Sunday, May 27, 2007

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.

  • Total condos and townhouses___987
  • Total single-family homes______167
  • 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.