Grounded sailboat at Jetty Park, Port Canaveral.
Photo by Lauren Lulich.
In the month of August twelve single family homes closed in Cocoa Beach as reported by our MLS. Median price was $315,000, and all but three were waterfront, two of those oceanfront. There was one reported single family home sale in Cape Canaveral but it was actually a half-duplex. Prices ranged from $681,000 for a short sale 5 year old Snug Harbor home on Edwards Bay to $239,000 for a non-waterfront 3/2 with a 3 car garage on Esther. Another of the twelve Enclave homes in Cocoa Beach closed in the month making five this year. This one sold for $490,000, a far cry from the original million dollar plus asking. Two of the 12 August sales were short sales and none were foreclosures making a total of 17% of home sales distressed. Seven of the buyers paid cash.
August was a record month for condo sales with a total of 57 MLS-listed units closing in the two cities. None sold for more than $500,000. Median price was $133,500. A whopping 79% (45 units) of the 57 total sold for less than $200,000. The former bread and butter of our market, direct ocean units, made up only 14% of the activity (eight units) a reflection of one of the most heavily impacted parts of our depleted inventory. Eight of the total were foreclosures and ten were short sales making 32% of the total condo sales distressed. Highest price paid of the 18 distressed sales was $203,000. Forty three or 75% of the total of the buyers paid cash. The average sale was for 91% of the last asking price.
Inventory this morning, September 12, 2011 is at it lowest point in my memory. There are 353 total condo and townhome units for sale in Cocoa Beach and Cape Canaveral and 74 single family homes. Of these 427 residential units for sale, eleven are foreclosures and 56 are short sales making 16% of the total distressed, well off the recent crazy high percentage.
We are now in the sweet season with the summer crowds gone and snowbirds yet to arrive. What little traffic there is is just blissful locals with surfboards and fishing rods hanging out of our vehicles. There is surf most days, the water is warm, the air not so much and the mullet run is in full swing. If you've never visited Cocoa Beach in September or October you have missed the best time of year.
Many men go fishing all of their lives without knowing that it is not fish they are after. __Henry David Thoreau
This really has nothing to do with your above post but is a question that many pet owners might be asking.I realize condo associations need rules--I would more appropriately call them guide lines -- but in my mind I do not believe these associations have the right to limit pets to a certain weight.I have a Labradoodle that is 46 pounds. She is quiet and well mannered.She is gentle with everyone and has been recommended as a therapy dog for hospitals and elder care facilities.I can't say that about some dogs large or SMALL. So why the strict RULES. Why not judge the companion by its actions rather than a prejudice view.I could make the case that the practice is in fact illegal.
ReplyDeleteUsing objective criteria like weight protects the condo association from any charges of discrimination. You can't have a subjective rule like "the dog has to be well mannered" Who is the arbiter of what "well mannered" means?
ReplyDeleteI think you'd be hard pressed to make a case that it's illegal since when you buy the condo you're agreeing to be governed by its rules.
Snowman
ReplyDeleteI'm ashamed of you. You must know by now that this is America and we must have rules and laws covering everything, even if they do not address what the problem is. Anonymous, on the other hand, has it figured out. Obviously, the sole purpose of the objective criteria and the rule, is to protect the association from charges, not to protect the residents from any annoyance. We all know how much more pleasing it is to experience the bite or endless bark of a 39 pound dog than a 41 pound dog. Lowell Fundum once said, "If creating a law which applies to a situation is illegal, create one that doesn't and convince everyone it does."
Remember that as soon as you close on that condo, you have allowed this mentality to have their hand in your pocket. The folks who make these rules are now your voting neighbors who are controlling the future of your investment. Think about the cost of maintaining the infrastructure of one of these 35 year old buildings. Maybe the banks aren't as dumb as we think they are. Are you ready to trust the fate of your cash purchase to this level of " government"?
Have to disagree. You either open the door to all pet owners or you don't. The criteria of weight being a factor is in itself discrimination.I do agree with "you can't have a subjective rule like the dog has to be well mannered" case in point--"you can't have a dog over a certain weight".Exacty the same thing.I have to wonder how many pet owners would enter the condo market if Spike were allowed as well as Fifi.
ReplyDeleteOverweight dogs as a protected class under the Americans With Disabilities Act? I'm sure you could find a lawyer to take up that cause in a suit against an association!
