Just in case we didn't notice that a new year had begun, Mother Nature delivered a wake-up call in the form of a cold snap to the 30s with howling cold winds on January 2, 2008. As I sit here shivering on January 3rd, the radar is showing snow flurries off the coast east of Daytona Beach. This after the last week of 2007 hovered in the mid 70s with calm, beautiful, beach-lounging conditions.
2007 was a year of major changes in our real estate market. The mortgage market was forever changed in August when the sub-prime nastiness boiled over and, for a brief time beginning August 3rd, over a dozen major lenders temporarily suspended funding. We ended the year with over 200 lenders no longer in business and lending standards tighter than ever. In spite of the drama, deals continued at a steady but slowed pace.
All stats here are from the MLS. Total sales will be slightly higher when private sales are factored in.
Single family home sales in Cocoa Beach and Cape Canaveral were actually higher with 70 closed sales in 2007 compared to 69 in 2006. The highest selling price of a single family home as recorded in the MLS for the year was $1.82 million for a 6724 sq.ft. beauty on the open river at River Falls in south Cocoa Beach. Only 4 single family sales over a million were reported with none in Cape Canaveral. Two of the four sales were in River Falls. There were six sales of single family homes under $200,000 in the year. Median price was $319,000.
Condo sales were weaker for the year in the Cocoa Beach and Cape Canaveral market with 385 closed units compared to 476 in 2006. The highest selling price of a condo unit for the year was $1.875 million for a fully-furnished, 4617 sq.ft. unit occupying the entire top floor of Ocean Estates condo in Cape Canaveral. We had 4 total sales of condos for $1 million or more. There were 8 condo sales under $100,000 and the median selling price was $239,000. There were 42 sales of condos over $500,000 and inventory in that troubled segment of the market is at 126 this morning, exactly a 3 year supply at last year's sales rate. The under-$500,000 supply of 690 represents a 2 year supply at 2007's rate of sales.
We had a burst of condo sales in our office at the close of the year and prices of all those deals broke new ground to the downside. Expect to see shocking low selling prices in the next few months as the weaker sellers are picked off. I will venture a small prediction here for 2008. I think selling prices in the short-term rental condos are close to a resistance point (I like that description better than "bottom" but the idea is the same). My reasoning is that, with the much higher incomes of weekly rentals, these units' owners will have less pressure to sell for give-away prices. Income equals staying power. I think this area of our market represents the most opportunity in 2008 for exactly that reason; income. In all other areas I expect more price deterioration although probably not to the extent that we saw in the last half of 2007. I also expect a reckoning of some sort with the dozens of unsold new luxury condos that are sprinkled throughout our community. There are a handful of developments that are in limbo with no action for months. It seems likely that major price reductions will be necessary to move the supply that has been languishing for months. We'll see.
Favorite posts of the year.
I got more mail, calls and comments about a particular post this year than at any other time in the almost 3 years that I've been doing this blog. That post was the tongue-in-cheek "If Condos Were Watermelons" entry from September of this year. I think the supposition that condos are a commodity clicked for a lot of people. Other favorites were "Reality Check 101" and "Reality Check Part 2" My personal favorite of the year was the photo essay "Seven Reasons for Cocoa Beach in February" That one was the most linked-to post of the year as best I can tell.
2008 has begun in much the same fashion as 2007 ended, with outstanding deals. The first 2 closings of the year both lowered comps in their respective complexes. The first was a 4th floor, 1316 sq.ft. direct river, 2/2 at Four Seasons that closed for $220,000. Deal number two, in which I represented the buyer, was a 5th floor, 2/2 at Chateau by the Sea for $255,000. These sellers were asking $405,000 for this Chateau unit in the summer of 2006. That popular tactic of sellers in 2007, waiting out the market, did not pay off in this instance.
Happy New Year all. Stay tuned. This promises to be an interesting year.