for $311,000.

And the most extreme of the reality checks this month; a seller of an oceanfront unit who was originally asking $1.3 MM with no luck even after several large price drops over the course of two years decided last year to let the listing expire and rent the unit. They came back on the market this month at an asking price of $599,000 and found a buyer quickly. A reality check of over $700,000 and a cautionary tale for those who may be thinking of pulling their listing to wait for a more favorable market. Are you feeling lucky?

Some of the 37 units sold for or will close for less than the seller paid for the unit. In addition to these I’m also starting to see new listings of units that were purchased in the last three years or so that are back on the market with a starting price of less than the price previously paid. This may have more to do with substantially increased condo fees over the last three years than to overall market sentiment but it’s certainly worth paying attention to as it’s not something we’re used to. Markets don’t correct overnight but they usually give hints. Whether this is a hint or a temporary aberration remains to be seen. I’ll continue to pay attention.

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” ___Warren Buffet

Distant Storms - Fewer Condos

This post first appeared at  larrystake.substack.com on October 1.

As I write this, hurricanes Humberto and Imelda are moving away to the northeast well offshore following the general track of their older siblings this season. Since early August there have been constant, overlapping long-period swells from passing distant storms gracing our shore. That’s made for an active late summer for Brevard surfers without the attendant stress of a possible landfall but not so great for surf fishing during the fall mullet run. The relief of watching an approaching storm start its northward turn away from us is a shared joy for all, surfer or not.

Our residential real estate market is firmly into the slower fall season. The MLS is reporting a total of 27 closed condo and townhouse units and five single family homes in the month of September. As always, that number is likely to increase slightly as tardy listing agents get around to closing their sold listings. Average time on the market for the sold condos was 119 days and not a single sold unit received their original asking price. One sale of an oceanfront unit, closed for 73% its original asking price a year ago. That was a prolonged and probably stressful reality check for the seller. Just slightly less than half of the sold units closed for cash with no mortgage.

Highest sold price was $1.235 MM for a 4th floor direct ocean corner 3 BR, 3.5 BA in a 17 year old building in south Cocoa Beach while the median sold price was $305,000.

In contradiction to the statewide trend of increasing supply, the condo and townhouse inventory in Cocoa Beach and Cape Canaveral has continued its steady decline from a high of 405 units in late April to just 282 units for sale this morning, the first day of October. Average time on market for those 282 units is 117 days with almost a third of them already over six months without a buyer. Our slow season has traditionally lasted until the end of January when sales usually pick up again so those folks may have to wait even longer to find their buyer unless they are prepared to compete with the handful of sellers who are priced to sell. Until January we can expect more of the same slow activity barring some market-affecting macro event. Buyers, know what you’re looking for and know your target property’s fair value. Expecting a huge discount off asking price just because the market is slow is foolish. Expecting a discount because a seller is overpriced is reasonable but a low offer stands a much better chance of success if it can be justified by relevant comparable sales to support that offer. [Relevant is important as is the plural, “sales”.] Be smart whether you’re buying or selling and pay attention to the market. It is almost always right.

“Demand and supply are the opposite extremes of the beam… the price is the point of equilibrium, where the momentum of the one ceases, and that of the other begins.” – Jean-Baptiste Say

Season Opener

Venus with Jupiter hovering above floating together over the palm trees at sunrise in south Cocoa Beach.

This post was first published on Sept. 1 at larrystake.substack.com

Today, September 1, marks the reopening of snook season on the east coast of Florida. The Southwest Florida season will reopen on October 1. As long as the surf cooperates these tasty fish can be caught from the beach anywhere in Cape Canaveral or Cocoa Beach as they shadow the abundant schools of migrating mullet and pogies (menhaden). One fish per day per person between 28” and 32” can be harvested. Be prepared to catch other fish feeding on the same schools of bait like Spanish mackerel, bluefish, jack crevalle, ladyfish, sharks and the occasional giant tarpon. When conditions are favorable, this is the most exciting time of the year for surf fishing.

Real estate sales during August were slow with 32 condos and 9 single family home sales closed during the month in Cocoa Beach and Cape Canaveral. It was the slowest month of the year so far. Condo inventory continues to shrink with a total of 309 MLS-listed condo and townhome units for sale this morning. Single family home supply remains steady with 71 homes actively for sale. Two thirds of the sold homes sold for over a million dollars with only one sale below a half million. One condo exceeded the million dollar sold price with a median selling price of all sold units of $387,000. Median monthly condo fee of the closed condos was $790.

