Monday, March 21, 2011

March halftime report

The reason for all the boats just off the
beach this past couple of weeks.

March has outdone itself this year in Cocoa Beach. The weather has been glorious with cloudless skies, light winds and temps in the 70s and 80s. The crowd seems to be bigger than in recent years. In addition to spring breakers and youth baseball teams there seem to be more snowbirds than usual, not surprising considering the Canadian dollar is worth more than the US greenback and approaching an all time high. The cold winter up north didn't hurt either.

The cobia run has been the best in years. We've had several years of windy March weather spoiling the fishing for this tasty fish as their annual migration takes them past our coast. This year the planets aligned and we had light winds, no clouds and the fish were here en masse. I broke my personal record last Wednesday with a 45.3 pound fish on 15 pound line and then broke it again on Friday with a 47.3 pound fish on the same 15 pound rig. There is a perpetual bowl of fresh cobia ceviche in my fridge.

Sales of condos and townhomes in Cocoa Beach and Cape Canaveral have backed off somewhat from the strong pace of January and February. The low inventory numbers and the quality of that inventory is starting to be felt. The trend of activity being focused in the lower price ranges is intact. Only five of the 24 closed MLS condo sales so far in the month exceeded $200,000. Single family homes sales are still strong with reasonably priced homes moving quickly once they hit the market. Like condos, the activity has been focused in the low prices with seven homes closed so far in March at prices from $100,000 to $282,500.

Sales of note of the 31 closed so far included:

A small 4/2 canal home in Cocoa Beach that had some updating and a new dock and seawall. Was not a short sale and closed for $282,500.

A foreclosed non-waterfront 3/2 pool home in Cocoa Beach that needed work sold for $100,000.

A nicely maintained non-waterfront 4/2 pool home in the area of Cocoa Beach north of 520 sold for $239,000.

A very nice 4th floor 3/2 direct ocean unit in the nine year old Artesia building in Cape Canaveral closed for $510,000. One car garage and 1924 square feet.

Another super nice direct ocean unit sold at Majestic Seas. This one was 2nd floor, 1924 square feet, 3/2 with one car garage and closed for $370,000. Almost everything in this unit was new including hurricane sliding doors. A great deal in my opinion.

One of my clients scored a beautiful six year old, 3/3, direct Banana River Solana River after watching and waiting for over two years for one of these rare floor plans at the right price. This 4th floor corner unit sold new in 2005 for $499,900. Sold this time fully and tastefully furnished for $288,000, a smoking deal.

A north facing 2/2 Shorewood in Cape Canaveral sold for $230,000. This one had 1862 square feet and a one car garage.

A 3 year old fee simple townhome (no association) one block from the ocean in Cape Canaveral closed for $210,000. This very nice unit had 3 bedrooms, 3.5 baths, a 2 car garage and 2143 square feet. Another good deal.

A 2/2 north facing Coral Sands in south Cocoa Beach with 1525 square feet and garage sold for $175,000 fully furnished.

A 2nd floor canalfront at Beachwalk of Cocoa Beach sold for $173,500. Had a deeded 25' boat slip and private garage.

A side ocean view Driftwood of Cocoa Beach closed for $167,000. It was a 2nd floor, 2/2 fully furnished without a garage.

A ground floor direct ocean Canaveral Sands 2/2 closed for $155,000. No view because of the dune vegetation. Had a one car garage.

At Harbor Isles in Cocoa Beach another lakefront ground floor 2/2 closed. This one had a private garage and sold for $115,000.

The developer of Royal Mansion sold his last remaining unit after slowly parceling these out over the years while raking in the vacation rental income. It was a south facing 2nd floor, nicely furnished and went for a surprising $96,000. Not bad for a unit that rents for up to $1100 per week.

A foreclosed top floor Treasure Island 2/2 on the Banana River closed for $92,000. No garage.

Another Diplomat of Cocoa Beach 2/1 has sold. This one was ground floor and in the middle of a remodel that needed completion. Sold for $79,000. No garage. Two week minimum rental in this very popular oceanfront complex.

