Sunday, December 28, 2008

Cocoa Beach 2008 Year in Review

A Cocoa Beach kid scratches out the last sand message of 2008 on a warm and beautiful December 31, 2008.

The year 2008 began on a gloomy but hopeful note as sellers of real estate in Cocoa Beach and Cape Canaveral were reeling from the price drops of 2007, but, just like the two previous years, were hanging their hats on the spring "selling season". The season brought increased sales but, just like the two previous years, more downward pressure on prices. There was a big increase in waterfront single-family home sales in 2008 with a total of 45 MLS-listed homes selling compared to only 28 in 2007. I think this can be attributed to the reduced expectations of sellers as they finally began accepting the new reality and reduced their prices to a point attractive enough to generate offers. In 2008 there were 10 MLS sales of canal homes in Cocoa Beach for $300,000 or less with the lowest going for $200,000 compared to only two going for under $300,000 in 2007. No MLS sales of single-family homes exceeded $1 million in 2008 unlike 2007 when four sales surpassed the million dollar mark.

The condo market was similar with not a single sale over the magic million dollar mark in 2008 compared to five closed MLS sales exceeding $1 million in 2007. Over half of all condo sales in 2008 in Cocoa Beach and Cape Canaveral were for less than $200,000. For developers, 2008 was a particularly dismal year with sales practically at a standstill for the luxury buildings with one shining exception, The Meridian. Of only 20 MLS sales of condos over $500,000 in 2008, eleven were at the Meridian. While units were selling there the other new luxury buildings were virtual ghost towns except for lonely Maytag repairman/realtors sitting in the models waiting for the buyer who never showed. I expect some sort of watershed event in 2009 with the empty new buildings. Whether financed with OPP or self-funded, these multi-million dollar projects that aren't selling represent a lot of dead and decaying money that at some point will become too stinky to hang onto. It will likely take substantial price reductions to move the 100+ new, luxury units that are still available this last day of 2008.

At least one new complex reached the breaking point this year. At this four-building Cape Canaveral oceanfront complex, 2008 began with multiple unsold units, 39 of which were put up for auction in May. Eleven of the units sold at the auction, several under $200,000, less than half the recent asking price. Since then at least one non-developer unit has closed for below $200,000 and the developer has been served notice of foreclosure on 16 of the remaining unsold units. Values of all units here, distressed or not, are affected. The lowest MLS selling price in this complex in 2007 was $280,000. It hit $196,000 in 2008.

While the macro-economic outlook remains uncertain, mortgage rates are at obscenely low levels and sellers, for the most part, have become more realistic in their expectations. If you didn't have the bulk of your assets parked with Bernie Madoff or invested in Citi, Lehman, General Motors or any of the other thousands of dogs this year and are still looking for your special beach place, 2009 might just be the year for you. Considering the huge amount of retracement in prices that has already taken place and the changed seller sentiment, I think that 2009 will be a bargain hunter's delight. Many prices are now below replacement cost and sellers and lenders are very motivated to move properties. If you have the nerve, now's the time to be cautiously looking. More than a few buyers were able to hammer out attractive deals this past year. Below is a handful of some of the more outstanding deals of 2008. There were others but these stood out.

A sampling of the best deals of 2008

Puerto del Rio 2348 sq.ft. top floor, 1 yr old $215,000
Constellation 6th floor direct ocean, 2484 sq.ft. $400,000
River Bend top floor side view, 2292 sq.ft. $265,000
Solana River 2nd floor direct river, 1918 sq.ft. $174,300
Windrush (ocean) 1st floor no view, 1517 sq.ft. $157,500
Sutton Place on the Ocean 2nd floor, 691 sq.ft. $110,000
The Sands 4th floor direct ocean, 1334 sq.ft. $265,000
Harbor Isles top floor direct river, 1308 sq.ft. $210,000
Cocoa Beach 3/2 canal home, needed work $200,000

And my pick for Deal of the Year

A 1938 sq.ft. 3/2 beautifully-remodeled home with 135' on the open river in south Cocoa Beach (beach is right across the road here) on 5 lots (two zoned commercial on A1A) that closed in July for $670,000 Was listed for $1.9 million just 11 months earlier. That, ladies and gentlemen, is a major change in seller expectations and the smoking deal of 2008.

I hope the new year brings you happiness and reward. Whatever it brings, I will be happy to experience it in Cocoa Beach, my favorite town on Earth.

"And the tide rises, the tide falls."
Henry Wadsworth Longfellow

Saturday, December 27, 2008

$40,000 Christmas present for all

Those of you tracking property prices with intentions of possibly purchasing should also be looking at the impact of interest rates if you're planning to finance your purchase. Freddie Mac's December 24th survey finds the national average of 30 year fixed rate mortgages at 5.19%, their lowest point of the year and a full point and a quarter below the rate just seven weeks earlier. The payment on a $300,000 mortgage has dropped by $252 per month in just seven weeks, the equivalent of a $40,000 price cut. Definitely not insignificant.

The weather in Cocoa Beach continues to hover in the mid-70s as we approach 2009. I'm seeing winter on the TV but it just hasn't touched us here, yet. My best wishes to all of you for a prosperous New Year. I will do my year-end wrap-up next week with my picks for deals of the year with a few dubious distinctions for flavor. Should be interesting. Peace out.

"I can breathe in a small town."
_________John Mellencamp

Saturday, December 20, 2008

Morning Glory

Sunrise at 12th St. South, December 18, 2008

What a week of beautiful weather we've had in Cocoa Beach. While the Weather Channel has focused on the winter storms in other areas of the country, we've been in the 70s every day with little or no wind and a persistent, clean, head-high swell to keep the surfers occupied. The great beach weather has made procrastinating about holiday shopping justifiable, at least in my mind.

As is normal for this time of year, with time off for the holidays, buyers are out in force and we will likely see quite a few properties go under contract before the first of the year. Among the likely targets are the recently reduced direct ocean 2/2 at Waters Edge in south Cocoa Beach. This unit is now offered as a short sale with a suggested price of $179,000, the lowest priced direct ocean 2/2 by a mile. It's view is obstructed by the dune vegetation but it is now priced as if it were smaller, crummier and blocks from the beach. Another favorite of mine is a big (1447 sq. ft.) 3rd floor, 2/2 south view at the 11 year-old Sand Dunes building in Cape Canaveral just reduced to $299,000. Offered fully furnished. The 3000 sq. ft. penthouse direct river unit at Crescent Palms that I mentioned in an earlier post that was offered as a short sale for $399,000 is under contract. None of the units mentioned here are listed by my firm.

Hope you all have a happy and safe holiday season and that the new year brings you prosperity and fulfillment. If you need to contact me before December 26, forget the email and please call my cell, 321.917.5786. I'll be back in the office on December 27. I'll leave you with a shot of a secret holiday pool somewhere in south Cocoa Beach.

"Look at the stars and how they shine for you, and all the things that you do."
______Chris Martin - Coldplay

Monday, December 15, 2008


The shuttle Endeavour catches a ride back home on a 747 last Friday after initially landing in California due to bad weather at the Cape. The pilots usually cruise low and slow down the beach when returning for all to see. I've seen proud locals spontaneously stand from their beach towels and applaud the safe return of our spacecraft as it cruises by. It's a goose bump moment the first time you see this public display of patriotism and local pride.

