Sunday, May 15, 2011

The final frontier

Endeavour on the pad and ready to fly.

[update] In the air (above) as seen from south Cocoa Beach May 16, 2011.

Space Shuttle Endeavour is scheduled to blast off tomorrow morning on it's last mission and will be followed by the Shuttle Atlantis in early July which will mark the last flight ever for the 30 year old shuttle program. I thought I'd reopen the topic of the impact of that ending as the Blogger outage last week interrupted the discussion happening in the comments to the last post.

I'm asked all the time how I think the end of the shuttle program and the loss of jobs will affect our real estate market, specifically Cocoa Beach. Predicting that impact is not as straightforward as first glance would suggest. President Bush made the news official six years ago when he announced that the program would end in 2010, so, it's not like thousands of rocket scientists will suddenly learn of their layoff the day of the last launch and will put their houses on the market driving prices down in whatever area they happen to live. The first pink slips were issued last summer and plenty of former shuttle workers are already gone or still here looking for or working another job. I think the moving parts we need to consider to speculate on the impact or lack thereof include the following:

  1. How many of the yet to be laid-off workers live specifically in Cocoa Beach and Cape Canaveral?
  2. How many of those will stay put either retiring or seeking another job locally?
  3. How many of those will sell their homes and move from the area seeking employment elsewhere?
  4. How many of those have already sold their homes in the six years they've known it was coming?
  5. How much of the last few years' significant drop in property prices is due to fear of the impending end of the shuttle program, in other words, how much price drop is already "baked in"?
  6. Do enough shuttle workers own beachfront condos to have any effect on that particular market?
  7. For a buyer looking for a Florida beach getaway or investment condo (and undecided about the exact community) is the local employment picture a factor or is it all about what X dollars will buy?
  8. How much of our market is 2nd home and investment property compared to primary residence?

These are certainly not all the questions we need to be asking to make an informed prediction, just the ones that stand out in my mind. I do know the impact on some businesses in some areas of Brevard County will be and already has been significant and I sympathize with those affected. I welcome comments and speculation on the specific issue of the impact on the Cocoa Beach real estate market in the comments below.

30 year fixed rate mortgages are at an average 4.63% this week as reported by Freddie Mac . Even so, 75% of our condo and townhome sales in April were cash deals. Total MLS condo inventory in Cocoa Beach and Cape Canaveral stands at 397 units this morning.

That's why the most respected greybeards often aren't the guys pounding liquor under the pier every day or quitting multiple jobs to chase swells. They are the ones making short term sacrifices that guarantee they'll paddle out the next day and the day after. ___Matt Walker Surfer Magazine