December Triple Witching Deals and Spills

As of this triple-witching Friday, Dec. 21, 2007 we've had 20 closed sales recorded in the MLS in Cocoa Beach and Cape Canaveral since the first. Here are a few that I thought interesting.

A classic 3/2, 1950s Florida concrete block home on a wide canal, totally remodeled for $318,000.

A crummy rundown home across the street from the beach, $215,000.

A 2/2 top floor Cape Winds for $260,000. These units rent for $800 to $1100 per week. The view below.



A remodeled, 1244 sq.ft. 3rd floor River Lakes (one of my favorite river complexes) for $250,000. Boat slips, ramp, boat storage and the coolest riverfront pool in town make this complex special. Here's the view across the islands.



A 1316 sq.ft. Canaveral Sands side ocean view for $175,000.

A furnished 3rd floor, 1286 sq.ft. Sandcastles for $285,000. Rents for $800 to $1200 per week.

There were other good ones but these stood out. I'm happy to report that my little office represented the buyers in 4 of these outstanding deals. If you're looking to buy now, do your homework and make sure you understand this market. Not every deal this month has been a good one for the buyer. If you hope to buy low, you better be able to justify your offer. The better your research, the better chance you'll have of convincing the seller of the prudence of accepting your offer. I write a one or two page letter with justifying reasons for my price for every offer I make. An unjustified low offer will get a negative reaction every time. A well written cover letter with comparables, market trends, time costs and other inductive arguments will give a low offer a much better chance of at least being considered and hopefully accepted or countered.

This will likely be my last post of 2007. I'm off for a well-deserved rest with family elsewhere. I hope you all have a very happy and safe holiday season. I'll do my traditional year in review post in early January. I expect some of the stats to be shocking. Until then, Sanon.

Ahhhh-Choooo, sniffle sniffle

If you've not been in Cocoa Beach or the other beaches of central east coast Florida in the last month you've missed our most unwelcome visitors of the year, billions, if not trillions, of the dinoflagellates, Karenia brevis, also known as red tide. The photo above is of one of the tiny boogers. In the massive blooms like the one we are currently experiencing, the irritants released into the air and atomized by the surf induce coughing and sneezing fits. Some outdoor beachside establishments like the Beach Shack have actually closed on particularly bad days. Luckily, I can only remember 3 outbreaks like this in the last 20 years. Some of the Gulf coast communities of Florida have to deal with this on a much more regular basis.

On a brighter note, our inventory has dropped to it's lowest level of 2007. Single family home supply is almost the same as at our peak in March this year but condo supply has been reduced by over 150 units since that time. November sales were below last year's with only 16 closed condos and 5 single family homes. I am continuing to put deals together at a steady pace as sellers are becoming more willing to accept the reality of the market.

MLS inventory Cocoa Beach/Cape Canaveral Dec. 13, 2007

Condominiums______865
Single family homes__156

I enjoyed seeing many of you at our office Christmas party last week. A good time appeared to be had by all. I was a little tardy making it to the grilled shrimp station and missed out completely. I hear they were outstanding. Thanks to all the artists who showcased their art.

Cheerleaders and Bad Haircuts

The National Association of Realtors has been at it again, spinning the latest home sales and inventory numbers. They've been joined by thousands of eager agents with new real estate blogs hoping to snare a buyer off the internet. By and large the blogs contain the same self-serving, blindly optimistic message that NAR has preached through the entire downturn. Here's a subjective look at NAR's "Now is a great time to buy" campaign from one year ago. Blogs are now being touted as the hot new marketing tool by the gurus of realtor self-promotion. I think most agents would have more credibility if they just dressed in pink and waved pom-poms like the ladies above while wearing "Time2Buy" buttons. At least these two were doing it for a good cause, breast cancer awareness.

I've taken a little heat from my peers for my cautious commentary and occasional warnings about the direction of the market even as those predictions have turned into reality. Some of them apparently perceive this blog as being contributory to our market downturn. I'll borrow a quote from this month's Wired magazine editorial in response. "Dude, when you see the truth as a takedown, you know you've crossed that line into the kook zone."

As always, I will continue to report on our market without slanting the truth in hopes of generating a commission check. Shame on any realtor who does otherwise.

Here are a few haircuts of note from November 2007.

First trim of the month was an 1862 sq.ft. Shorewood unit that was first listed in January of 2006 for $489,900. After 4 withdrawals and relistings that included 9 price reductions, it closed in November for $285,000. Now that's a haircut.



Our second painful coiffure in November was a 2nd floor corner direct ocean unit at The Sands in Cocoa Beach. It was first listed in April of 2006 for $535,000. At various times the seller was offering 1 year's HOA fees, home warranty, closing costs, rate buydowns and even plasma TVs in an attempt to entice a buyer. Perhaps an earlier price reduction would have sold the unit. Closed yesterday for $300,000. Ouch!



There were also a few closings of foreclosed and otherwise distressed properties last month. How about a 2 bedroom townhome in south Cocoa Beach with garage, 1 block from the ocean? Sold for $125,000. A 2/2 Banana Bay foreclosure? Sold for $157,900. Banana Bay townhomes sold for as much as $250,000 just 2 years ago. We don't have a ton of properties on the market with such radical reductions but they are out there. Buyers, please do your research before making an offer. Sellers, four important words, "tick tock, tick tock". Know your cost of waiting before drawing a mental line in the sand.

"You have to learn the rules of the game. And then you have to play better than anyone else."

Albert Einstein

Dubious Distinction of the Day

We're Number One

According to the National Association of Realtors, Brevard County had the largest percentage drop in housing prices in the last quarter of any major market in the United States. At the same time, the rate of sales for condos has been in an uptrend since July in Cocoa Beach and Cape Canaveral. For the period of July through October, the MLS shows 11 more sales in 2007 than in 2006; 138 this year compared to 127 last year. The two stats are obviously directly related. This time last year there was much more denial among sellers about their property values, prices were too high for the most part and the buyers weren't playing. As the reality check has progressed and prices have come down, more buyers have eased back into the market. I expect this trend to continue, but, as always, I could be wrong. I am reminded of a quote by John Kenneth Galbraith, "The only function of economic forecasting is to make astrology respectable."

The asking prices are still all over the map. This morning I can find a direct ocean, 2/2 with 1153 sq.ft. in a 34 year-old building for $450,000 and a 3/2.5 with 2100 sq.ft. in an 11 year-old building for only $9000 more. Care to guess which one will sell first?

Smoking deal of the week: one year old, 3400 sq.ft. direct ocean penthouse with rooftop deck for $725,000. This one is bank-owned. Somebody at the bank obviously gets it and wants this one off the books.