Sales and listing activity has been slow as everyone's focus has shifted into holiday/year-end mode. There have been three closed sales of condos so far this month in Cocoa Beach and Cape Canaveral with 20 new contracts executed in the same period. Hopefully we will see a spike in new listings after New Years for those of you still waiting for that perfect unit at the right price.

Among the attractively priced oceanfront units currently offered is a new short sale listing at Park Place in downtown Cocoa Beach; a 2nd floor, 2/2 direct ocean unit being offered for $270,000. There is also a top floor, direct ocean 2/2 at Spanish Main being offered for $299,900. Spanish Main is one of the small handful of buildings that allow weekly rentals. These units rent for between $800 and $1200 per week for most of the year. This is the view.

MLS inventory Dec 15, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____738
over $500,000_________98 - 28 sold since New Year's Day
Single family homes___116
over $500,000_________35

"You'll shoot your eye out, kid."
______Santa Claus to Ralphie

Thursday, December 04, 2008

System of a Down

Delta rocket vapor trail over Cocoa Beach

Today we get another case history of a bad selling strategy. This is the price history of a 3rd floor original condition, side view condo in an older oceanfront building that has been on the market for 687 days.

Jan. 17 2007 - first listed for $499,000
Jan. 13, 2008 - price drop to $349,900
May 10, 2008 -- 2nd drop to $324,900
June 12, 2008 -- 3rd drop to $319,900
Aug 08, 2008 --- 4th drop to $315,900
Sept 08, 2008 ---5th drop to $310,900
Oct 09, 2008 ----6th drop to $305,900
Nov 08, 2008 --- 7th drop to $300,900
Dec 04, 2008 --- 8th drop to $299,900

After 687 days on the market this seller has shaved 40% off his asking price. During the time since first listing there have been sales of five units in the building, two for $330,000 and three for less than the current asking price. Several were in better shape than the subject unit. Today after eight price drops he is still asking more than two other currently-listed units in the building. My suspicion is that the price drops are not over if he seriously wants to sell. Since the day this unit was first listed, 181 oceanfront condos with at least 2 bedrooms and 2 baths have closed in Cocoa Beach and Cape Canaveral for less than the original asking price of this unit. Sellers take note. This is not the way to sell your unit.

"You say it best when you say nothing at all."
_______Paul Overstreet and Don Schlitz

Sunday, November 30, 2008

Free Falling

Mortgage rates have been in virtual free fall for the last month dropping almost three quarters of a point in 30 days. The monthly payment on a $300,000, 30 year fixed rate mortgage this week is about $150 less than the same mortgage initiated just 30 days ago.

Condo sales for the month of November were slow as expected and exactly matched last year's number for the same period with 17 closed sales reported on the Cocoa Beach and Cape Canaveral MLS. Only one sale exceeded $325,000 and seven of the sixteen were either short sales or foreclosures. Notable sales included a foreclosed two year old, 3 bedroom, 2.5 bath townhouse in Cape Canaveral, one block from the ocean that sold for $149,900. Selling price exactly two years ago when it was new was $350,000.

There have been 120 price reductions of condos during the month of November increasing our somewhat meager supply of attractively-priced units. Two of the price reductions were in one of my favorite river buildings, Majestic Bay in Cape Canaveral. I like this 3-year-old building for it's very private location, the extra amenities and excellent construction and workmanship. One of the units is a 1900+ sq. ft., 2nd floor unit with a private 2 car garage offered as a short sale for $279,000. It sold in February 2006 for $445,000. The other drastic price reduction in the building was the developer's personal 4th floor corner unit with a deeded boat slip and 2 car garage. The price of this gorgeous unit with many extras was dropped from $475,000 to $349,900 making this one of the smoking deals of the moment.

"In the middle of every difficulty lies opportunity."
_________Albert Einstein

Thursday, November 20, 2008


I received word yesterday and confirmed this morning that a lis pendens or notice of foreclosure has been filed against one of our local developers on 16 of the unsold units in a big condo development in Cape Canaveral. This will likely further depress prices in this complex which took a hit earlier this year when the developer auctioned off several of the unsold units. One bright spot in this unfortunate situation is that at last these units, once sold, will begin contributing monthly condo fees. The association, until now, has been receiving no monthly fees from these units. We also had a sweeping series of price reductions of luxury oceanfront units at Meridian and Michelina on the beach this week. While the crack sales team at Meridian has accounted for fully half of all over-$500,000 MLS-listed condo sales in Cocoa Beach this year, no MLS-listed Michelina units have closed since the developer's model sold in May this year. By the way there are 4 units at Michelina offered for $1.49 million and above, one for a cool $3 million.

In south Cocoa Beach, the developer has reduced at least one unit at Magnolia Bay to well below pre-construction prices. A few blocks south, another short sale is being offered at Crescent Palms, this time a south corner penthouse with 3000+ square feet that sold new in December 2005 for $775,000. Suggested price now is $399,000. The MLS-listed unsold units at the new buildings Ocean Cove, Ocean Paradise, Garden Bay and Garden by the Sea were all withdrawn on September 11 and have not been relisted as of this morning.

There have been 10 closed sales of MLS-listed condos and townhomes so far this month in Cocoa Beach and Cape Canaveral. Only one was for more than $295,000. During the same period, three single family homes closed, one a short sale of a gorgeous Country Club waterfront home that sold for $449,000.

There are a couple of new listings of direct ocean units in weekly rental buildings this week that are realistically priced for those of you who have been waiting for something with high income potential priced right.

MLS inventory Nov 21, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____748
over $500,000_________91 - 29 sold since New Year's Day
Single family homes___116
over $500,000_________36

In case you were wondering, the ship in the photo is the 370' yacht, Le Grand Bleu , currently docked at Port Canaveral. You may have seen it across the channel if you've dined at Grills recently. This monster of a private yacht was a gift from Russian billionaire Roman Abramovich to his friend Eugene Shvidler. Thank goodness he didn't give it to me as the fuel bill for the twin 3600 HP engines is probably out of my budget.

"Never let the fear of striking out get in your way."
_______Babe Ruth

Wednesday, November 19, 2008

Dear Ms. Condo Seller

Dear Ms. Condo Seller,

I had a buyer stop in unannounced this morning wanting to see oceanfront condos. I called your listing broker hoping to show your unit. The broker informed me that they would not be putting a lockbox on your unit and that, instead, buyer's agents would have to pick up the key in their office, an 11 mile round trip from your unit to pick up the key and another 11 miles to return it. I applaud their effort to save money by not spending money on silly tools like lockboxes but, unfortunately for you, in trying to see as many units as possible today, our schedule does not allow the time necessary for the trips to pick up and return your key. Good luck selling your condo in these difficult times. Oh yeah, love the blurry pixelated cell phone photos of your unit on the MLS. If I squint my eyes and shake my head while looking at the photos, your unit looks lovely.


The Buyer's Agent

P.S. I don't mind driving an extra 22 miles for my buyers and, next time, with advance notice, I will pick up the key in advance but, today, the situation did not allow that. You may want to request that your broker provide a lockbox and decent MLS photos. Remember, you're only looking for one buyer, so, you don't want to chance excluding anyone with difficult access or unappealing photos.