If historical patterns hold, the four-month period from October through January is likely to bring slower activity compared to earlier this year. The reduced inventory will benefit prospective sellers by limiting competition, but it is offset by that seasonal decline in buyer demand. Sellers who know which listings they are competing with and who adjust their strategy accordingly will be better positioned for success. Good luck to all and if the process becomes tiring, take a morning off to hit the beach and try for a snook.

I hope the early risers among the readers, like myself, have been enjoying the spectacle of a bright Venus in the morning sky as it has been racing towards the far side of the Sun all summer. Its relative position to the much slower Jupiter in the early morning sky has widened drastically over the last month and it experienced its brightest point in this half of its revolution (from our perspective) just last week. We will lose sight of it in the next few months as its position in the sky gets closer to the sun and it rises later in the morning. It will reach superior conjunction on the far side of the sun in January and then, when it reemerges, will become visible in the evening sky as it completes this trip around the sun and is once again approaching Earth. One doesn’t need a telescope to understand that some of the objects in the night sky are very much closer than others.

I spotted another red-headed agama lizard yesterday, this time at my office in downtown Cocoa Beach. Their northward invasion has progressed far faster than I expected.

“The sun, with all those planets revolving around it and dependent on it, can still ripen a bunch of grapes as if it had nothing else in the universe to do.” _Galileo Galilei

 

Back to School

A SpaceX Falcon 9 first stage after being unloaded at Port Canaveral from the drone ship.

This post first appeared at larrystake.substack.com on August 11.

I will keep this update short. On this first day of school we enter our historical slow season which extends until January when our snowbirds begin arriving in numbers. Until then expect continued slow/slower activity in our residential real estate market.

Condo sales in Cocoa Beach and Cape Canaveral in the month of July stuck to their slow pace with 41 closed unit sales compared to 50 in July 2024. Our bright spot, single-family homes, remained strong with eleven closed sales compared to seven last July. Median time on market for condos was 94 days and 55 days for SF homes. About half of all sales in both categories were cash deals.

Condo inventory continues to shrink with a total of 332 condo and townhome units for sale this morning while single family inventory climbed to 70 homes. The number of condo units on the market at any time in our area is typically around five to six times the number of single family homes reflecting the actual makeup of residential properties in our two cities. At the moment the condo segment of our market is under pressure from substantially higher condo fees, higher master insurance premiums and ongoing concrete projects in many complexes. Condos and SF homes alike are feeling the pressure of near-7% mortgage rates.

The median monthly condo fee of the units currently for sale is $718 per month. That number would be much higher if not for the units with lower fees in one and two story buildings not subject to the new regulatory oversight. Compare that $718 median monthly fee to the $425 median of the sold units just four years ago in July 2021 when mortgage rates were hovering at 3% compared to just under 7% today. Someone buying a $500,000 condo today with a 20% down, 30 year mortgage can expect to pay around $3300 a month for mortgage payment and median condo fees (not including property taxes). A buyer who bought a $500,000 unit in July of 2021 would have been looking at around $2100 a month. That big an increase in so short a time adds friction to the process.

Hopeful sellers would be wise to reexamine their asking prices if they aren’t getting any action and adjust now if necessary. There may have been comparable sales since listing that would suggest a lower price. Those sellers that are aware of their competition and who outcompete them are the ones who’ll find success.

Buyers and their agents would be well-advised to stay abreast of recent sales so they can focus on listings with reasonable asking prices. Our inventory is riddled with overpriced listings but it only requires a little homework to be able to recognize those. It is time well spent. Be aware to be successful in this market.

They’re here. We’ve been hearing reports of the red-headed African agama lizards from our neighbors in Satellite Beach and further south but I have not heard of any in Cocoa Beach yet. I have seen one in south Cocoa Beach twice in the last couple of weeks so they (or at least one) have arrived. If anyone else has seen an agama in Cocoa Beach I'd love to know where you saw it. The battle for supremacy of the invasive lizards between these large and fast lizards and the already well-established and aggressive curly tails should be epic. I watched a big curly tail chase a full-grown squirrel across a parking lot so don’t write them off. The one below was my constant back porch companion for a long time a few years ago. 

“We turn our experience and your money into your experience and our money.” the subtext to all financial advisory pitches 

Halftime Already

In the 21 years that I’ve been recording MLS data for Cocoa Beach and Cape Canaveral there has only been one year with a June that had fewer closed sales than 2025. That was 2008 with the Great Recession in full swing. This year with a so-far unnamed economic calamity ongoing we managed to squeak out four more condo sales (41) than we did in June 2008 (37). Our condo inventory that year averaged right around 800 units for sale most of the year while currently we have an eight month supply with an inventory of 335 units for sale. That number has been steadily decreasing since peaking just over 400 units a couple of months ago. The reasons for the contraction in inventory are unclear but seem to largely be a combo of defeated sellers withdrawing their listings and would-be sellers deciding to wait for a better market in which to list.