A tiny 1/1 Essex House on the river in Cocoa Beach sold as a short sale for $29,900.

One observation; I am seeing multiple offers on many listings, especially on foreclosures but also on aggressively-priced non-distressed listings. If offering, be aware of current trends and be prepared to move when an attractive target presents itself, AND, do your homework. The average discount to asking price of the 31 closed properties in March was 9.87%.

George Castanza - I'll sniff out a deal. I have a sixth sense.
Jerry - Cheapness is not a sense.

Sunday, March 06, 2011

Inventory dynamics

Someone asked about inventory levels. Inventory shrinkage continues fueled by the high number of sales and the lower than usual number of new listings. MLS condo and townhome inventory this morning in Cocoa Beach and Cape Canaveral is at 452 units, it's lowest point since I began tracking this number in May of 2006. That translates to just slightly more than a 10 month supply at current sales levels (most recent 4 month average). Is that a big deal? You decide.

One year ago, March 2010, using the same formula (inventory over average sales rate) we had a twenty month supply. One year earlier, in March 2009, we had a whopping 35 month supply of condo inventory. Our supply has been cut by two thirds in two years. The effects are being felt.

As has been the case for the last several years the inventory over burn rate number is higher for luxury units, more than double using the same formula as above but realistically even higher than that because of erratic closings and unlisted but available units in troubled complexes. With those fundamentals I think it's safe to expect to continue to see price erosion in the luxury segment. Lower supply and higher demand would seem to predict another scenario in the mid and lower price ranges.

"I have an existential map. It has 'You are here.' written all over it."
___Steven Wright

Thursday, March 03, 2011

February wrap-up

The red-hot sales trend in Cocoa Beach and Cape Canaveral held firm through the month of February bringing the total closed MLS-listed condo sales for the first two months of the year to 76 units, a 5 year high. Single family home sales were also strong with eleven homes closed in February. In a departure from our normal pattern, none of the 33 condo sales in February exceeded $300,000. Two of the single family homes were above the half-million dollar mark.

Condo sales of note included:

Stonewood B building direct ocean 12th floor, 3 bedroom, 2 bath w/garage, 1588 square feet. Sold for $298,000 just $2000 less than asking price in 21 days on the market.

Six year old top floor Puerto del Rio of Cape Canaveral 3/2 with 2434 square feet, garage and massive wrap balcony with wide open river views. Closed for $285,000.

Foreclosed, 4th floor side ocean view Majestic Seas Cocoa Beach 3/2.5 with 2100 square feet and garage. Sold for $265,000 after 41 days on the market.

Third floor 3/2 Solana Lake of Cape Canaveral with 1956 square feet and garage. $260,000.

Short sale fully furnished and nicely remodeled Canaveral Towers direct ocean 7th floor, 3/2 with 1417 square feet and 2 ocean balconies, open parking. A deal at $250,000 in this weekly rental building.

Nicely furnished and remodeled, top floor, direct ocean Waters Edge 2/2 in south Cocoa Beach with garage, 1350 square feet. Closed for $250,000.

Seven year old Bayport villa in Cape Canaveral. This one had a 2 car garage, 4 bedrooms, 2 baths and 1696 square feet. Sold for $235,000 after 25 days on the market.

Foreclosed top floor (7th) Windward East of Cocoa Beach south ocean view 2 BR, 2 BA with garage and 1316 square feet. Closed for $200,200.

Top floor (5th) Shorewood D building 2/2 with a tiny peek of the ocean. One car garage and 1663 square feet. Sold fully furnished for $200,000 in 34 days on the market.

A lakefront 3/2 Rock Pointe of Cocoa Beach with 2149 square feet and garage closed for $189,500.

Fourth floor south ocean view C building at Royale Towers in Cocoa Beach. It had 1256 square feet with garage and closed as a short sale for $165,000.

Another Solana Lake 2nd floor 2/2 with 1828 square feet and garage sold for $160,000. It was a foreclosure. Sold in 2005 for $364,500.