"I cannot give you the formula for success, but I can give you the formula for failure..."
_______Herbert Swope

Disclaimer: This letter was not actually sent to the seller as that would be inappropriate, although the story is true. My intention in posting this is to inspire all sellers to investigate the efforts of their brokers and to be proactive in reducing friction in the selling process. Successfully selling a property in today's competitive market involves more than correct pricing and effective marketing. Providing easy access is paramount as are decent MLS photos.

Tuesday, November 11, 2008

Silly Games and Pompano

November surf fishing in Cocoa Beach, hoping for a pompano.

Below is the listing history of a waterfront home in Cocoa Beach.
I'm not sure what the strategy is here but apparently the seller believes that there is a buyer out there who will make a move when the price hits the magic number. With such teeny price drops the seller is obviously afraid of selling too low but must have some motivation in selling unless this is just a crazy MLS experiment. After 22 price drops in 4 months without a sale, two things are obvious; the price is still too high and the seller is not serious about selling. I always investigate the current and previous listing histories of target properties before making an offer in hopes of getting some indication of the seller's level of motivation. Much can be learned from these histories. My take-away from this particular history and the silly series of small price drops is that this seller is not realistic about the market and will probably be reluctant to accept well-researched comps and a fair offer. If you are trying to sell your property, I would advise researching recent sales and competing properties and to price your property at or just below what the comps tell you is fair market value. Don't waste your time playing games like this seller if you really want to sell.

"Never play cat and mouse games if you are a mouse."
_____Don Addis

Tuesday, November 04, 2008

Reason # 81 to Love Cocoa Beach

I took the photo above of the Living Bread Fellowship, a tiny church in south Cocoa Beach and my official polling location during the voting rush before work this morning. Note the long lines of voters. I was able to stroll in, vote and be out in about 15 minutes in what will likely be the heaviest election turnout in American history. Just another in the long list of benefits of small town living and, specifically, of living in Cocoa Beach.

We had a total of 23 closed MLS-listed condo sales in Cocoa Beach and Cape Canaveral in the month of October and 6 single-family home sales. That number could drift slightly higher as tardy listing agents update their listings. There were no sales for more than $500,000. In fact, and not surprisingly, there has been only one closed condo sale of over $500,000 since August 1.

Among sales of note, was a 4 bedroom, 2 year old Oak Park townhome in Cape Canaveral for $180,000. Sold just 2 years ago for $299,900. A very cute, remodeled, 2nd floor, 1/1 at Sutton Place on the Ocean in south Cocoa Beach was picked off for $110,000.

Mortgage rates continue to be volatile with 30+ basis point swings happening three times in the last 30 days. We are currently hovering around 6.3% for 30 year fixed rate mortgages, just below the 5 year high set in July of this year. That rate could change quickly and significantly in either direction if the recent volatility continues.

There remains a dearth of decently-priced direct ocean condos. If you're looking, be prepared to wait but be ready to move when something attractive does come on the market. There are quite a few buyers on the sidelines waiting for a decent deal. The total number of listings is shrinking as many sellers write off the last quarter of the year when sales are at their yearly lows and pin their hopes on the snowbird season which cranks up in force in Cocoa Beach and Cape Canaveral in January. Expect more new listings then.

"Perhaps we are asking the wrong questions."
______Agent Brown - The Matrix

Saturday, November 01, 2008


"No one told me that it was going to be this bad."

Imagine that you just purchased a unit in an oceanfront building at what seemed a good price and the seller was honest enough to disclose, and kind enough to pay, the upcoming assessment for concrete repairs. You probably felt good about your purchase until the crews finished setting up and got into the heavy jackhammer work making life in the building unbearable during working hours. After talking to neighbors in the adjacent building who just finished their concrete project, you realize that you're faced with up to two years of daily tooth-rattling noise, construction equipment and crews everywhere and a swimming pool that's unusable because it's been covered for protection from the concrete dust. Mortgage payments, condo fees, property taxes and utilities continue to be due for the duration of the project whether you can comfortably use your unit or not.

Concrete renovation projects are part of life in oceanfront buildings (thankfully, not frequent) and knowing about upcoming projects and the possible implications for life in the building during the project is part of the homework that I am constantly mentioning here to prospective condo purchasers. If a prospective owner doesn't consider the life interruptions that are part of major projects, they may have regrets even if they are OK with the cost. As part of due diligence for a condo purchase, I recommend reading the minutes of as many recent association meetings as are available in addition to inspecting the financials and budgets. Upcoming projects may or may not have been mentioned in a meeting, so, it's always a good idea to ask direct questions to the seller, their listing agent, board members and neighbors, if possible. In addition, a good buyer's agent should have some knowledge of the history of past projects on the building and should be investigating possible upcoming work on your behalf.

The building pictured above has just begun it's concrete project. There are units for sale in this building priced at the same level as units in similar buildings in this part of the beach that have recently completed their concrete projects. All other things being equal, the choice for an informed buyer is easy. Do your homework.

"However beautiful the strategy, you should occasionally look at the results. "
______Winston Churchill

Friday, October 31, 2008

It IS Different Here!

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

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

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

Tuesday, October 28, 2008


A fun fall day in and out of the water in Cocoa Beach.

The word doo-doo still makes me smile years after I first heard my mother use it to describe something that was often referred to in much less attractive terms by others. The real estate machine and it's members are notorious for using similarly softened words and phrases to describe the real estate market when it's not pretty; "soft landing" "slowed market" and so on. The surprising increase in sales numbers in September and the accompanying fall in median prices is being veneered with a pleasant-sounding spin once again by the cheerleaders, but, I still suggest maintaining the same level of diligence and skepticism I have been preaching for the last few years. Are there deals out there? Absolutely, but, some buyers, perhaps buying into the "doo-doo" speak of their agents, are overpaying for properties. Run your comps, look at the competition and factor in some insurance to the downside when making your offers. We've had some outstanding deals so far this month but there have been a couple of stinkers mixed in. If your agent is preaching the positive aspects of this market (time to buy, bottom, etc.) or you suspect that she is more concerned with inking a deal than in her representation of your interests, take a breather. We agents only get paid when a deal closes and sometimes the lure of a commission check may be enough incentive for a hungry agent to describe a turd in less offensive terms if it means getting a sale. Crap by any other name ...

Click here for a list of all 16 closed sales in Cocoa Beach and Cape Canaveral since Oct. 1.

"It is better to know some of the questions than all of the answers."
_______James Thurber

Thursday, October 16, 2008

Wish You Were Here

October sunset over the Banana River in Cocoa Beach.

Halfway through October and we've seen only eight residential sales close so far in Cocoa Beach and Cape Canaveral. Of the eight, only one was a single-family home, an older 3/2 Cocoa Beach canal home in good condition on Blakey that went for $295,000. The condos closed so far have ranged from a small Canaveral Breakers 2/2 for $85,000 to a 6th floor, 2484 sq.ft. 3/2 Constellation that went for a shocking $400,000. I was happy to assist the buyers in this sale and it may represent the lowest price per square foot for a high floor direct ocean unit for the entire year of 2008. A non-direct Shorewood 3/2 corner unit without a view closed for $220,000 or just over $104 per square foot. Not bad for a fully-furnished 10 year old unit in a nice complex.