MLS inventory Nov. 24, 2007 Cocoa Beach & Cape Canaveral

Condominiums_______864
over $500,000_______117

Single family homes___160
over $500,000________70

If you're in the area this weekend, try to make it to the art festival in downtown Cocoa Beach, Saturday and Sunday. Here's this year's poster and t-shirt design by Bruce Reynolds. I'm off to see the show.

Foreclosures exceed sales in October

Florida Today reports that foreclosures in Brevard County hit 590 in October, a month in which the MLS reported 442 residential sales. This explains the willingness we are seeing from some lenders in accepting short sales on troubled properties.

"Victory goes to the player who makes the next-to-last mistake."
___ Chessmaster Savielly Grigorievitch Tartakower

Calling the Bottom

One of my dad's cows and a big fan of the blog listening to my observations on the real estate market and contemplating the timing of her next purchase now that she can no longer get a stated income mortgage.

Question: If the bottom happens and no one is around to notice, did a bottom really happen? Calling the bottom in this real estate cycle has been an embarrassing game for those who have ventured a call so far. The National Association of Realtors perhaps has the most egg on it's face with it's call in November 2006 that the housing market was "on the road to recovery", but, they have plenty of red-faced company. For buyers and sellers of real estate, it would be prudent to take any call of bottom, regardless of the source, with a grain of salt.

As I've mentioned in the past, no one is going to ring a bell when the bottom is reached. To further complicate timing is the fact that it will not occur at the same time for all properties. We have already seen sales that may represent the bottom for specific unit types in some condos. For instance, it appears that my call a year ago of the bottom in 3 bedroom non-riverfront Harbor Isles units at $220,000 was accurate. The lowest price for currently-listed 3 bedroom units there is $265,000 and the lowest selling price since the $220,000 sale was $265,000. Buyers who passed on that unit expecting further price deterioration were wrong. What does this mean for buyers who are afraid of catching a falling knife? Research, research, research. Without market knowledge, one can't hope to recognize a price that is ahead of the declining curve.

As the broad market continues to decline, I am seeing deals like that Harbor Isles sale a year ago, sales at prices that likely will represent the bottom in those particular unit types and buildings. Remember that every seller's situation is different. Some have no pressure to sell and are content to wait out the downturn while others are motivated to sell at whatever price the market will yield. These motivated sellers will reach their capitulation point at different times. If you're buying, be ready to move and have the market knowledge to recognize a deal when it it presents itself, or have access to someone like myself who can identify the candidates as they appear. As I said a year ago, "If you'd like a nice existing condo, be looking now and be ready to pounce when that isolated, motivated seller drops his price to the can't-refuse level."

Exhibit A for this week; 2 year old, 2293 sq.ft., 3 bedroom 3 bath, direct river condo on the mile-wide part of the Banana River in south Cocoa Beach across the street from the ocean. Sold new in December 2005 for $699,000. Offered for $445,000 as a short sale and under contract as of yesterday.

I'll leave you with a recent windswept day south of the condos in Cocoa Beach.



“I don’t want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year.'’ Don Tomnitz, CEO of D.R. Horton Homebuilders, March 2007

Year over year comparisons

Looking at the sales data in graphic form in the chart above made me realize that, as slow as sales are, they are not appreciably slower than the second half of 2006. In fact, in July, August and September, 2007 sales have exceeded those of 2006. October, with 19 closed sales as of the 26th, also looks on track to at least match the 2006 numbers. Is this a meaningful revelation? Depends on one's perspective. For realtors, lenders, inspectors and the other professions that depend on real estate sales for their livelihood, it means that there is enough activity at the current steady level of sales to survive in a slowed market, at least for some. For sellers of condos, it means that the buyers have not fled the market. They are there and buying at a steady pace. Here's a different look at the same data that graphically demonstrates the seasonal nature of our condo market. It makes it obvious that the fall is the best time to be a buyer and late spring to early summer is the best time to be a seller.



I would like to chart the trend in prices but the MLS data is too confusing to get an accurate picture of that metric. My on-the-ground perception is that the trend in prices is still downward although not spread equally. Some smaller complexes with few or no sales have escaped the reality of lower prices, so far. My office closed 2 sales in The Constellation this week at prices not seen in that building since 2003. With Water's Edge and Stonewood units closing in the last two weeks for $274 and $336 per square foot respectively, the Constellation sale at $170 per sq.ft. tops the list for screaming deal of the month.



Earlier this month, after a few days of high east winds, this boat washed up on the beach directly behind the Constellation. Judging from the hand-painted name on the hull, it probably came up the Gulf Stream from the islands. I heard yesterday that it was spotted in the surf 25 blocks north. I hope everyone enjoyed yesterday's great waves as much as I did. The water is still warm and the beach is deserted. Fall is a magic season in Cocoa Beach.

October Price Reductions

Here are a few of the more remarkable price reductions since October 1st in Cocoa Beach and Cape Canaveral.

A 3/2 ground floor Stonewood unit: Listed Jan. 2006 for $499,000 and reduced this month to $349,900.
A 1/1 furnished Dolphin Beach unit: Listed July 2006 for $207,000 and dropped this month to $139,900.
A 2/2 furnished Canaveral Towers unit: Listed August 2006 for $495,000 and reduced this month to $399,000.
A 2/1 furnished Diplomat unit: Listed the first time August 2005 for $285,000 and now at $168,000.
A brand new 3/2.5 Ocean Club unit: Listed for $734,000 in Feb. 2006 and reduced this month to $499,000.

There have been a total of 80 price reductions in condos since October 1st. Judging from the size of the reductions, the reality of the changed market is beginning to sink in for at least some sellers. Probably every one of the examples above could have sold for more than the current price had they gotten aggressive earlier in their attempt to sell. During the entire time that these units have been on the market, we have seen condos closing at a rate of about one per day. The market is not dead but it is selective. Not to sound like a broken record, but, if you're selling, price it right and you stand a good chance of selling. I don't know who said this, but, it applies. "Many an opportunity is lost because a man is out looking for four-leaf clovers."

According to Wikipedia, "The function of a market requires, at a minimum, that both parties expect to become better off as a result of the transaction." Good luck out there, it's still a challenging market but deals are being made every day.

Wishful Thinking

Good morning, Cocoa Beach.

Activity remains slow although there have been a few deals of note. The first two of the single-family homes at the Enclave closed this month, both at $945,000, a record for non-waterfront homes in Cocoa Beach. There are 10 others near completion out of a planned 24.

I'm happy to report that I was able to hammer out deals for both my buyers mentioned in the If condos were watermelons post from a couple of weeks ago. One of the reluctant sellers saw the wisdom in selling for less than her expectations while another of the reluctant sellers was not so wise. He foolishly clung to his $325,000 asking price and we bought his neighbor's nicer unit for $285,000. Now, even if he finds a buyer willing to pay $325,000, his unit will have trouble appraising because the most recent identical comp is now $285,000. The first seller will be cashing her check while the other just took a $40,000 hit and is still looking for a buyer. He actually uttered the infamous words, "I'll just wait it out." I suspect he's imagining a shorter wait than I anticipate.