ReplyDeleteI think we agree, Snowman. My point is that the dog issue is only one small part of the picture. Once you buy the condo you become committed to funding the desires or whims of the majority of your neighbors, or non-resident owners. So, if someone challenges the Fido rule, you will be on the hook for a portion of the legal fees defending the keep Fido out rule.
ReplyDeleteI've spent a lot of time looking at condo living in the CCB area. I'll admit that I have been very attracted it. I've also lived a long time in a single family home in a community with a home owners association. I've seen over and over just how bad the democratic process here can run amuck with minimal infrastructure to keep up. I'm amazed the system in CCB has worked as well as it has so far, but the thought of handing a blank check to my neighbors, to do with as they see fit, just isn't my thing.
Give me a quarter acre with some grass or rocks between the house and a fence that is 6 inches higher than my neighbor is tall. I figure $500 a month should cover upkeep etc. If I want to see the ocean I can always ride over to take a look then come back to jump in the pool that only I swim in, throw a steak on the grill that only I cook on and be only steps away from a fridge full of cool beverages. Oh, and if Fido gains a few pounds, he won't be homeless.
TommyFudster says....
ReplyDeleteI like single family homes too but if you want to leave FL from mid May through mid October for cooler pastures in the north or west, or some variation of that scheme, condos have a lot to offer.
All owners share in condo HOA fees and most owners want to keep them down as low HOA fees enhance the sellability of units and most owners have budgets anyway. There is no blank check. A bigger problem is dead beat owners.
Also, you won't find a single family home in CCB or any other coastal area of FL for $500/month upkeep. Heck, your homeowners insurance will be $300/month or more and property taxes will be $500/month. It will cost you $100/month to maintain that pool. I haven't even gotten to yard maintenance, repairs, garbage collection, water, sewer, cable TV, telephone and the like.
Don't let Fido or Kitty rule your life!
(disclaimer - I am a condo owner and on the BOD)
I new we agreed--I like the tongue in cheek approach.Onward to the next post----Don't get me going on HOA's--that's my pet peeve--HOA's should reflect the downturn in overall property value.They don't. Those fee's have actually gone up.P.T. Barnum said it best--there's a sucker born every minute. Talk about the magicians allusive hand in the pocket.
ReplyDeleteMr. Fudster
ReplyDeleteI certainly did not want to imply that one dwelling type is right for everyone. My discussion with Snowman was directed at his interest in filing suit over the pet issue. The point is that any attempt to change the rules of a small government, which a condo association is, will result in a cost to all, including yourself.
At the risk of escalating the heat level of this discussion I'd like to offer a commentary on some of the facts you offer as a member of a condo BOD. Although I am not an expert on HOAs or Condo Associations, I can offer my perspective on the greatest hazards they face after having spent 35+ years living with one.
You are right on with the dead beat owners. Foreclosures, short sales and other financial transfers also play a role in the financial security of the association. I believe even greater dangers to association solvency are; ignoring inflation, using flawed cost assumptions, failure to escrow for infrastructure aging or keeping current assessments artificially low. There is no substitute for facing where you stand, where you are going and what it will take to get there, Most associations either don't have the time or dedication necessary to put together all of these pieces with the accuracy required. A dangerous man is one who does not know how much he does not know.
When I tossed out the $500 a month figure, I was simply using my understanding of assessments to come up with a ball park figure for comparison purposes. As a board member of one of the condos, I'm sure your figures, assumptions and assertions are accurate from your understanding, although they are a bit contrary to what I thought I understood. As an example, I didn't know that the condo fee covered the normal interior unit insurance as well as the exterior as the $300 would in a single family. So, for accuracy purposes that $300 figure would need downward adjustment for the extra cost of coverage you pay for fire, liability, water damage, etc? I thought repairs were another thing where coverage was split. Aren't repairs within a unit the responsibility of the owner? When your AC quits on a Sunday the association picks up the bill? Why did you throw in the property taxes? Surely they aren't covered by the assessment. Telephone? Really? Never knew that.
Darn, Tommy ! I sure hope you don't take this the wrong way. The research I did leading me to my decision about condo living, eventually centered around those who I found were willing to serve on the boards. Most, like you, live elsewhere for 7/12 of the time. Most, like you, are prepared to support their position with data which is only 30% accurate. Not the credentials needed to run my railroad.
My purpose is not to convince anyone that my findings have lead me to what is best for all. I only offer what I offer because I was so shocked at what I found. I never imagined I would find so many boards who appeared to have no idea what was happening.