Our inventory continues to shrink and is at it's lowest level of the year. As I've mentioned before, there is a rather large shadow inventory of luxury condos held by developers that is not included in the MLS numbers below. Sales of new units have almost completely dried up and crunch time is nigh for the handful of new developments that are still sitting on significant numbers of unsold units. Like the slow motion sub-prime crisis, this is taking far longer to play out than I imagined but, make no mistake, the day of reckoning is coming.

MLS inventory Oct 15, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____709
over $500,000_________78 - 28 sold since New Year's Day
Single family homes___112
over $500,000_________36

Florida fixed rate mortgage rates have continued their sharp upward trend since the brief low in mid-September moving over half a point to the upside in the one month period.

"Are we human, or are we dancer?" Brandon Flowers - The Killers

Friday, October 10, 2008

Currency Exchange Implications

Cocoa Beach kids prepare the boat for a sunset boat ride on the Banana River.

If you're a foreign national and are planning on using another currency to purchase Florida real estate, you need to be aware of the exchange rate trend. Exchange rates have moved substantially in recent months in favor of the US dollar against most currencies, the Japanese yen a notable exception. The future trend can't be predicted but the recent move is cause for some concern if one is planning on taking advantage of the favorable exchange. One example: A famous Australian surfer purchasing a Cocoa Beach condo on July 1 this year needed 23% less Australian dollars for that purchase than if he waited just two months later simply because of the rally in the US dollar. Click here to read Dan Green's succinct post on the implications of these recent currency exchange movements as they apply to purchases of real estate.

"You can complain because roses have thorns, or you can rejoice because thorns have roses."

Saturday, October 04, 2008

I ♥ Cocoa Beach

Ah, October in Cocoa Beach. Cool mornings, light winds, deserted beaches, hungry snook and continuation of one of the best surf seasons since the mid-90s. Yes, October 2008, outside the crises of Wall Street, has begun as one to remember with a magical combo of all the things that make this little town one of the gems of Florida's east coast.

Our condo market (at least the low to medium priced segment) has been amazingly resilient in the face of tightening lending standards and daily negative headlines about the world economy. For the second time this year, condo sales exceeded the previous year's numbers. We saw a total of 31 closed condos sales in Cocoa Beach and Cape Canaveral in the month of September.

In the high-end condo market, only one unit over $500,000 closed in the month which brings the year's total sold in this market segment to 26 with 81 units actively for sale on the MLS this morning. The absorption rate looks reasonable at right around a 27 month supply, but, after adding in the unlisted developer inventory of new units, which I estimate at over 100, a different picture emerges, an over-5 year supply. Even if offered attractive incentives be cautious if you're considering a purchase in a complex with a high percentage of unsold developer units. There are critical issues that you need to consider that will not be brought up if you don't ask. Don't overlook units in older buildings with healthy associations. You can save hundreds of thousands purchasing in an exiting building and escape the uncertainty associated with some of the new complexes. And, most importantly, while you're looking, take the time to kick your shoes off and spend at least part of your day on the beach. Warm Atlantic water on one's toes is quite therapeutic.

"The time to relax is when you don't have time for it."
____Sidney Harris

Wednesday, September 24, 2008

Failure to Grok

N_A = (6.022 \, 141 \, 79\pm 0.000 \, 000 \, 30)\,\times\,10^{23} \mbox{ mol}^{-1} \,
Financial system rescue. On the one hand we have Treasure Secretary Hank Paulson telling us that quick action is imperative to avert imminent disaster while others are expressing skepticism about the immediacy of the problem and the cost-effectiveness of the plan considering the scale of the taxpayers' commitment. And of course we have those who are politicizing this issue, either criticizing or cheerleading the plan, depending on their own agendas. From the caliber of questions I saw being asked yesterday in the Congressional hearings, the average Congressman has as firm a grasp on the issue as a caveman has on Avagodro's constant (top of page). Thanks to Steve H. for bringing up this number. Don't ask.

How will a bailout or lack of a bailout affect the Cocoa Beach and Cape Canaveral real estate market? To be honest, I'm having trouble sorting out the possible impact. I've listened to the brain trust on CNBC parsing the plan and I've read as many commentaries as I could cram in between taking care of everyday business and I'm stumped. I want to believe that the smart guys in control will fix everything but then I remember that it was the smart guys who got us in this mess. Meanwhile, in Cocoa Beach and Cape Canaveral, MLS activity is steady but slow despite the doomsday rhetoric on the tube with 27 closed residential sales so far in September. While I continue to absorb info and postpone opinion, I think I'll walk over to Coconuts on the ocean for a seared tuna sandwich and watch the waves. Armegeddon can wait.

The drop below 6% for mortgage rates didn't last very long and the nationwide average is well off it's brief low of last week.

There are no new listings or price drops in the past week that I think worth mentioning other than a direct ocean 2/2, 2nd floor unit with a wide-open view in south Cocoa Beach for $282,500. The 2nd floor direct ocean 2/2 at Waters Edge is, remarkably, still available at an asking price of $219,000. Someone picked off a 2nd floor, 2/2 south view at River Lakes for a shocking $162,500 and a top floor A building Mystic Vistas unit is under contract for less than some of the auction prices back in May in the C and D buildings.

"The sad truth is that opportunity doesn't knock twice. You can put things off until tomorrow but tomorrow may never come. Where will you be a few years down the line. Will it be everything you dreamed of? We seal our fate with the choices we take, but don't give a second thought to the chances we take.
__Gloria Estefan

Monday, September 22, 2008

First Day of Autumn in Cocoa Beach

Sales activity continues it's seasonal slowdown as we officially ease into autumn today. There was a slight feeling of fall in the 80 degree air at sunrise this morning and the mullet are showing up in decent numbers in the surf as their annual run begins to pick up steam.

As of this morning, September 22, sixteen MLS-listed condos have closed in the Cocoa Beach and Cape Canaveral market in the month of September for prices ranging from $75,000 for a foreclosed 2/2 at Banyan Cove in Cape Canaveral to $742,000 for a big, 3rd floor direct ocean corner 3/3 in south Cocoa Beach. Some remarkable deals are happening for those buyers brave enough to make a move to pick off a weak straggler from the fringes of the nervous sellers' herd.

MLS inventory Sept 22, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____725
over $500,000_________82 - 28 sold since New Year's Day
Single family homes___116
over $500,000_________41

My favorite quote of the financial crisis so far comes from Mike (Mish) Shedlock's "open letter to Congress on the $700 billion bailout plan" this morning. Definitely worth a read if you want a perspective from the doubtful side of the aisle.

"If printing money was the solution to all problems, Zimbabwe would be the most prosperous country on Earth."

