Friday, October 31, 2008

It IS Different Here!

There is a long list of thought-terminating real estate clich├ęs 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