Friday, July 29, 2005

Oceanfront Pick of the Week

I'm getting tired of all the talk of impending doom and the collapse of the real estate market, so, instead of repeating my somewhat tired commentary on the "bubble", I'm going to pick out my favorite property this week and explain my reasons for picking it. First, a little background that supports my pick. Most investors' favorite target in real estate these days is pre-construction. Today I have 2 closings in a new riverfront condo project in Cape Canaveral. One of the closings is in danger of failure because the investor who purchased the unit is having trouble getting financing and may not be able to close by today's deadline. If that happens, he loses his deposit. Developers are far less flexible when it comes to extending closings for strapped buyers. For that reason, and the fact that developers' contracts usually contain no financing contingency, pre-construction carries considerably more risk than normal purchases. If you can't close, for whatever reason, your deposit is at risk.

Considering that risk, I think that carefully selected existing properties may be more suited to the average person wanting to invest in beachside real estate. We are seeing continued strong appreciation in waterfront properties with increasing demand in the lower price ranges. With that in mind, my pick this week is a cute little one bedroom condo in an oceanfront building in my favorite part of the beach, Crescent Beach. This unit has been completely redone with new tile, new kitchen and bathroom and has an excellent ocean view from a large balcony for $285,000. It's small, 750 sq. ft., and has no garage, BUT, it's under $300,000 and it's on the beach. This is not my listing, so, this is not a self-serving selection, just an honest opinion. Others may disagree. Here is the view from the balcony.

There are others that I like but if I have to pick one, this is it this week.

Interest rates continued their upward crawl this week according to Freddie Mac. If you're investing in this market, I can't stress enough the importance of knowledge and due diligence. If you don't know the market, find an informed agent who knows what's going on and let them guide you to the perfect property for you. There are dangerous investments right now and there are excellent ones. The difference is often not obvious. As always, use sunscreen, drink plenty of water if you're spending any time outdoors and be loyal to your hard-working agent.