Mike Shedlock

Saturday, September 20, 2008

Heaven in a Small Dish

South Cocoa Beach delivered a knockout last night. It began with a simple spinach salad and lobster bisque followed by fresh grilled local grouper perched atop layered vegetables. All were excellent and I would normally have ended my meal at that, quite satisfied, but, since it was my birthday, I decided to go for a dessert. Holy cow! As a redneck gourmand my descriptive skills are somewhat lacking but I'll try. What appeared to be a straightforward crème brûlée revealed a few seconds into the first bite subtle flavors of peach that shifted into airy traces of lavender mixed with the toasted caramelized sugar that was last to dissolve on the tongue. This is only the second time that I've ordered dessert here, not being a fan of sweets. Both times, though, I've experienced such complex layers of flavors that I find myself slowing my eating to a crawl trying to discern each flavor shift. Last time was a similar dish, a crème brûlée but with flavors of bourbon and pepper drifting in and out of the background. All this gushing from a not-into-sweets guy. Thank you to The Fat Snook for once again delivering an eating experience that I'll be daydreaming about for days to come. I'll be back.

"One of the very nicest things about life is the way we must regularly stop whatever it is we are doing and devote our attention to eating."
~Luciano Pavarotti

Tuesday, September 16, 2008

There is a Silver Lining After All

Tiiiiiiimberrrrrrrr. Mortgage rates fall off the cliff.

Chart courtesy of

Buried beneath the onslaught of bad news in the financial sector recently is a snippet of good news for buyers of real estate. Regular readers of this blog know that I lean towards the pessimistic and am anything but a cheerleader for the housing market and the economy in general, so, pointing out good news may have you questioning my sobriety. Worry not, I retain my cautious outlook for our market in general and suggest continued patience if you are looking to purchase. My advice remains "don't compromise on the property you're looking for and drive a hard bargain when you do find it". Now on to the good news. An unintended side effect of the bailout of Fannie Mae and Freddie Mac last week was an immediate and dramatic drop in mortgage rates. Even as taxpayers will be shouldering a staggering amount of debt, those buyers taking on new mortgages will be getting rates lower by more than 1/2 of a point than in late August. For a purchaser of a $250,000 Cocoa Beach condo with an 80% - 30 year mortgage that reduction will amount to about $70 per month lower payment or the equivalent of about a $12,000 reduction in price. Not shabby.

With the failure this past weekend of Lehman Brothers, the buyout of Merrill and the future of AIG and Washington Mututal in question, the interest rate trend remains on the downslope with the yield on the 10-year bond hitting a 5 year low this morning, Tuesday Sept. 16. No one knows where this will all end or where rates will be in the near future but, for now, buying power is stronger for those financing their property purchases.

Serendipity is looking in a haystack for a needle and discovering a farmer’s daughter.
- Julius Comroe Jr.

Friday, September 12, 2008

Ahhhh, September in Cocoa Beach

Osprey riding the updraft over ocean condos this morning.

Welcome to the best time of year in Cocoa Beach. Summer is over on the calendar but the only indication on the ground here is the lack of traffic and small number of people on the beach. The summer tourists are gone, the kids are back in school and the snowbirds are months away from their annual influx. The weather is balmy and the water is warm and should stay that way through November.

A positive development this week is the dramatic decline in long-term mortgage rates following the Fed's bailout of Fannie Mae and Freddie Mac. 30 year fixed rates are once again below 6%. Real estate sales on the beach are slowing as they do every year this time. We fell back below last year's sales numbers in July and August and should follow the seasonal trend of declining total sales through November. That is positive for buyers and negative for sellers. Some of the more notable sales so far this month include;

5th floor direct ocean 2/2 Windjammer for $275,000
2/2 Beachwalk corner with boat slip and garage for $154,000
3 yr.-old, 3/2.5 River Gardens townhome w/2 car garage $175,000

One note about the inventory numbers below; there is a shadow inventory of luxury condos held by the developers that isn't included in the MLS numbers. By my unscientific count there are in excess of 100 additional over-$500,000 condos available for purchase in Cocoa Beach and Cape Canaveral that are not included in the MLS inventory of 78. If you're thinking of dipping your toes into this dangerous market segment, you need to understand the implications of this inventory and more specifically the implications of a high number of unsold units within a complex. You also need to thoroughly investigate the condo association's financials and budget. If the condo fees seem too low they probably are and will almost certainly be raised to adequately insure and maintain the complex. It's not uncommon for developers to keep fees low until a project is sold out. The owners at Crescent Palms can speak to this; the previous $300 a month has been increased to $505. Also, if buying in an older building, ask about upcoming concrete projects. Even if a seller is willing to pay the assessments for you, do you want to buy into a building just embarking on a project that could take two years to complete? Jackhammers and construction crews can make your beach experience less than idyllic. Grill your buyer's agent for all details about your target buildings.

MLS inventory Sept 12, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____733
over $500,000________78 - 28 sold since New Year's Day
Single family homes___118
over $500,000_________42

My favorite, attractively-priced listings in the MLS right now include;

9-yr old, 4/2 half duplex steps from the beach for $210,000
Big, 3/2 canal-front condo with boat slip for $235,000
Big, 4-yr old, 4th floor, 2/2 direct river w/expansive views for $266,900
Big, 8-yr old side ocean view 3/3 for $299,900 (sold in '06 for $600,000)

If you have questions about our market or you'd like to know more about these or any other listings, please email me.

One last note about my earlier report on the Mystic Vistas auction in May; I incorrectly reported that 12 units had closed from the auction. The actual number of closed sales (as recorded on the tax appraiser's site through Aug.20) is only 11, less than half the number widely rumored to have been sold at the auction. It is entirely possible that the developer is giving buyers longer than the stated 30 days to close but, at this point, we're past 90 days and counting, so, it seems likely that 11 is the real number. If that changes, I'll update in a later post.

"Fast is fine but accuracy is everything." Xenophon

Friday, September 05, 2008

TS Hanna Sept. 5, 2008

A couple of frame grabs below from the Cocoa Beach Pier cam at high tide, 1 PM today, Sept. 5, 2008. Tropical storm Hanna is about 100 miles due east. Wind is 25 mph out of the WNW and air temp is 77 degrees. No rain at the moment but small showers earlier this morning. The 20 mile buoy is reading 17.7 foot swells with 12 second periods. Surf is bigger south but cleaner at the pier and north into Cape Canaveral.

A stoked individual drops in on a big left out in front of the pier.

Also the occasional right peels through. No takers for this one.

Surfing can only be peripherally explained and described. It is far too complex and much too internalized to approach in any other way.
__________________Steffen Mackert

Saturday, August 30, 2008

REDUCED! ... meh

Looking up the channel along St. Croix from Fountain Cove.
Merritt Island in the distance and Banana Bay on left.