While the condo market meanders the single family home market remains robust with 13 closed sales during June with a median time on market of 73 days. Slightly less than half (6) of the thirteen home sales were cash deals compared to 70% of the sold condos going for cash. There are currently 61 homes for sale in the two cities with a median asking price of $899,000 and a median time on the market of 105 days. That gives us less than a five month supply at the current sales rate. The disparity between days on market for the sold homes versus the homes for sale suggests that overpricing is still an issue for much of the inventory. Sales may be slow but some sellers are being successful. Prospective sellers should be watching and learning from those who have found buyers.

The City of Cocoa Beach is celebrating its Centennial birthday this July 4th with lots of stuff happening downtown over the weekend. Hot Pink will be playing the street party Saturday night (July 5) with the usual mix of food trucks and other vendors and we are being promised a drone show. Could be a fun evening. In addition to the Centennial goings-on there are lots of new restaurants and watering holes to explore downtown for those who haven’t strolled around recently. It’s worth a visit.

P.S.A. Do not park in the funeral home parking lot at the corner of Brevard Ave. and N. 1st St. unless visiting the funeral home. After years of allowing public parking the lot is now closed and patrolled. There was a massive towing event Friday and Saturday nights this week with multiple tow trucks towing multiple cars. People who were used to parking there while enjoying a meal and/or night out downtown returned to their cars this weekend to find them towed away to an impound lot presumably somewhere on the mainland. This is probably due to the persistent piles of trash in the lot every morning, especially heavy on weekends, left by some of those enjoying the convenient free parking. Now it's over for everyone, responsible citizens and otherwise. FAFO.

“Mmmm. Oh wow.” _Mark Wiens

When the Math Ain't Mathing

The westernmost point of Cocoa Beach looking across the Banana River towards Newfound Harbor, Merritt Island.

I thought I’d take a deep dive into the current affordability of a typical oceanfront condo. Our bread and butter property type in Cocoa Beach and Cape Canaveral is a moderately updated 2/2 unit in an older oceanfront complex with a view of the ocean. Unremarkable units of this type have recently been closing on both sides of $500,000 so I’ll use that selling price in our example. I’ll compare with sales of similar units from four years ago.

In the spring of 2021, 30 year fixed rate condo mortgages were available for around 3% interest with a 20% down payment. Prices were a little lower than the present with typical units like our subject closing in the low to mid $400s. Our example unit that closed for $430,000 in April 2021 would have had a combined monthly mortgage payment, taxes, insurance and condo fee of about $2470 after a down payment of $86,000.

A buyer paying $500,000 for that unit today with a down payment of $100,000 would be looking at a monthly cost before utilities of around $4330. In addition to doubled interest rates, most condo fees have seen a similar increase while both taxes and insurance have enjoyed their own not-insignificant inflation. In just four years the annual core costs for a new buyer of a modest 2/2 oceanfront unit has increased from around $30,000 to over $51,000. That goes a long way towards explaining the lack of enthusiasm for those properties in our current market. Absent any control over these runaway costs, sellers have but one tool with which to attract buyers and that’s price. Most have not not gotten the message and our inventory remains bloated with egregiously overpriced listings languishing on the market for months with no interest.

Even if a beaten-down seller was willing to accept $430,000 today for this unit, the same price he bought it for in 2021, the annual costs for the new owner would still be a staggering $47,000, an increase of over $17,000 a year for the privilege of owning a modest oceanfront condo in a declining market. No one would describe that math as attractive. The reality for many sellers who purchased in the last four to five years is that selling for more than they paid might be unrealistic today. Some of those with mortgages might be unable to close without bringing money to the closing table. Should they wait to sell hoping for more favorable conditions? I’m reminded of what Inspector Callahan, Dirty Harry, said to the punk about whether he had fired five or six shots.

The sellers that are pricing way above the recent similar sales “just in case” are playing an unwinnable game. As I noted in a recent post, new listings that are priced aggressively from the beginning are picking off the active buyers while the “just in case” crew stick to their high prices watching the trickle of buyers part around them to pursue other, more realistically priced properties. It’s a costly delusion. For what it’s worth, in May 2021 there were 74 closed condo sales while in our much more sedate 2025 market with eight times the inventory there were just 42 closed sales in May. Sellers, pay attention, it’s a competitive market and not everyone is going to find a buyer. Join the winners or watch them from the sidelines or, as Blue Oyster Cult put it more simply, on your feet or on your knees.

“Better a cruel truth than a comfortable delusion.” _Edward Abbey