From Wikipedia;" Wishful thinking is the formation of beliefs and making decisions according to what might be pleasing to imagine instead of by appealing to evidence or rationality . Studies have consistently shown that holding all else equal, subjects will predict positive outcomes to be more likely than negative outcomes." I see lots of wishful thinking on both sides of the table in real estate deals.

Our inventory is still slowly decreasing. Here are the numbers as of this morning. There have been 8 recorded sales of residential property so far this month in Cocoa Beach and Cape Canaveral.

MLS For Sale Inventory - October 14, 2007

• Condominiums_______865 all prices
• ___________________126 over $500,000
• Single family homes___167 all prices
• ____________________71 over $500,000

"How hard it is, sometimes, to trust the evidence of one's senses! How reluctantly the mind consents to reality." Norman Douglas

Another one bites the dust

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

September Stats for Cocoa Beach

Delta rocket launch on Sept. 27 as seen from the boardwalk.

Property sales slowed considerably as we moved past Labor Day here in Cocoa Beach and Cape Canaveral. Condo sales slowed to less than half the pace of recent months and the over-$500,000 condo market ground to a halt with not a single unit closing in the month. The most notable sale of the month was this beautiful riverfront home in Cocoa Beach that sold for $1.92 million.

A new price reduction worth noting is this 7th floor 3/2 direct ocean Crescent Beach Club unit that was just dropped to $409,000.

Closed 2007 MLS sales in Cocoa Beach and Cape Canaveral

Condos

• Sept.______16___0 over $500,000
• August____34___3 over $500,000
• July______39___3 over $500,000
• June______40___6 over $500,000
• May______35___2 over $500,000
• April______43 __3 over $500,000
• March_____36__2 over $500,000
• February___42__5 over $500,000
• January____28__3 over $500,000

Single Family Homes

• Sept._____4
• August___9
• July_____8
• June_____5
• May_____5
• April_____4
• March____8
• February__6
• January___3

MLS For Sale Inventory - September 30, 2007

• Condominiums_______894 all prices
• ___________________132 over $500,000
• Single family homes___167 all prices
• ____________________72 over $500,000

If condos were watermelons

How many legs does a dog have if you call the tail a leg? Four. Calling a tail a leg doesn’t make it a leg. Abraham Lincoln

I am perplexed at the level of denial that remains in our condo market. You would think that after watching prices decline for almost 2 years that sellers would have gotten the message. I am negotiating on behalf of buyers on two different condos this week. In both cases, the sellers are clinging to the belief that their condo is somehow worth more than other recent sales in their building even when the other units were more desirable. Folks, it doesn’t matter that your neighbor sold low because he was behind on his mortgage. Nor does it matter that you need to clear X dollars or that Mr. Smith got $XXX for his unit last year or that you spent a small fortune on new granite and stainless. Mortgages are more difficult to get than just a month ago and every time a lower sale closes, your unit is worth less. It’s unfortunate, but it is what it is. If you want to sell, don’t let a qualified buyer walk away because you have an irrational need to get more than the last comparable sale.

I grew up in watermelon country and every summer, the watermelon growers would set up roadside stands selling their melons. If farmer Ed priced his at $5 each and Farmer Cletus next door priced his at $4 , Ed had to match his price or watch his melons sit unsold while losing value until they were spoiled. As long as both farmers’ melons tasted equally fine, the lower price dictated the market. In particularly productive years, prices got really low when everyone had a roadside stand with lots of inventory. I can remember 10 for $1.

The current condo market is like one of those productive years. The market is saturated with inventory and prices have retreated. Cling to the belief that you’ve got a $5 watermelon in a $3 year and you’ll continue to hold it while your neighbors who’ve responded to market conditions sell their’s. There is also the risk that, as more melons ripen, the price will drop to $2. At that point, the $3 you turned down looks good. As silly as it sounds, condos are like watermelons. Deny it if you dare.

September Deals of Note

The deals continue to happen. Closed so far in the month of September;

a 1525 sq.ft. condo in an oceanfront building with this side ocean view for $212,000 or $139/sq.ft., exactly half the original asking price in February 2006 of $425,000.


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Also closed was a brand new 2032 sq.ft. condo in the building below with a view of the river across the street in Cape Canaveral for $238,000 or $117/sq.ft.


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Another 2/2 oceanfront condo with 1316 sq.ft. and the view below sold for $262,000. Originally listed for $329,000 in April this year.


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And my nomination for smoking deal of the month; a 2100+ sq.ft., 7th floor Constellation 3/2 unit that has been beautifully remodeled to like-new luxury status. Sold for $495,000. It was originally listed for $759,900 in February 2006. This unit has expansive ocean views and all 3 bedrooms have sliders that open onto balconies with killer views. The master opens onto the ocean balcony and the other bedrooms open onto a balcony with views across the Banana River to Merritt Island. Below is a shot of the kitchen which has the most beautiful granite I've ever seen.


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There are other listings that are pending that I suspect will break new ground to the downside. I will report on any of note as they close. If you're looking to buy, do your research, be careful and don't be afraid to offer low. If you're selling, don't deny the trend and don't make a mental line in the sand. It has proven to be costly. Next post will be on short sales, the new twist on foreclosures.

Bite in the Bight - 5 years later

The Canaveral Bight, the crescent of beach between the north jetty at Port Canaveral and the tip of the Cape, lined with rocket launch towers, has been off limits to fishermen since the events of September 11, 2001. The powers that be recently re-opened this area to recreational fishermen. I took the opportunity to fish with my friends Chip and Carol from Orlando on September 11, 2007. Along with hundreds of lesser fish and a few drag-screaming blacktip sharks, I managed this small tarpon on 15 lb. spinning gear. Back to the market next post.



This fish was released healthy to fight another day.

Year to Date Numbers

Here are the sales through the end of August and the current MLS inventory of properties offered for sale. Our condo inventory continues to shrink while single family home supply is almost unchanged. Single-family home sales have been robust with July and August being the strongest 2 month period so far in 2007. In the over-$500,000 condo market, 27 units have closed so far this year while there are 139 listed for sale, a 39 month supply at this pace. In the under-$500,000 condo market a total of 265 units have closed through August 31 with a current supply of 743, or a 23 month supply.

