Sunday, December 30, 2012

That's a wrap

Thought I'd do our December wrap-up a little early as I'm heading out on a boys' adventure in the islands very soon. As most of you already know, 2012 was a record-breaking year for real estate sales in Cocoa Beach and Cape Canaveral. We exceeded the number of sales for every year since 2005 as we continued the upward trend that began in 2009 after hitting our lowest number of sales ever in 2008. The major contributing factor for the strong sales was price. With prices stabilizing at their lowest since the decline began in 2007 and inventory rapidly shrinking, potential buyers were motivated to act by that confluence. As of this morning, December 30, 2012, 606 MLS listed condos and townhomes and 115 single family homes have closed in Cocoa Beach and Cape Canaveral during the year. One quarter of those sales were distressed, either short sales or foreclosures. For sale inventory this morning stands at 311 condos and 46 single family homes, less than half of the total number of sales in 2012. Of these active listings, 12% are distressed. This significant change in dynamics suggests two things for 2013, less total sales and rising prices.

Condo sales so far in December indicate rising prices in a few complexes. Examples:

Ocean Pines 6th floor SE corner 3/2 with 1702 square feet that closed for $405,000 or $238/sq ft.
Sandcastles 3rd floor direct 2/2 with 1286 sq ft closed for $300,000 or $233.28/sq ft.
A 4th floor south facing Mystic Vistas C bldg 3/2 with 1686 sq ft closed for $290,000.
A north facing 6th floor Windrush 2/2 Sand Dollar with 1517 sq ft closed for $265,000.
A 2nd floor direct ocean Royale Towers 1/1 with 888 sq ft closed for $158,000.

We will likely see a large number of units closing tomorrow, the last day of the year. I will do a more comprehensive 2012 wrap up in a few days when all the numbers are in and the closed listings are finalized. I hope everyone had a happy 2012 and that 2013 is happy and prosperous for us all. Happy New Year.

“Life is pretty simple: You do some stuff. Most fails. Some works.
You do more of what works. If it works big, others quickly copy it.
Then you do something else. The trick is the doing something else.”
_____Leonardo da Vinci

Sunday, December 16, 2012

Bottom of the 9th

Returning cruise ship at Port Canaveral

With just two weeks left in 2012  December sales look to finish our record-breaking year on a strong note. So far this month 23 MLS-listed condos and townhomes have closed in Cocoa Beach and Cape Canaveral. That brings total sales for the year to 590 units with 301units actively for sale this morning. Of the 23 sold units, five closed at prices below $100,000 and none exceeded $210,000.

 Sales of note have included the following;

Two more bank-owned Pier Resort units have closed, 1900 square feet for $169,100 and 3400 square feet for $210,000.

Only one direct ocean, east facing unit is among the 23, a Winslow Beach 2nd floor, 468 square foot 1/1 that closed for $92,000.

A south ocean view Sea Oats 2nd floor 3/2 with 1505 square feet and no garage closed for $180,000 with all furnishings.

A foreclosed 4th floor Solana Lake 2/2 with 1698 square feet and garage sold for $175,000.

The 2nd floor NW corner at 2100 Towers closed for $162,500. It has 1600 square feet, wrap balcony and no garage.

A clean, fully furnished 5th floor, 2/2 Villa Vista with a southern ocean view sold for $155,000. No garage and 1018 square feet.

A furnished 2nd floor Royal Mansion 1/1 with a north ocean view sold for a surprising $155,000. Several almost identical units have closed in the last two years below $100,000.

A big lakefront 3rd floor 2/2 at Rock Pointe closed for $146,000. Garage and 1466 square feet. Sold in 11 days.

A 3rd floor direct Banana River 3/2 with 1344 square feet and garage at Pebble Cove sold for $141,000.

A ground floor Conquistador 2/2 in the non-oceanfront building sold in 21 days for $120,000. No garage and 1101 square feet.

A furnished 3rd floor corner 2/2 with 1200 square feet, carport and wrap balcony at Treasure Island on the canal closed for $120,000.

Someone got a nice direct river 3/2 at River Club across from Roosevelt School for $119,000. Carport, boat slip and 1488 square feet.

A nicely remodeled, fully furnished north facing 3rd floor 1/1 in the south building at Twin Towers sold for $97,000 after just 17 days on the market.

A 1st floor Diplomat non-waterfront 2/1 with 750 square feet in need of total remodel sold immediately for $70,000.

Only one single family home has closed in the two cities so far in December. It was a canal-front beauty on Country Club in Cocoa Beach. It sits on just over a quarter acre with 3080 square feet and a 2 car garage, 3 bedrooms, 3.5 baths, a screened pool and party deck overlooking the boat dock that has a 12,000 pound boat lift. It closed for $575,000.

Golf rates just went up at the Cocoa Beach Country Club yesterday. It now costs me $18.60 to play nine holes with a cart, an increase of 50 cents. Or, if I'm up to walking, I can play all I can stomach for $18.36 after 2 PM. I have to pinch myself at times when I'm enjoying this beautiful course on warm winter days in shorts and short sleeves for less than twenty bucks.

If you haven't given it a try yet, I heartily recommend the Fat Kahuna Beachside Grill in the old Key West Taco location on Minutemen just west of Coconuts on the Beach. Possibly the best fish sandwiches in Brevard County and that's with some very serious contenders for the title. Kabobs, salads, hamburgers, fish/shrimp/chicken sandwiches and dinners and more. Eat inside or out.