Like Lisa Simpson, when I see any of the above or similar phrases in a real estate listing I usually yawn and say, meh. However, it's the last weekend of summer, seller sentiment is changing and the headline "REDUCED!" is starting to mean something. When I sift through the 129 price reductions on condos and townhomes in the month of August in Cocoa Beach and Cape Canaveral I'm seeing some serious price drops unlike the, mostly, baby step reductions earlier in the year. The pressure of the end of the summer season is apparently being felt and some of the reductions are significant. For example:

Villa Verde 3/3 in south Cocoa Beach from $1.35 million to $899,999
Ocean Terraces 3/2 reduced from $699,900 to $599,900
Cape Hacienda 2/2 from $315,000 to $225,000
Waters Edge 2/2 direct ocean from $259,000 to $219,000
Dolphin Beach from $240,000 to $129,900
Brisas del Mar from $185,000 to $120,000
Cape Shores from $199,900 to $119,900

I don't consider all of these to be good buys even at the newly reduced price but the amount of the drops tells me that the shift in seller mindset is speeding up in it's move towards acceptance and away from denial. Even with the highly picked-over inventory I suspect that the next few months will present opportunity for ready buyers. I would suggest, if you are going to be using a mortgage, that you go ahead and make contact with your lender before you start pursuing a deal. The rules for condo mortgages continue to change and you'll have more bargaining strength if you're already approved or paying cash. If you were pre-approved more than a couple of months ago, you need to talk to the lender again. Things have changed, yet again.

As of today, the Cocoa Beach MLS is showing 24 closed condo and townhome units in the month of August in Cocoa Beach and Cape Canaveral, well below last year's 39 sold units with nothing closed under $500,00. The number may drift up slightly as tardy listing agents update their listings next week. Hope you have a fun Labor Day. Be safe and close your shutters when you leave.

Homer: Kids... how would you... like to go to... Blocko Land??
Lisa/Bart: Meh.
Homer: But ... the TV gave me the impression that ...
Bart: We said "meh".
Lisa: M-e-h. Meh.

Saturday, August 23, 2008

Notable August Condo Sales

Spotted dolphins playing around the boat in the ocean off Cocoa Beach.

As of this morning, August 23, we have had 18 closed condos in Cocoa Beach and Cape Canaveral in the month of August. Notable sales included:

Lowest price was $59,999 for a small 2/1, Star Beach unit in Cape Canaveral. This unit sold after being listed for only 3 weeks. The seller took 86% of his asking price of $69,900.

The highest price so far this month was $440,000 for a fully furnished, 3rd floor Mystic Vistas unit in the A building with an ocean view. This unit sold in 76 days for 88% of asking price. The selling price was $189,900 less than the seller paid for it in June of 2005.

A 3rd floor corner, direct Banana River 3/2 at Solana River closed for $350,700 after being listed for only 25 days. The seller got 95% of his asking price but sold for $84,300 less than he paid in March of 2005.

A 1725 sq.ft., 3rd floor, 2/2 Shorewood unit with a peek of the ocean sold for $236,000 after being listed five different times for an astounding combined 997 days with an original asking price of $464,900. It closed for 79% of the last asking price but almost double what the sellers paid when it was new in 1996. This is an extreme and costly example of chasing the market down and clinging to unrealistic expectations.

One of the bigger, 2348 sq.ft., Puerto del Rio units with a good river view from the massive, 4th floor wrap- around balcony closed for $233,000 or 78% of the original asking price in January this year. This was $54,000 less than the owner paid new in December 2003.

A Banana Bay townhome in Cocoa Beach sold for $161,000 in just 56 days, 89% of asking price.

And a Portside 1/1 with 943 sq.ft. sold for $92,000, lowest price yet in Portside and $23,900 less than paid for this unit brand new just two years ago.

We've seen four single-family homes close so far this month, all in Cocoa Beach, with waterfront prices from $340,000 to $570,000.

MLS inventory Aug 23, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____742
over $500,000________93
Single family homes___119
over $500,000_________44

If anyone has a particular market segment or subject you'd like covered in a post here, please email me and I'll do my best to accommodate.

"Life is not a matter of holding good cards, but sometimes, playing a poor hand well."
_____________Jack London

Wednesday, August 20, 2008

The little storm that could - UPDATE 2

As I write this, Tropical Storm Fay has been sitting on Central Florida for 18 hours dumping rain and bringing winds in excess of 60 miles per hour. The center of circulation right now is directly over Cocoa Beach as you can see in the radar shot above and forward movement is down to 4 mph, so, we're in for another long, wet and windy day. I did not see any damage on the way in to the office from south Cocoa Beach this morning other than Yen Yen's old rusty sign that appeared to have a new angle of decline. The shot below is from yesterday (Aug. 19) afternoon. The rain and wind have been pretty constant since that shot and conditions are the same now, 9:16 AM Aug. 20.

The forecast track below shows the storm eventually moving out over the Atlantic just north of Cocoa Beach before turning west and bringing excitement to north Florida. In the meantime, school kids in Cocoa Beach got to miss two of the first three days of school and I'm sitting in the office enjoying the sight of empty streets and bending palm trees in the blowing rain out my window daydreaming about tropical weather days in the past.

"Rain showers my spirit and waters my soul."
_____Emily Logan Decens

[Aug. 20 - 5 PM update]

The storm renewed it's assault early in the afternoon and by 2 PM the storm had stalled, the wind had resumed out of the opposite direction at +-50 mph and the storm drains are flowing backwards as the rain continues unabated.

At this point the news channels are claiming upwards of 20 inches of rain so far and another 10 inches possible by tomorrow. The river is up to and over seawalls along all the canal streets and those people with west and south river exposures are experiencing flooding and dock damage. I received a call from a friend on the river in south cocoa Beach with a report of a flooded yard and a loose jet ski banging into the dock. When I got there the waves were crashing over the seawall into the back yard and the jet ski was breaking itself and the dock with each wave. Three of us were able to lasso the thing and winch it over onto the dock without crushing any appendages.

This is the usually dry yard with the jet ski safely tied down, for now.

These are west facing docks on the Banana River in south Cocoa Beach about 4 PM this afternoon, Aug. 20. Ten more inches of rain predicted with diminishing wind. All low areas in the county are now flooded. The bright spot is that we experienced minimal beach erosion and wind damage. At this point it has all been about the historic rainfall amounts.

[UPDATE - Aug. 21]

By dark last night the rising river and persistent southwest winds had some west facing docks in danger and crews were scrambling to shore up seawalls and secure boats.

Noon:Thursday - The rain has stopped and the water is starting to recede although the river may take some time to go down. Kids will likely have to return to school tomorrow after this unplanned three day holiday and I'll return to my normal real estate related postings. As you can imagine, there has not been much activity since Fay first arrived on Monday. Live long and prosper.

Wednesday, August 13, 2008

New waterfront Cocoa Beach homes

If you've been waiting for the market bottom to pick up a new waterfront home in Cocoa Beach for less than $900,000, your list of possibilities has been whittled down to one. Two of the three that were available closed in the last two weeks and there are none under construction. It will likely be some time before someone risks building a spec home of this type again and prices will have to be higher than these last two closed sales for it to be a profitable venture. The never-lived-in house at 1011 Minutemen pictured below closed this week for $570,000 or $146 per square foot. If we take out the value of the land ($300,000) this very nice new house was purchased for around $70 per square foot. Original asking price two years ago when it was completed was $1,250,000. I presented an offer earlier this year more than $100,000 over the eventual selling price. Click here for a slide show of the house.

The other new house to sell was a 5 bedroom 3.5 bath on Esther pictured below. It closed two weeks ago for $580,000. Original asking price in March 2007 was $799,900. Click here for a slide show of that one.