Closed 2007 MLS sales in Cocoa Beach and Cape Canaveral

Condos

• August____34___3 over $500,000
  
• July______39___3 over $500,000
  
• June______40___6 over $500,000
• May______35___2 over $500,000
• April______43 __3 over $500,000
• March_____36__2 over $500,000
• February___42__5 over $500,000
• January____28__3 over $500,000

Single Family Homes

• August___9
  
• July_____8
  
• June_____5
• May_____5
• April_____4
• March____8
• February__6
• January___3

MLS For Sale Inventory - September 6, 2007

• Condominiums______882 all prices
• __________________139 over $500,000
• Single family homes__172 all prices
• __________________72 over $500,000

Last week while mortgage lenders were dropping like flies and the main stream media was reporting that jumbo loans would now require a minimum 20% down payment, my wife closed an over-$500,000 home sale with a 100% mortgage. As always, take everything you hear with a grain of salt and get a second opinion even if you're certain of the first. George Bernard Shaw put it more eloquently than I, "Beware of false knowledge; it is more dangerous than ignorance."

A Photo Cruise along South Cocoa Beach

I took a cruise down the Banana River shoreline of south Cocoa Beach yesterday and took photos of all the riverfront condos so that you readers can better visualize the buildings that I mention so often in this blog. Starting at the extreme southern end next to Patrick Air Force Base we have the brand new, super-luxury Villa Verde. Several units available from about $1,000,000.


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Heading north the next building is the new Orlando Beach building, 4 units available from $499,000.


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Past a few classic old Florida homes on the river like these two with great back yards.


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Then we get to River Bend.


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For perspective, just past River Bend, you can see Crescent Beach Club (on left) and the Constellation which are both directly on the ocean. The upper floors here have not only an ocean view but a western view across the wide part of the Banana River all the way to south Merritt Island. This is the most narrow point of the barrier island with just a sliver of land separating the ocean and the river. Two very nice units in Constellation went under contract last week at bargain prices.


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Next we get to River Villa (on right) and Dockside, both with boat slips for all units. You can see Casa Playa on the ocean between these two buildings. There is a penthouse for sale at Casa Playa which could have the best views and layout of any unit in Cocoa Beach.


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Continuing north past the old Dolphin Inn we get to River Place. That is Waters Edge on the ocean looming in the background. No boat slips here.


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Immediately next door is Water's Edge West which shares a river dock with Water's Edge on the ocean. You can catch a glimpse of the massive new, three-story duplex behind the building.


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Heading north we see The Carlyle (on left) and Riomar on the ocean. There have been two sales this year in the Carlyle for at least $1 million each. In the Riomar, each unit is an entire floor so you have windows on all four sides. There is a 3rd floor unit available for $899,000.


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Next on the river we come to Crescent Palms (on the right) and Garden by the Sea, soon to be completed. 2650 sq.ft., 3/3 units available in Garden from $655,000. Pretty much the entire Crescent Palms building is available, one 2293 sq.ft., 3/3 unit for $455,000, $244,000 less than the owner paid 2 years ago.


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Last condo on the river in south Cocoa Beach before the split in A1A is Magnolia Bay. No fire sales available yet.


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From this point north there are only single family homes on the river until River Lakes and Harbor Isles which are about 1/2 mile away. Hope you enjoyed the tour. It was pleasant from the boat.

Florida Insurance Reductions

Cocoa Beach Sunrise, August 25, 2007

Even with the mortgage market in turmoil, sales are closing. So far this August, we've had seven closed sales of MLS-listed, single-family homes in Cocoa Beach and Cape Canaveral. Three of those were in the tiny Harbor Heights neighborhood in Cape Canaveral. The other four were in Cocoa Beach, two on canals and only one over $500,000.

We have had 22 MLS-listed condos close in the same area since August 1, on pace with the first half of the year, roughly one a day. (Actually, since today's Julian date is 240 and total condo sales so far for the year are 288, the exact number is 1.2 per day.) The only 2 sales over $500,000 were new units at Meridian on the ocean, one for a whopping $1,049,900. I understand that closings of pre-construction contracts there are in full swing although only a fraction were listed in the MLS and will not show up in the MLS data. So far, none have shown up on the Brevard Property Appraiser's site. Overall condo inventory continues to slowly shrink, down over 10% from the high point reached in May 2006.

MLS Inventory - August 28, 2007

• Condominiums______900 all prices
• __________________147 over $500,000
• Single family homes__176 all prices
• ____________________73 over $500,000

Owners of detached single-family homes in Florida are finally getting a break on their insurance rates. The Legislature has designated $250 million for free wind inspections that will qualify homeowners for insurance breaks with certain hardening features including hurricane doors, windows, roofs, shutters, etc. Some homeowners will qualify for assistance in getting strengthening done to their homes. I have personally heard of one homeowner getting a $4600 rebate. The program is called My Safe Florida Home. Check it out if you own a detached single-family home anywhere in Florida. Unfortunately, the program is not available for condos or businesses.

The Labor Day holiday weekend is coming up and my favorite season in Cocoa Beach begins again. Snook season opens September 1 and the mullet run starts soon with all kinds of action in the surf for anglers fishing with live mullet. This is a great time to visit as the summer crowds are gone, water is warm and the ocean is alive with fish and waves. Here's a sweet little rental condo in south Cocoa Beach if you'd like to visit.

August 14 update

Just a brief update this morning on two oceanfront condos previously featured in the False Realities post. Seller number 2 in that post with a 2278 sq. ft. corner ocean unit in Crescent Beach Club who had progressively dropped his price from $649,000 to $419,000 finally got an accepted contract as of yesterday. Seller number one who had a direct ocean corner unit in Wavecrest with 2000 sq.ft. closed his unit yesterday. Selling price: $385,000, quite a haircut from the $630,000 original asking price in April of 2006. A 15th floor direct ocean, 2/2, sand dollar floor plan with 1470 sq.ft. at Stonewood closed yesterday for $475,000. Original asking price was $575,000 last November.

An interesting price reduction today is an 11th floor, southwest corner in 2100 Towers that has been reduced to $287,000 from $316,000 in April. Other than a ground floor unit with no view that sold last month for $265,000, no 2100 Towers unit has sold for less than this since 2003.

Another smoking deal hitting today is a bank-owned 4/3 canal home in Cocoa Beach for $339,000.

I'll leave you with a shot of a few of the Australian pines or casuarina trees slated to be cut down on the Thousand Islands in Cocoa Beach. Whatever the science behind the removal, I'll miss these trees.

More Deals and Steals

Two weeks into August and sales are plodding along even as the credit markets try to adjust to the changing conditions. The fallout directly affected me this past week when one of my wife's pending deals had to quickly shift gears when the lender that supplied the pre-approval abruptly stopped lending. Things appear to be back on track with another lender but, with things changing daily, it's not done until it's done. Like this little gator I shot yesterday at the Cocoa Beach Country Club, lenders are wary of biting off more than they can handle.