Wasn't one of Larry's posts about the association which ended up owning one of units but didn't know it? That was enough for me to decide I needed to know a lot more before planking down a few hundred K.
I'm a dog lover, and on my last trip to Cocoa Beach, I passed an owner walking a dog on a leash near the beach. I had seen the owner and dog several times that week - this was their "route." I then passed some dog doo doo (if you will) in the middle of the sidewalk (on a broiling day) that had to have come from that dog. Quite honestly, I'd support the rule for no pets in a condo - inconsiderate owners bring it upon themselves (and I'm not suggesting that you are one of them - but there are plenty out there).
ReplyDeleteAnonymous II
TommyFudster says …
ReplyDeleteSorry, I misunderstood or misinterpreted what your $500/month figure represented.
The accuracy of data depends on the specific set of facts (or specific condo) the data was obtained from. The numbers I used were based on what I know as I own both an ocean front condo and a river front single family house in the area. At the moment I am living in the condo almost 100% of the time but plan to travel 5 months out of the year starting next year. It is not easy to do an apple to apples comparison between the costs of the condo versus the house due to the condo being a newer (last 7 years) 3000+ sq foot unit and the house being almost 50+ years old and only 2000 sq ft. But I can tell you without a doubt, the $650/mo maintenance fee paid for the condo is competitive compared to what I paid monthly for same services for the house when I was living there. I am still paying $300 mo for HO insurance on the house (although I am considering dropping the insurance) so that figure is dead on. I pay about $65/month for condo insurance to cover the inside of my unit.
BTW, the costs of maintaining the single family house did not go down due to the poor economy which refutes Snowman’s assertion that condo HOA fees should be going down. Unfortunately, the state of FL is still legally permitting the insurance companies to rape its citizens. Sink holes anyone???
Repairs to condo AC compressors are an owner responsibility and on the ocean, the compressors don’t last long. But this situation is no different than single family housing. If your compressor goes, you are on the hook for it.
In defense of condo BODs, most condos now have management companies that do most the detailed work. The BOD members might not know the detail of each HOA expenditure but they do know owners want their HOA fees to be kept low and give their management company the message loud and clear. As I said, there are no blank checks. In older buildings, there will be assessments and even newer buildings have small assessments sometimes.
Larry does a good job of identifying some of the potential pitfalls in buying a condo and in condo ownership but keep this in perspective. Due to the great recession, a lot of things happened that had never been experienced before. Because one condo HOA ended up owning a unit and I am not sure they did do so, don’t expect that to happen at every condo HOA. Also, be aware that as Larry reported, state laws have changed to be more protective of HOA’s.
As Larry has continually advised, you need to do your due diligence prior to submitting an offer on a unit. If you retain a good buyer’s realtor like Larry, he/she can help you through the minefields.
The cost to replicate a property has fallen dramatically across the country. The reason---contractors have no work. Bidding is rampant to the point of low balling the competition.If the property was worth $300k in 2007 and worth $100k today--YA THINK the replacement cost should be equal to price revision---You bet your sweet bippy it should.When something isn't right such as steadfast or rising HOA fee's during the worst recession since "the big one" people have to speak up and be heard.Everyone and everything has taken a hit--but not the Holy Grail HOAs that could be construed as cash cows for the insurance companies.If you don't believe it--I have a bridge for sale in Brooklyn.Wanna buy it--top dollar only sir.
ReplyDeleteThere is a simple solution. Don't buy a condo. With all of your objections and criticisms of condo living, you'd never be happy in one. A single family home will give you the freedom to make your own rules and fund your budget as you see fit.
ReplyDeleteSorry if I pushed your button Larry. My goal was to trigger a response from more BODs than the one. Was hoping for spirited responses from BODs telling how they keep management companies honest or how reserve levels are established and why. I leave it to the readers to reach their own conclusions after reading this one response.
ReplyDeleteMy response was directed at the snowman for whom, judging from his comments, condo living would be a frustrating experience. For others who want or need the benefits of condo living and understand and can live with the compromises, it makes perfect sense.