Last remaining new waterfront home in Cocoa Beach asking less than $998,000 is a 2 year old, 4 bedroom, 2.5 bath on Blakey, asking price $549,000. If you must have new construction and are willing to give up the waterfront, you could always go for a 3 bedroom 3 bath, brand new 3495 square foot beauty at the Enclave across the street from the beach with no view for $995,000. Several available.

I'll parse the condo activity in my next post. The inventory at the moment is looking like a picked over bowl of popcorn. The good stuff has been eaten and unpopped kernels (unbending sellers) make up most of what's left.

MLS inventory Aug 16, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____739
over $500,000________92 - 27 sold since New Year's Day
Single family homes___121
over $500,000_________44

" I look at a hundred deals a day. I pick one." Gordon Gekko

Friday, August 08, 2008

Waiting on a foreclosure

Sung to the tune of "Waiting on a friend" by the Rolling Stones.

I constantly get calls and emails from people wanting to pursue foreclosures and short sales in hopes of snagging a great deal. While there have been some outstanding deals in those two categories, there have also been equally outstanding deals in non-distressed properties. For instance, yesterday a big, direct ocean 2/2 condo in south Cocoa Beach was slashed to $219,000. This unit has no garage and the 2nd floor view is somewhat obscured by dune vegetation but at this price it's now priced below most river units of the same size. Someone's going to get the best deal of the year on the ocean here. It's not bank-owned nor is it a short sale. The 4th floor corner 3/2 at Ambassador Shores that closed last month for $235,000 was not a distress sale. Nor was the top floor 2292 sq.ft., 3/2 River Bend that closed for $265,000. My point is that, in your search for a deal, do not limit your search to distressed properties. There are occasional non-distressed properties closing at prices that qualify as "great deals" without the hassles and perils of bank-owned or bank-approved sales.

The numbers are in for July and we dipped below 2007 in total closed condos in Cocoa Beach and Cape Canaveral with a total recorded (as of this morning) of 35 sales. The highest price paid for a condo in July was $850,000 for a 5th floor northeast corner that sold new for $1,035,000 three years ago. A similar haircut was administered at Majestic Seas for a 6th floor southeast corner that closed for $712,500 which is $116,500 less than it's purchase price three years ago. John Edwards would be jealous. We had our busiest month of 2008 in the over $500,000 category with six units closed, two at the Meridian whose outstanding marketing team continues to pull rabbits out of an empty hat.

According to the tax appraiser's site only 12 of the May 17th auction units at Mystic Vistas had closed by July 23, so, I guess the early rumors of 20-something sold were inaccurate. The lowest recorded price was $181,500. I suspect this was the unit that sold for $165,000 with a 10% buyer's premium added. The math works.

If our seasonal trend holds true sales should drop significantly through the end of the year. The chart below shows what we can expect for the rest of the year if we follow 2007. The steep decline after August below looks the same if we chart the previous five years. As a buyer, expect to have more bargaining power during this slow time although you'll be dealing with reduced inventory as many sellers pull their listings off the market until spring. If you're selling, well, I won't repeat my broken-record message. You know the drill. Your time for action is now.

Single-family home sales were brisk in July with 11 closed sales bringing the total closed MLS-listed homes in Cocoa Beach and Cape Canaveral to 60 since January 1, 2008. Current inventory stands at 123. Lowest price, $147,500 and highest, $1.75 million.

Condo inventory is now at 746 with the lowest asking price, $49,000 for a small 1/1 Atlantic Gardens unit in Cape Canaveral, and the highest, $1.95 million for a 5000 sq.ft. new direct river penthouse in south Cocoa Beach. Until next post, be careful out there. There are hungry wolves wearing Time2Buy buttons who would love to eat you for lunch.

"I have known a vast quantity of nonsense talked about bad men not looking you in the face. Don't trust that conventional idea. Dishonesty will stare honesty out of countenance any day in the week, if there is anything to be got by it. "
________Charles Dickens

Thursday, July 31, 2008

Easter Egg in the Housing Bill

Other than the colorful boiled eggs hidden for children at Easter, an easter egg can also be a hidden message in software, DVDs, video games and even books. For instance, to instantly force a win in Windows solitaire, simply press Alt + Shift + 2. Voila, you win. For owners of real estate who sell their primary residence after December 31 this year, the easter egg waiting for them is the new ratio formula for pro-rating the $250,000 per person capital gains exclusion. Until the end of this year, the rule is that one needs to have lived in his home for at least two out of the last five years to qualify for a $250,000 ($500,000 for married couples) capital gains exclusion on the profit in the home.

Four pages from the end of the 694 page, well-intentioned but mainly misguided "Housing and Economic Recovery Act" passed into law this week, the bomb begins with the wording "Subsection (b) of section 121 of the Internal Revenue Code of 1986 (relating to limitations) is amended by adding at the end the following new paragraph:"

What follows, in summary, allows for the amount of tax exclusion to be proportional to the number of days the home was "primary residence" divided by the days the home has been owned. For example, if I've owned a property for the last five years and that property has been my primary residence for the last two years, the impact of the date of sale for me, a married man, will be;

A: sold by Dec. 31, 2008 - up to $500,000 of capital gains will be tax-free

B: sold after Dec. 31, 2008 - up to $200,000 of capital gains will be tax-free

The reality; selling after the last day of this year could cost me up to $45,000 in taxes depending on my total profit from the sale. This is only my interpretation of the wording. I am just a well-read, way-too-involved real estate guy. If you are in a position to be affected by this change, do not trust my take but get thyself to an accountant, tax lawyer or other qualified person and get professional advice. You may profit from notching up your efforts to get your property closed before New Years. The sad reality for most people who have owned for less than five years is that there will likely be no capital gains to protect. Thanks to Dan Green of the Mortgage Reports Blog for bringing the egg to my attention.

July has ended and the sales, as recorded by today, August 2nd, fell behind last July's tepid total. We had a total of 42 closed MLS-listed, residential properties in Cocoa Beach and Cape Canaveral, 11 single-family homes and 31 condos. The bright spot in this otherwise dull month was the view from the buyers' side of the closing table. Someone stole a 4th floor River Bend, 2292 sq.ft. unit for $265,000. A 3250 sq.ft. brand new 5/3.5 canal-front home went for $580,000, less than you could buy the land and build it for. Another older 3/2 canal-front home with dock and boat lift off Minutemen Cswy. sold for $295,000. And, in what will likely go down as the smoking deal of the year, I represented the buyers of a direct-river estate on three quarters of an acre of direct wide open river with over 130' of waterfront with dock, boat lift and massive riverside tiki bar (pictured above) with lush mature landscaping, across the street from the beach. Listed last year for $1.9 million and closed in July for $670,000.

I count 135 condo listings this morning in the Cocoa Beach and Cape Canaveral MLS that have been listed for longer than a year. Add the other listings whose "days on market" number has been manipulated and the newer but severely over-priced ones and we have a lot of sellers who have yet to face the reality of the changed market. I can't say this enough; if your neighbor just sold his identical unit for $100,000 less than you're asking, your unit is not really for sale. His motivations for selling DO affect your property's value whether you share his circumstances or not. Either face that reality and price your property accordingly or pull the For Sale sign out of the yard. The stress of waiting for that rare buyer who is willing to overpay for your place is not worth it.