Eleven closed sales have recorded through the MLS since August 1 in Cocoa Beach and Cape Canaveral and the prices are all over the map. Click on the highlighted listings to see photos. A gorgeous 2120 sq.ft. pool home on the golf course in Cocoa Beach closed for $375,000 after being first listed for $525,000 last September. On the same day, a new 2180 sq.ft. unit in the Meridian condo on the beach closed for $659,900. A one bedroom unit in Villages of Seaport that sold in July 2004 for $131,000 closed for $110,000. At Sandcastles condo on the ocean in Cocoa Beach, prices are showing remarkable resilience. A 5th floor, 1286 sq.ft., 2/2 unit sold for $400,000. Sandcastles, like the few other condos that allow weekly rentals, can command a higher price because income can be substantially higher with short-term rentals. A non-waterfront 2/2 unit at Cape Shores on the river that was aggressively priced at $139,000 got a contract in 3 days and closed for $137,000 4 weeks later.

A 2158 sq.ft. 4/2 home on the open river with unobstructed views of the islands and with a dock closed for $550,000 after only 14 days on the market. It was listed for $575,000. My office sold a 2/2, 2nd floor Four Seasons overlooking the pool for $159,000. Rounding out the good deals was a Jamaica Cove 2/2 that cracked the $200,000 barrier for waterfront condos and closed for $195,000 after being first listed for $259,900 last October.

Cocoa Beach and Cape Canaveral MLS Inventory - August 12, 2007

• Condominiums_______935 all prices
• ___________________150 over $500,000
• Single family homes__171 all prices
• ____________________72 over $500,000

Another of the locals at the Cocoa Beach Country Club, a Florida soft shell turtle crossing the fairway looking for a better lake. These guys lay their eggs in the sand traps in the summer.

Crisis and Opportunity

August 3rd will likely go down as the definitive "line in the sand" day for mortgage lending in the US for this cycle. The trouble that's been brewing for a few years peaked yesterday as over a dozen major lenders either stopped or temporarily suspended some or all funding. The over-100 subprime lenders that have imploded this year were joined early this week by the 800 pound gorilla, American Home Mortgage, who ceased all operations and left over $750 million of in-progress loans without funding and over 7000 employees in limbo. Some of the other very big names appear to be in serious trouble as well.

The immediate impact for buyers of real estate will be much stricter lending standards and far fewer mortgage products. Those with good credit and verifiable income are in good shape although there will likely be far more hoops to jump through to get the loan. Especially impacted are non-conforming or "jumbo" loans (over $417,000) . Marginal borrowers have probably missed their window of opportunity. The good news for those with good credit and/or cash will be greater bargaining power as the pool of buyers is now much smaller, especially for properties requiring a mortgage over the $417,000 "jumbo" threshold.

Sellers, if you're paying attention, it's time to make your plan if you hope to sell. Either price your property right or hit the bench until this game is over. Throwing a hopeful price out there waiting for that mythical buyer who will pay your too-high price is an exercise in futility. It's become obvious from these latest developments in the credit industry that the bottoming that NAR called in 2006 is not here yet. Waiting for next spring to sell will almost certainly be a very expensive decision. Aldous Huxley was talking to you when he said, "Facts do not cease to exist because they are ignored."

I shot this last week from the Banana River looking east into Edwards Bay in Snug Harbor down in south Cocoa Beach. This is one of the great things about Cocoa Beach. Beautiful places like this on the river are usually just a short stroll from the beach. In some cases, as in extreme south Cocoa Beach, the Banana River is across the road from the ocean.



If you'd like an informed and realistic agent to help you sniff out a bargain in this dynamic market, email me at larry@southcocoabeach.com I enjoy going to battle for my buyers. Remember, crisis and opportunity arrive hand in hand. And, we can always work in a little fishing during our search.

Happiness Underfoot

The poet, James Oppenheim said, "The foolish man seeks happiness in the distance, the wise grows it under his feet." I suspect he never surfed but his words certainly apply. By his definition, here's a wise man in south Cocoa Beach.

Sales in Cocoa Beach and Cape Canaveral through the 22nd of July have been steady and we look to hold right on the sales trend of the first half of this year. The numbers of closed over $500,000 condos will be showing an uptick this month and probably next as the few MLS-listed pre-construction contracts at Meridian in north Cocoa Beach begin recording. It's an anomaly that these high-priced units are closing while other similarly-priced condo projects are showing zero sales activity presumably because of defaults and, maybe, developer-granted extensions. The 62 unit Magnolia Bay project has not had a deed recorded since April. I can find only 8 total recorded sales for this complex at the Brevard Property Appraiser's site since the first one closed in January. Meanwhile a new luxury project is breaking ground just south of Magnolia Bay on the ocean in south Cocoa Beach. Go figure.

The direct ocean 2nd floor corner at Wavecrest in south Cocoa Beach that I featured in "False Realities" in June is under contract after dropping the asking price to $399,000. I'm not surprised. The other unit in that piece, the 2nd floor corner unit at Crescent Beach Club, is still for sale at $419,000 having stairstepped down from $649,000 over a 3 year period while just next door a considerably smaller unit on the same floor got a contract in 2 weeks after offering for $425,000. Sellers take note.

I have updated the closed numbers for the year. The early reports are always a little shy of actual as lazy listing agents often take weeks and months to record a sale as closed. These numbers are accurate as of this morning, July 22, 2007.

Of the closed condo sales so far this month in Cocoa Beach and Cape Canaveral, the average days on market is 256 and the selling price average is 75% of original asking price. These numbers are scrubbed to correct for agent manipulations and with the 3 pre-construction sales thrown out.

Closed 2007 MLS sales in Cocoa Beach and Cape Canaveral

Condos

• June______40___6 over $500,000
• May______35___2 over $500,000
• April______43 __4 over $500,000
• March_____36__2 over $500,000
• February___42__5 over $500,000
• January____28__4 over $500,000

Single Family Homes

• June_____5
• May_____5
• April_____4
• March____8
• February__6
• January___3

Inventory - July 22, 2007

• Condominiums______955 all prices
• __________________154 over $500,000
• Single family homes__171 all prices
• __________________72 over $500,000

Until next time, please take note when you see the fast-moving thunderstorms that are so common this time of year. Get inside before the storm gets to you. Lightning will kill you and can strike long before the storm actually arrives. Be safe, please.

Stats, Deals and an Alpha Male

In Cocoa Beach and Cape Canaveral, sales of condos and homes held at a slow but steady pace halfway through July and prices continued their downward slide. Our inventory of MLS-listed properties is slightly smaller again this month but we are still at historically high levels. Here are a few representative sales since July 1st.

In Cocoa Beach a lakefront Harbor Isles 2 bedroom, 2 bath, 1248 sq.ft. unit sold for $175,000. This complex is 2 blocks from the ocean and is on the Banana River. A 3 bedroom 2 bath, 1462 sq.ft. home with 2-car garage and giant old oak trees on Cedar Ave., 4 blocks from the ocean sold for $250,000. In Cape Canaveral a direct ocean 3/2, 1616 sq.ft. unit at La Mer closed for $275,000. A 1 bedroom studio apartment at Surf n Sun in Cocoa Beach, one block from the ocean, closed last week for $77,000. These units sold for as much as $119,000 in 2005.