ReplyDeleteLarry
ReplyDeleteMLS says they are CONDO listings but they are really UNIT listings with "some" condo restrictions and details. The listing details a lot about the unit, but little about the financial condition of the CONDO you are buying, until you make an offer. I'd think it would be in the best interest of the unit owners who want to keep their monthly payments low to promote why this puts their CONDO in a position superior to one which does not. It's difficult to argue with the recent numbers, but who knows how many were buying UNITS and not CONDOs. Easy to fix in a rising market, but not so good in a market when things turn down. I suspect values fall quickly when there are special assessments, so the secret BOD keeps the secrets at the demands of the unit owners. The state of Florida should have laws in place requiring multi unit dwellings to have financial plans in place covering 20 to 30 years in the future. These plans should be available to the public.
Is this like offering a stock sale without revealing the BOD or financials of the corporation?
One has to question the status quo. This country was built on that perception.If being a pacifist is your demeanor so be it--I respect that.Just respect the fact not everyone allows the meek and mild approach to change. My criticisms are nothing more than those questions that the majority won't ask.My objections are probably the result of the head in the sand approach that allows a few to decide the fate of many.Frustrated--no--life's to short for that.To many fall into the Three Wise Monkeys Of Nippon trove "Speak,See and Hear"no evil.I wonder what language we would be speaking if we followed that path.
ReplyDeleteIt is like a stock sale, but the company in question is a private company so it's financials and other details of it's business are not published for the world to see. In those cases, the parties participate in preliminary negotiations and, when they're both satisfied that they want to explore a potential transaction further, NDAs are signed and the target company opens up its books and records for full due diligence by the prospective buyer.
ReplyDeleteIn the case of a condo, as a prospective buyer you're entitled to complete disclosure of the financial status of the HOA before you're obligated to purchase the unit. They're not going to publish it with the listing since that would disclose the information to more people than those who actually need to know it.
I don't think the State of Florida should have any laws like what you describe, each building is free to govern its affairs in the manner it chooses, no reason for government to dictate how ofter elevators are replaced, etc. There's more than enough government regulation as it is.
I agree completely with your premise until a condo is listed on the open market. How can I make an educated choice between 5 or 6 units I'm attracted to, without knowledge of the condo which I am also buying. What can be positive about keeping some of the facts secret. I don't believe I ever said the government should dictate a schedule, it should mandate that those response for the welfare of the residents of the building they are managing should have a long term plan. A fine line perhaps, but I see no reason I should have to offer into a secret society to learn the secrets which could make me want to get back out of it.
ReplyDeleteWOW--great run of comments on a fun Blog. You can tell there is a high degree of understanding and a real desire of expression from an obviously IQ+ nice group of people.The info garnered from a blog like Larry's is invaluable--a sincere thank you is in order.
ReplyDeleteTommyFudster says ...
ReplyDeleteHeh heh. I think some of you need to go back to square one on a few things regarding BODs.
First, a person must be a unit owner or a representative of a unit owner to be on the BOD.
Second, on almost all BODs, the BODs are unpaid and uncompensated. They volunteer because the law requires a BOD and they want to look out for the best interest of their condo. Typically, they are re-elected annually and needless to say, sometimes it is not easy to find owners to serve. It is not uncommon for a BOD to drop a couple of positions (say a board normally comprised of 5 directors goes down to 3 directors) due to lack of interested owners. When sales, deaths and other turnover are taken into account, BODs can be in a constant state of flux in small complexes. In some situations, owners have to be ASKED to serve on the BOD. It requires responsibility, time and effort and unfair criticism as there are always owners who openly complain. Once you purchase a unit, you have the option of running for the BOD (and probably without competition depending on the age and size of the complex).
Financial plans sound great but have several shortcomings. First, they must be prepared and that usually requires hiring someone to prepare them and keep them updated with the HOA footing the bill. In lieu of financial plans, some condos have policies such as the building will be repainted every 8 years or the roof will be re-roofed every 15 years. A buyer doesn't need to review a financial plan to figure out the condition of most condos. A good set of eyes and a few pointed questions to the seller or his agent will do the job. Most assessments are a result of acts of god or other unexpected events. You never know when the next hurricane is going to do major damage. If you buy a unit in a 50 year old building, you got to expect high maintenance costs. All oceanfront condos are in a very harsh environment and take a terrible beating from mother nature.
The answer to much of what is being discussed on this thread is quite simple. Find a good buyers agent, describe to him/her what you are looking for including price range and be sure to mention you want to know the HOA fees, any potential assessments and the financial condition of the HOA. The agent will potentially be paid a commission and this is part of the work they should be doing for the buyer. Just ask Larry about the expectations one should have of a buyers agent.