A first floor direct canal Captains Cove in Cocoa Beach sold for $143,000. It had 3 bedrooms, 2 baths, 1841 square feet, deeded boat slip with boat lift and garage. Was a foreclosure and sold in 40 days on the market.

Three units closed in the month at Summerwind of Cocoa Beach (streetside across from the Publix supermarket). A fully furnished south view (distant peek of the ocean) 3rd floor, 2/2 closed for $140,000 with 1400 square feet and garage. The other two were a 4th floor, 1200 square feet, east facing that closed for $123,000 after only 15 days on the market and another 3rd floor, this one north facing with 12oo square feet that closed for $120,000.

A short sale 3rd floor 2/2 Siesta del Mar in Cape Canaveral sold as a short sale after a grueling 494 days on the market for $135,000. Was a south ocean view with a garage.

A foreclosed Majestic Bay townhome in Cape Canaveral closed for $110,000. This six year old 3/2 had 1783 square feet and a 2 car garage. Sold in 2006 for $280,000.

One of my favorites was a 1/1 unit in a small (6 units) oceanfront building in south Cocoa Beach that allows weekly rentals that sold for $70,000.

Rounding out the condo and townhouse sales were assorted units in Ocean Woods, Four Seasons, Canaveral Bay, The Oaks, Star Beach, Ocean Park and others at prices between $100,000 and $20,000.

Single family home sales of note included:

Two direct ocean homes closed in the month. A neglected trophy home in south Cocoa Beach sold for $600,000. This once majestic 4239 square foot home has two stories with 6 bedrooms, 3.5 baths, 2 car garage on .34 acres lot with huge decks on 75' of ocean. Is going to need a ton of work.

Another was a short sale just south of downtown Cocoa Beach. This one had a guest house and a total of 2177 square feet. Was originally built in 1946 on 50' of Atlantic Ocean and was first listed in December 2008 for $1.1 MM. Closed last week for $560,000.

Four non-ocean Cocoa Beach waterfront homes sold for prices from $337,500 for a funky open river 3/2 on Jack Drive to $232,500 for a canal front 4/2 on Chipola that needed work.

Five non-waterfront houses closed at prices from $225,000 for a short sale, original condition 3/2 on the Cocoa Beach Country Club golf course to $112,500 for a 2/2 half-duplex two blocks from the beach in Cape Canaveral.

The cobia showed up in decent numbers last week following the giant manta rays up the coast in their annual migration. While the ocean was calm last weekend most boats were catching their limit of 2 fish per angler. Fish up to 75 pounds were caught. The wind cranked up Monday and it's been unfishable ever since.

"God loved the birds and invented trees. Man loved the birds and invented cages."
___Jacques Deval

Tuesday, March 01, 2011

Your tenant is costing you a fortune

This post is directed to sellers who are hoping to sell a property that is occupied by a tenant. I understand that you may think the rental income helps defray your costs while waiting for a buyer. What you may not know is that your tenant is, in almost all cases, adding friction to the sales process. It doesn't take many showings and the need to keep the property always show-ready to harden even the most co-operative tenant. On the easy end of the scale, tenant-occupied properties that I call to show only require an extra phone call and an appointment to show. At the other end of the scale I've encountered tenants who restrict showings to unreasonable hours or who seem to always say that today isn't a good day. There was even one condo tenant who changed the locks so that the listing agent's key wouldn't open the door. I do everything I can to show every suitable property to my clients but sometimes the buyers' schedule and the tenant's resistance preclude a showing and possibly a sale.

Whatever the impediments the tenant produces, this friction reduces showings and, worst case, can prevent a sale. At the very least, reduced showings prolong the selling process. If you are trying to sell a tenant occupied property it would be constructive to monitor the difficulty showing agents are encountering and determine for yourself whether or not the rental income offsets the possible delay or prevention of a sale. Oh, yeah. You'll also want to occasionally call your listing agent, especially on weekends. If she isn't answering or returning calls, that difficult tenant probably doesn't matter.

"Did you ever walk into a room and forget why you walked in? I think that is how dogs spend their lives."
____Sue Murphy