Our inventory numbers for Friday the 13th of July, 2007 are:

MLS-listed Properties in Cocoa Beach and Cape Canaveral

Condominiums, all prices______927
Single family homes, all prices__176

Condos over $500,000________151
Homes over $500,000_________75

I'll leave you with a picture of an alpha male brown anole sunning outside my window on July 4th. Notice the giant ridge (called a roach) on his back. These are only found on the males and are rarely this big. This guy is definitely king of his world.

False Realities

As promised, here are two case studies of the cost of clinging to a false reality. Keep in mind that the listing agents in both cases may have been, at the very least, supportive of their sellers' costly denial. Seller number one listed his oceanfront condo for sale in April of 2006 for $630,000. After 60 days, he dropped the price by $50,000. A month and a half later he shaved another $40,000 off. Two months later, well into the slow fall season, the price was dropped another $50,000. Two months later, another $40,000 slice and the price stood at $449,000 where it stuck for six months until this week when it was dropped another $50,000 to $399,000.

Seller number two listed his oceanfront condo for sale in August of 2004 for $599,000 and raised the price in October to $649,000 . He changed listing agents in April of 2005 and dropped the price to $629,000. He dropped the price again four months later to $599,000 where it stuck until December when the unit was pulled off the market. It sat empty until August of 2006 when it was again offered for sale, this time for $569,000. One month later the price was dropped to $549,900 where it remained until February of this year when it was dropped yet again to $499,000. April saw a drop to $479,000 and in May it was lowered to $459,000. June brought another $40,000 haircut and today the price is at $419,000. To add insult to injury, this seller has been paying over $10,000 annually for condo fees and taxes while chasing the market down. Mortgage payment, if any, is in addition to that.

Both of these sellers obviously thought that their original prices were reasonable. If either didn't have to sell, as I hear all the time from obstinate sellers, they wouldn't be offering their condos today for 35% below their original asking prices. Seller number one was a little late in getting his unit to market but could probably have gotten more than today's asking price had he seen the light earlier. Seller number two had plenty of time to price correctly and walk away with a healthy profit early in his listing history but he clung to his wrong opinion of the worth of his unit and will now be lucky to net the $380,000 that he originally paid for his unit in 2003.

Moral of this story: If you're selling, make an effort to separate your personal opinion of your property's worth from the market's opinion. A little pain now may be preferable to a lot of pain later. If a prospective listing agent is willing to take your listing at more than their recommended asking price, you may be shooting yourself in the foot to hire them. As my wife is fond of telling me, it is what it is, deal with it.

One last note; If you think that the new property tax reforms are going to turn the market around, you may want to put the Kool-Aid down. My fellow Realtors, for the most part, seem to be hanging their hats on a market bounce once the tax changes take effect. I think that that may be wishful thinking. Craft your selling strategy carefully and seek advice from multiple sources. As always, question everything.

Quick Stats Mid-June

I'm back after a 2 week trip. Sorry for the lack of posts during this time. For now, here are the inventory and sales stats for June 20, 2007.

MLS-listed Properties in Cocoa Beach and Cape Canaveral

Condominiums, all prices______969
Single family homes, all prices__179

Condos over $500,000________163
closed since Jan. 1, 2007_______18

Homes over $500,000_________79
closed since Jan. 1, 2007_______7

No comment necessary on the trend here. The song remains the same and prices are continuing down with a few jaw-dropping price reductions. Check back for a new post coming concerning the specific history of a disaster listing and the high cost of denial.

Comp Killers

An eagle mortally wounded by an Archer was greatly comforted to observe that the arrow was feathered with one of his own quills. Like Aesop's eagle, I try to find some comfort in the fact that every good deal that I hammer out for my buyers actually negatively impacts the value of my own property. I'm a comp killer, as is every one of your neighbors and friends that sells for a bargain price.

As a matter of fact, my office is full of comp killers. We didn't set out with this in mind but it happened. By aggressively seeking out the best offerings and negotiating the best terms for our buyers we have severely wounded the comparables in the buildings and neighborhoods where the great deals have closed. An unintended consequence of every great deal is that the next appraisal of a similar property in the same area will be affected negatively. The units in a particular oceanfront building that were selling for $350,000, 4 months ago will have trouble appraising for that today after the recent sale of one for $290,000 to one of my buyers. Whether you're buying or selling, you'd better be aware of the most recent sales if you plan to get the best possible deal for yourself. Don't trust the water cooler or country club talk. If you'd like to know what the comps are right now, call me at 321.917.5786 or email me.

The Cocoa Cabanas luxury 8 unit project at 19th St. south is toast, at least with the original owner. With not enough unit sales (possibly none) even after dropping prices by a quarter million dollars, the property has been sold, undeveloped, (to another developer according to word on the street). Recorded price for the .65 acre oceanfront parcel was $1.4 million. Across the street at Magnolia Bay only 8 deeds have been recorded since the first one in January out of an estimated 62 total. The third building is not finished and work is moving very slowly, probably a good short-term strategy to delay the day that skittish investors are forced to make the hard decision of whether to close or default.

I thought I'd take a look back to Memorial Day last year. These are the numbers of MLS-listed properties for sale in Cocoa Beach and Cape Canaveral.

MEMORIAL DAY 2007

• Total condos and townhouses___987
• Total single-family homes______167

MEMORIAL DAY 2006

• Total condos and townhouses___1047
• Total single-family homes______138

Even though our market has gone through a major transition and values have dropped considerably, condo inventory is slightly less than one year ago. The number of single-family homes for sale has increased by 21% in the same period. Total MLS condo sales in Cocoa Beach and Cape Canaveral for 2007 through the end of April was 123 compared to 194 for 2006, a drop of 37%. Although disheartening for those trying to sell, the good news is that at least 123 condo sellers successfully sold their units in the first 4 months of the year. If your goal is to sell, it's time to examine your pricing if you're not getting any action. If you're looking to buy, get your financing in order and take advantage of the comp killers' trickle down effect.

My neighbors and I in south Cocoa Beach have a great new place to eat, The Fat Snook. It's in the old Patrick Deli building next to Crescent Beach Realty across the street from the Carlyle condo. Open for dinner only with steaks, pasta and fresh seafood. I've had the cobia and the wahoo and both were excellent. It's small, so, you'll probably need reservations. Atmosphere and dishes along the lines of the Pompano Grill, another favorite of mine in downtown Cocoa Beach.


Please take care at the beach this holiday weekend. Hard onshore winds have created dangerous conditions with strong rip currents. Keep the kids and the old man out of the water. Have fun and be safe.