We may have come full circle on this Tommy. Why would the Condo (Association) not promote the building on an equal plane with the members who are trying to sell their units? MLS lists the unit with glowing words describing improvements etc. but when I arrive to see it, I have to pass through the Condo portion with it's run down lobby, ancient elevator, and hallways needing paint or other repairs. Why can I not easily learn the status of correcting these deficiencies? What is the advantage of keeping it a secret? It may be well for you to be reminded that you never get a second chance to make a good first impression can apply to properties as well as people.
ReplyDeletePerhaps I am more cynical than most. If you choose to speak to the following issue, please be specific and direct in disputing it.
After looking at a beautifully remodeled unit, why should I then have to endure the necessity to make an offer to learn if the Condo is sound? A well maintained Condo is impacted little by a few units which are not. A beautifully remodeled unit in a poorly maintained Condo is useless. Without a well maintained infrastructure there can be no future for the units. Everything I have seen presented here, on this topic, tells me that at least one BOD member does not share this reality. In addition I read that it is a casually accepted fact that residents can't be bothered with serving on boards.
Not just me telling you that. I believe this is the message the banks are sending loud and clear.
Anon, If I may interject, a buyer can request docs and info before making an offer if he is so inclined. Also, if Realtors were required to add details on the health of the association to a listing, many would be just as misleading as they are with creative photos and glowing descriptions of the units. No disclosure law existing or imagined would protect you from a dishonest seller. Caveat emptor.
ReplyDeleteTommyFudster says…
ReplyDeleteIf you walk into a condo “with it's run down lobby, ancient elevator, and hallways needing paint or other repairs”, that should raise a huge red flag to you. Right off the bat, it would call into question if the HOA has adequately funded maintenance and whether it has sufficient reserves. One might even question if the owners have the financial ability to support the needed HOA fees and/or assessments. There are dead beat owners and there are also owners on fixed incomes.
It was never said a potential buyer had to submit an offer to find out the condition of a condo or its association. There is a difference between information being a secret and information being “in the public domain”. Condos are required to file financial reports with the state of FL but I am not sure what the state does with them. I suspect realtors have access to a database of the financial reports. The info isn’t secret from the standpoint if a prospective buyer asks for the information, it is required to be presented. If I remember correctly, the standard offer form has a checklist item on existing or known future assessments but they should be disclosed prior to an offer on the prospective buyers request.
I personally have not seen a real estate listing of any kind that didn’t attempt to make a property look better than it is. The “glowing words” are a marketing attempt to generate traffic under the theory that the more people you induce to look at a property, the higher the probability it will sell. That is just the nature of the beast. Condos are no different than single family residences in that regard.
Not sure how you came to the conclusion anyone argued against a well maintained infrastructure or implied all owners don’t want to be bothered with serving on the board. Most condos do have a percent of owners who do not have the time to do it specially those who only use their unit 2-3 months out of the year. Each and every condo is a different situation and prospective buyers need to do their due diligence before submitting an offer.
By the way, the FUD in Fudster stands for Fear, Uncertainty and Doom and I am fairly cynical myself. Before buying my unit, I put in a lot of due diligence but after purchasing a unit and moving in, a buyer always learns a lot more. I love living directly on the ocean and the lock it and leave capability. What I specially dislike is the large number of renters in the complex. Unless you plan to rent out your condo when you are not there, I would try to avoid complexes with higher percentages of renters.
I had to reflect on all the comments made concerning HOA fee's. Yes Larry-I probably would not be happy paying those outrageous fee's and I could never acceptably abide to rules and regulations that discriminate against many and benefit few. A single family home is the only way for me to go. I did a bit of digging into the MLS system and came up with some calming numbers on cost. A nice winter home with a modest mortgage at today's rates in a nice community would cost in total"tax included" around $50 more a month than the typical HOA fee. I gotta say I found some beautiful homes at rock bottom prices.It boggles the mind that prices have fallen so far and from my vantage point I still see further decline of 10-20 percent.Could be then HOA's will fall in line. Scary when deflation starts to creep into the thought process.So-I made up my mind and will be looking for a single family "winter" home somewhere in the sun belt of Florida. Melbourne looks nice-but so does Venice.My search begins this winter.Sadie our 45 pound Labradoodle will love the nice weather as well.
ReplyDeleteI love reading blogs specially if it is about real estate. Find your blog through google and your blog is a great to read. Will be back to read more.
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