I would also offer another piece of advice. Choosing to get a renter while waiting for the market recovery has, so far, been an expensive decision. With the exception of a few weekly rental oceanfront condos, almost no property purchased in the last five years can generate enough rent to cover expenses. Add the chances of repairs, assessments, depreciation and lost opportunity and the decision to rent could cost far more than just cutting the price now to a level that will generate a sale. I feel for you if you're in this position but you need to rationally evaluate your choices. The right decision is often the more difficult one.

Until next post, I'm enjoying the glorious sunrises of the last two weeks and the daily afternoon thunderstorms. Cocoa Beach has been exceptionally beautiful this summer and we're approaching my favorite time of year, that magic period between Labor Day and Christmas when the weather has cooled, the fish are biting, the surf is good and the roads and beaches are deserted. If you've never experienced our town during this time, plan a visit. Rentals are discounted and you'll have the run of the place along with a few locals.

Give me things that don't get lost.
Like a coin that won't get tossed.
_______Neil Young's "Old Man"

Sunday, July 27, 2008

Surprise, surprise

Here we go, again. After the passage of Amendment One, the property tax relief bill supported by the Florida Association of Realtors among others, there was wide speculation that individual cities and counties would increase millage rates to make up for the lost revenue. Orlando appears to be among the first to float that idea. In last Tuesday's Council meeting the majority of members stated their support for a 21% increase in the millage rate to make up for the $30 million budget gap that resulted from the passage of Amendment 1. Most of us who opposed Amendment 1 did so because we doubted the willingness or ability of the bureaucracy to reduce spending and expected offsetting higher millage rates in the wake of successful passage. I don't have a solution but slashing taxes at the state level without a solution for replacing the revenue doesn't seem well thought out.

Now, the same groups are pushing for support of Amendment 5 or, as they are calling it, "Amendment 1 on steroids". As before, the Florida Association of Realtors supports slashing property taxes because they believe that will increase sales activity, which is, naturally, their primary concern. And, as before, they have no solution for replacing the lost revenue other than a one cent increase in the sales tax which will still leave an $8 billion with a "B" shortfall. As a dues paying member of both the Florida Association of Realtors and the National Association of Realtors, I am embarrassed by their wasteful, self-serving campaigns ranging from NAR spending $30 million in 2006 and 2007 to tell the public that "Now is a great time to buy" and the current $1 million campaign by FAR to entice the public into supporting a bill that is likely to backfire just like Amendment 1 is now beginning to do. For the record, if it's not clear from the above, I oppose this half-baked idea to reduce property taxes. I support lower taxes but this just ain't the solution.

"Prices have stabilized and are starting to rise."
___November 2006 - National Association of Realtors ad, NY Times

"I triple guarantee you, there are no American soldiers in Baghdad."

Thursday, July 24, 2008

The Sweet Smell of Summer

One of the sweet smells of summer in Cocoa Beach, frangipani (aka plumeria).

As of today, the 24th of July, we appear to be on track to closely mirror last year's sales for the month of July in Cocoa Beach and Cape Canaveral. For the last five years, sales have peaked between April and June and then trended down to the lows of the year between October and January. Typically the number of closings falls off the cliff in October reflecting September's abrupt drop in sales activity and doesn't recover until February. I expect the same for this year.

Recent sales of note include a 4th floor, direct river 2/2 at Four Seasons in Cocoa Beach for $185,000 and a 5th floor, direct river 2/2 at Sunset Harbor that sold for $165,000. Best oceanfront deal of the month was a 4th floor, north corner 3/2 Ambassador Shores unit that I was able to negotiate on behalf of a buyer for $235,000. Unfortunately, our contract was taken away by another owner in the first right of refusal process that is in place at that building. We have had two $500,000+ units close so far this month, one of them a new unit at Meridian on the ocean. Of the 21 MLS-listed condos to close so far this year for over a half million dollars, nine have been at Meridian. I hope the buyers agents are doing the right thing and disclosing in advance and sharing with their buyers the excessive commissions being paid to them by the developer. Long-time readers of this blog know my stance on agent incentives. The practice reeks like shrimp heads in a hot dumpster. If you never read my first posts on the subject you can read them here.

Single-family home sales have been tepid with only three closed sales so far this month. One was a small but very cute 2/1 home with a pool one block from the ocean and 1/2 block from the river in south Cocoa Beach that went for $195,000. There are pending deals set to close soon that will cause some teeth-gnashing and rending of garments. I will report on them as they close.

As of yesterday, ten of the developer's auctioned units from the May 17 auction at Mystic Vistas in Cape Canaveral have been recorded on the property appraiser's site for prices ranging from $181,500 to $275,000. These were all new units from 1686 to 2059 sq.ft.

From "This week (July 17-23), 70 percent of the panelists believe mortgage rates will rise over the next 35 to 45 days."

MLS inventory July 24, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____753
over $500,000________95 - 21 sold since New Year's Day
Single family homes___125
over $500,000_________44

For those of you waiting for an outstanding deal, the pickings are slim. There have been very few priced-right new listings in the last few months and the ones that have appeared have been quickly snapped up. Be ready to pounce if you want to steal something and don't rely on the tardy listings at some of the popular real estate web sites. Your buyer's agent, if she's good, is your best weapon for early notice of hot listings. Justify your low offers with comps and/or well articulated reasons for a better chance at success.

"Honesty is never seen sitting astride the fence."
_____________Lemuel K. Washburn

Tuesday, July 15, 2008

Whoa....Déjà Vu

As a buyer's agent I don't pursue listings and usually suggest another agent that I trust (it's a short list) for listing inquiries depending on the location of the property. I have made an exception for the building above. I have history in this landmark downtown Cocoa Beach location and thought that the connection I have with the property made for a harmonious fit. I owned a business that operated out of this building back in 1992, hence the déjà vu title (a quote from Neo, by the way). Since I moved a series of tenants including Munson Surfboards, Da Kine Diegos restaurant and, most recently, Beach Culture Surf Art have occupied the space. It picked up the Rick Piper mural across the front a few years back and is now for sale for the first time in years. For someone interested in a commercial property 2 blocks from the beach and walking distance from the two dozen or so restaurants and bars in downtown Cocoa Beach, this could be it. Offered for $199,900. Email me if you'd like to know more. If you'd even consider painting over the mural, it probably isn't for you.

"Every child is an artist. The problem is how to remain an artist once he grows up."
__________Pablo Picasso

Monday, July 14, 2008

July 14 Update

I grabbed the frame above from the Cocoa Beach Pier cam just a few minutes ago of a few guys catching the last few sets of the Hurricane Bertha swell.

MLS inventory July 14, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____758
over $500,000________99 - 18 sold since New Year's Day
Single family homes___127
over $500,000_________47

Deals of note

New 1702 sq.ft., 3/2.5 Sea Spray townhome in Cape Canaveral,
______closed last week for $155,000

Third floor side ocean view Chateau 2/2 - weekly rentals
______closed for $215,000

Direct ocean 3/2, 1548 sq.ft. in a 4-unit building in south Cocoa Beach
______closed for $335,000

There's something happenin' here
What it is ain't exactly clear
________Stephen Stills