The Road Less Traveled Gets Some Traffic

I was pleasantly surprised to learn through my Google alerts today that my most recent post, Armed Robbery - Broker Style which also made last week's Carnival of Real Estate had been chosen as one of the nine best blog posts on any subject in the blogosphere last week by Political Calculations. As they put it, Absolutely essential reading! That might be over the top but I'll take it. The subject was important.

[edit-May 23] The same article has been picked up for the Fraudfiles blog over at Sequence Inc., Forensic Accounting Answers.

If you've never used Google alerts, give it a try. Your alert will email you links to any new appearance of your search term on the internet, in this case, "Larry's Take". I would never have known about the selection otherwise.

If you've defaulted on a pre-construction deposit or are thinking about it, I'd like to hear from you. I'm hearing lots of stories now and would like to hear from sources close to the action. I promise confidentiality. With the small number of new deeds being recorded at completed projects, it's become obvious that the number of defaults at some projects is higher than even I expected. You can email me at larry@southcocoabeach.com

Unarmed Robbery - Broker Style

I witnessed a bold unarmed robbery attempt last week. I was representing the buyer in the purchase of a condo. On the HUD-1 settlement statement that was sent to me before the closing, I noticed that the listing broker had added a $395.00 "regulatory compliance fee" for the seller to pay. This was in addition to the commission the seller was paying to the broker to sell his condo. What is a regulatory compliance fee, you ask? It's the real estate equivalent of gratuity added. In other words, a rip off. The dressing-up of this junk fee in official-sounding lingo was designed to make the seller think that it was a required fee, but, it wasn't. It's a tactic used all the time by unscrupulous agents and brokers to line their pockets. It is common with at least one of the big national real estate companies. I know from personal experience that some companies pressure agents to include these fees in all their deals. This particular seller suffered the indignity of having his own broker attempt to con him out of an extra $395.00 above the $23,800 he had agreed to pay the broker to sell his property. In this case, the seller was sharp enough to question the fee and it had miraculously disappeared from the HUD-1 by the actual closing.

When I used to work for one of the big national franchises, some of the agents in the company tacked these junk fees on all their deals, usually calling it a "transaction fee". It was encouraged but not required by the broker. Just like in this most recent example, if the client objected, they would drop it, but, if nothing was said, yahoo, free money. I never participated in this practice because it didn't pass the smell test then and still doesn't. Adding the word "regulatory" to this rip-off fee just intensifies the foul odor.

Be careful what you agree to pay. In most cases, the commission you agree to pay to the listing broker should be all that you are obligated to pay them. If you notice some additional fee to the listing broker on your settlement statement refuse to pay it unless they can justify it. You may want to read a couple of my earlier posts on agent shenanigans

I'll leave you with a couple of shots of last Sunday's farmers' market in Cocoa Beach. The tomatoes tasted even better than they looked.





We woke up this morning to a massive north swell that arrived last night from the extra-tropical low off the coast. Our 120 mile buoy was reading the swell at 25 feet with a 16 second period this morning and conditions are big and challenging. Looks like a few days of epic surf for the local crew who are up for the paddle.

Reality Check, Part 2

This is not a true story but is loosely based on a true story from April 2007. The implications are very real.

Two waterfront condos have been on the market for around a year. Condo A is listed for $342,000 after being dropped from $384,000 . Condo B, same floor plan in the same building, after being originally listed for $359,000 gets progressively dropped until, in desperation, the seller suddenly drops the price to $275,000 and gets a contract immediately. The owner of Condo A knows his unit is nicer and, he feels, in a better part of the building, so, he feels comfortable with his higher price. Condo B closes for $275,000 a few weeks later. The seller of Condo A thinks that, now, with the pesky desperate seller out of the way, he'll sell his unit at close to his price. He gets a showing a few days later and accepts an offer for $325,000, not as much as he wanted but enough. Inspection goes well and all is good UNTIL the appraisal comes back. The appraiser's most recent comps include the recently closed Unit B and even with adjustments for condition and location the value comes in well below the contract price. What now? The buyers cannot get the 80% mortgage that they planned to use to purchase the unit. The seller either agrees to reduce the price to the appraised value or he stands firm and puts his unit back on the market hoping for a cash buyer willing to pay more than the appraised price. Meanwhile, yet another seller in Unit C is blissfully listed for $390,000, mentally spending his profits, unaware of the recent abrupt changes in the value of his unit wondering why his listing agent in another city hasn't called lately.

This story has very real implications for those sellers waiting for the market to turn around. I had to go back to an owner just this week to renegotiate a deal after the appraisal came in light. The comps that brought the appraisal in below our contract price were recent sales by owners who could not afford to wait out the downturn. Those fire sale prices are now rippling through every subsequent deal of comparable properties. If you are hoping to sell, it would be prudent to pay close attention to what is going on with nearby properties. The strapped investor who is forced to bail in a nearby building will likely affect all appraisals of similar properties nearby for the immediate future. Stay on top of market conditions or pay the price.


Closed MLS sales in Cocoa Beach and Cape Canaveral

CONDOS

• April____2007__37 __only 2 over $500,000
  
• March___2007__28
• February_2007__35
• January__2007__23

SINGLE FAMILY HOMES

• April____2007___3
• March___2007___8
• February_2007___6
• January__2007___3

Current Inventory

• Condominiums______970 all prices
• _________________172 over $500,000
• Single family homes__157 all prices
• _________________70 over $500,000

April was our busiest month so far this year for condo sales with 37 units closed. I'm happy to report that our little company has participated in a significant number of these transactions. Separating our year-to-date sales at the half-million dollar mark we see that since January 1, 2007, 13 condos over $500,000 have closed in Cocoa Beach and Cape Canaveral. At this rate, we have a 4.4 year supply. In the same period, 121 condos under $500,000 closed. That translates into a 2.2 year supply in the below $500K price range.

If you've got any stories or observations about anything of interest in our great little beach town, please email me Don't forget the farmers' market every Sunday morning behind the Cocoa Beach City Hall. Lots of produce, neighbors and fun.

Reality Check 101

I thought by this point in the cycle that most property sellers would have come to terms with the new conditions in our real estate market. Not so. There are large numbers of owners who are clinging to a 2005 reality. If you're trying to sell a property you may want to get a second opinion if you've caught yourself saying any of the following:

* I won't sell for less than my payoff.
* I'll just hang on to it until I get my price.
* I'll wait for the market to turn around.
* I need to clear enough to (fill in the blank).
* I'll just rent it until the market turns around.
* My neighbor got $X for their's.

People, these are all forms of denial. It is what it is. What your condo was worth in 2005 has no bearing on what it's worth in 2007. The unfortunate reality is that we had an unsustainable run-up in prices and they have reversed direction. This is true in most markets in the United States. There are many factors contributing to the decline. In my opinion, the biggest factor is the decline itself. The thousands of investors who were buying property strictly for the appreciation have disappeared along with their exotic, easy-to-qualify-for mortgages. There are still buyers in our marketplace but they are buying to move into and they know they're in the driver's seat. If you aren't flexible, they'll just go to your neighbor who may have moved past his denial and transitioned into a let's-do-a-deal mentality. If you want to sell your property, take this reality check.

* What are similar properties being sold for today?
* What is it costing me every month that I hold on to it?
* What is it likely to be worth a year from now, two years?

There is the possibility that this market will turn around and take off again soon. I think that is unlikely considering inventory levels and changes in the mortgage market, but, as always, I could be wrong. If you disagree and are willing to take that chance, hang on. Consider that your taxes and insurance in our county will run somewhere around 2% to 3% annually not including lost opportunity on the equity. Add mortgage interest to that and a $500,000 property with an 80% mortgage will cost around $40,000 per year excluding any tax benefits with no repairs or maintenance while waiting out the downturn.

I have been involved in 3 deals in the last 2 weeks in which the sellers had been trying to sell for at least a year but were hanging on to unrealistic prices. Had they priced aggressively earlier they could probably have sold for more. Denial carried a heavy cost in these cases.

My point here is to be realistic with your pricing if you must sell. Talk to someone who is knowledgeable and willing to tell you the truth about the market and price to sell. If you're looking to buy, there are some incredible deals to be had if you're looking for a place here. Even though double-digit appreciation is unlikely to resume anytime soon, this is still a magic little beach town with friendly residents and an abundance of natural beauty. We welcome new neighbors who will come to love this special part of Florida like we do.

I'll leave you alone on a beautiful day at a park in south Cocoa Beach waiting for the manatees and dolphins. Picnic anyone?

Relatively Speaking...

March was a fair month for real estate sales in Cocoa Beach and Cape Canaveral. Unless, of course, you compared it to the halcyon days of March 2005. We had 28 MLS-listed condo sales (2 over $500,000) and 8 SF home sales (3 over $500,000) compared to 81 and 15 respectively in March 2005. Condos have averaged around 1 sale per day so far in 2007 with little variation while single-family home sales have been steadily increasing. At the current rate, we have a 19 month supply of homes and a 34 month supply of condos in all price ranges. If I isolate the $500,000 plus condo market, things are considerably less rosy. At March's sales rate we have an 85 month supply of half million dollar plus condos. Homes over $500,000 are in much better shape with only a 21 month supply.

Closed MLS sales in Cocoa Beach and Cape Canaveral

CONDOS

• March___2007__28
• February_2007__35
• January__2007__23

SINGLE FAMILY HOMES

• March___2007___8
• February_2007___6
• January__2007___3

Current Inventory

• Condominiums______954 all prices
• _________________171 over $500,000
• Single family homes___156 all prices
• _________________63 over $500,000

Offshore fishing has picked up and the winds have finally eased off. Catches this week have included lots of wahoo and dolphin and some decent catches of grouper and snapper. A few boats have made the trek to the other side of the Gulf Stream to hunt for tuna. Most of them scored decent catches of yellowfin to 80 lbs. and smaller blackfins. I slipped out one day with a couple of friends and managed a small wahoo. Here is one of my favorite ways to enjoy wahoo.

Wahoo and avocado tiradito

Deja Vu, All Over Again

I thought I'd revisit my comments from a year ago as, by this time last year, the slowdown was beginning to catch everyone's attention. This excerpt is from March 22, 2006.

"Are there problem areas in our market? Yes, most definitely. I've been cautioning about speculation in high-end condos for some time now. I suspect that there will be a lot of pain among the pre-construction investors in high-end condos this year. But at the same time, thousands of homeowners will be enjoying Cocoa Beach for it's beaches, surf, fishing, wildlife and all the other things that make this such a special place in the world. Will the speculators' departure affect this underlying market? Probably. All markets operate on supply and demand."
Read the entire post here.

Sales in 2007 have slowed from the same period a month ago and condo inventory continues to creep upward. Single-family home inventory took another big jump and is at a record-setting 173 MLS listed homes in Cocoa Beach and Cape Canaveral. I'm happy to report that our office participated in a large number of the few sales so far in March.

Here's the steal of the week; south Cocoa Beach direct river, 2/2 condo across the street from the beach listed for $274,900 ($60,000 less than the owner paid 2 years ago). This is the view.



Cocoa Beach and Cape Canaveral MLS Stats

Sold March 1 through 18
Condominiums____10
Single-family homes_5

Active for sale
Condominiums____1022
Single-family homes_173

If you have ideas for future posts or comments, please email me.

Inventories and Sales numbers

I thought I'd do a little more deep analysis after the responses to the "Under the hood of the MLS" article. I went back and pulled up inventory and sales figures for the last three spring seasons. The results were surprising. I expected to see the rapid increase in inventory but I did not expect sales in 2007 to be as strong in comparison as they were. Here goes:

Inventory of MLS properties in Cocoa Beach and Cape Canaveral

April 2005
Condominiums__420
SF homes______45

August 2005
Condominiums__443
SF homes______62

October 2005
Condominiums__558
SF homes______63

January 2006
Condominiums__785
SF homes______102

May 2006
Condominiums__1047
SF homes______138

March 4 2007
Condominiums__1023
SF homes______154

Sales from Jan. 1 through March 4

2005-Condominiums__139--SF homes__9
2006-Condominiums___73--SF homes__10
2007-Condominiums___54--SF homes__11

The shocker for me in these numbers was the constant rate of sales for single family homes. 2007 has actually been the busiest Jan-Feb season for sales of homes. Condo sales, as expected, have been in a constant decline since peaking in 2005. Another surprise is the level inventory number. We first topped 1000 in total condo and townhouse listings in Cocoa Beach and Cape Canaveral in May 2006, but have hovered around the 1000 number since while single family home numbers have continued a slow increase.

Our inventory has gone from a 6 month supply for condos and 10 month supply for homes in spring 2005 to a 38 month condo supply and a 28 month home supply in 2007.

Conclusions; If you're selling, don't despair. Sales are happening. There is just much more competition and prices have declined. Do your market analysis and be realistic with your pricing. Don't be insulted by low-ball offers. They are the norm now. Reframe your take on a low offer as an invitation to negotiate, not as an insult. Be prepared to take longer to sell unless you price aggressively to move to the front of the line. If you must sell, you cannot afford to price at or above competing properties. You must lead the pack and price under the competition, all other things being equal. Don't forget your carrying costs if you're willing to wait until you get your price. The cost of an extra 6 months selling time on a $500,000 property can easily exceed $20,000 in interest, taxes and insurance. If you want straight advice about selling your home in this difficult market, call me at 321.917.5786 or email me. Things have changed and successfully selling a home requires adapting to the changed market.