“There must be some Tommy Hilfiger event horizon, beyond which it is impossible to be more derivative, more removed from the source, more devoid of soul.”  __William Gibson

Wednesday, December 12, 2012

Great Expectations

I had an interesting conversation with a prospective buyer last week. Among his criteria was "being able to take advantage of the poor market conditions in the area in terms of significant below market pricing and leveraging the fact that he'd be paying cash". "Poor market conditions"? The current market would be better described as en fuego (see the previous post). "Significant below market pricing"? I'm not aware of any sales happening at significantly-below market prices. Buyers are standing by ready to purchase good properties when they're priced at current levels with over half of them paying cash. I suspect this particular buyer is going to be looking for a very long time unless he modifies his expectations.

Are the deals all gone? No, but expecting to purchase property significantly below market pricing will eliminate most if not all possibilities. There are plenty of properties that are deals at current market levels. Just matching the last sale in many neighborhoods and complexes would qualify as a deal in my book. Some prices at current levels are down 75% from the peak. Expecting to buy significantly below that level is unrealistic. As always, buyers need to do their homework and know the dynamics at play in the current market so they can have a better chance of success. I'm glad to help if you have questions about the Cocoa Beach and Cape Canaveral market.

Some of you will have read this similar post from 2009 but it's worth revisiting. Self Defeating Games

"Amateurs talk strategy, professionals talk logistics." ___Gen. Omar Bradley

Saturday, December 08, 2012

Burn rate and parades

We crossed a threshold this week with 574 closed condos and townhomes in Cocoa Beach and Cape Canaveral so far in 2012. That is the highest number of closed sales for any year since 2005, which was the biggest year in history with 805 closed condos. With just 17 shopping days until Christmas I thought it would be a good time to calculate the burn rate again. Speaking of shopping days, does that term even apply in 2012 with most stores open seven days a week and online shopping always available? On the subject at hand, I have figured these burn rates in Cocoa Beach and Cape Canaveral using the MLS for sale inventory this morning December 8, 2012 and the monthly average sales using sold numbers for the most recent completed three month period, September, October and November 2012.

Condos and townhouses
All prices - 290 units for sale - selling 17% of supply per month.
Under $200,000 - 123 units for sale - selling 27% of inventory every month.
$200,000 to $400,000 - 118 units for sale - selling 9% a month.
Over $500,000 - 33 for sale - selling 5% per month.

While inventory in the lower price ranges is drying up, the high end still has a healthy supply although down drastically in the last year and a half. There are 117 pending condo sales, none over $425,000. Hopefully, new listing activity will increase soon to take up the slack. Distressed sales are still at 11% of the total supply.

Total single family home inventory stands at 50 today. That's a 6 month supply at the current sales rate. As in 2011, the lower price ranges are the most active with but a 3 month supply of sub-$200,000 houses for sale about the same as in 2011. There are 16 pending home sales on the books right now.

The Cocoa Beach Christmas Parade is today in downtown CB beginning at 2 PM. Bring the kids, the dog and lawn chairs and enjoy this small town tradition and visit with friends. The route will be south on A1A from the Kelly Slater statue down around City Hall and back up Brevard Ave.

"We don't expect kittens to fight wildcats and win
- we merely expect them to try." __Robert Heinlein

Wednesday, December 05, 2012

Short sales and income tax

A reminder to sellers who closed a short sale in 2012. If you had forgiven debt, you have reportable income. The absence of a 1099 from the lender does not release you from the obligation to report the forgiven debt as income. On the other hand, if the lender did not provide a release of the balance due, there is no income to report. But, you're still on the hook for the unpaid balance.

2012 short sellers, if you haven't done so already, contact your accountant or tax adviser now for how best to handle your possible tax liabilities. There may be beneficial strategic moves you can make before the end of the year.

"I have turned down a lot of money for things that would have made me feel cheesy."  _____Tom Petty

Wednesday, November 28, 2012

More trend examination

Rise of the full moon Nov. 27, 2012
Being a numbers guy I'm constantly doing mental math and looking for patterns in everything. At restaurants I'm silently estimating average ticket, seating capacity and rate of table turn and doing an estimated daily gross instead of just enjoying my meal. It's a curse. I spent a good part of the Art Festival last weekend trying to estimate hourly take for the Kettle Korn guys who had a line at almost all times waiting to shell out $5 or more for bags of yummy Kettle Korn. Let's just say that they had a good weekend. Finding myself this morning without any scheduled property showings, I thought it was a good time to once again crunch the details of the recent sales and try to determine some of the current trends. I used the most recent completed month, October, for closed MLS-listed condo sales in Cocoa Beach and Cape Canaveral. Not surprising is the continuing reduction in the percentage of cash sales nor is the continuing shrinkage of distressed sales. Selling price as a percentage of asking price remains high as does the high number of quick sales and full asking price sales. Stats from those sales are below.

Total condo and townhomes sales - 55
Distressed (short and foreclosed) - 25% - down from 34% in September
Financed with a mortgage - 47%
Cash sales - 53% - down from 75% just a year ago.
Sold in less than 30 days on market - 44%
Sold for full asking price or more - 24%
Average selling price as a percentage of asking price - 96%

The busiest price range was between $100,000 and $200,000 with 40% of all sales falling in that range. 35% of the sales closed for less than $100,000 and 25% closed for more than $200,000.

Condo inventory this morning stands at 286 units with an additional 50 single family homes for sale in the two cities. Only 11% of the active listings are distressed. With the current dynamics it is more important than ever to be well-informed if looking to buy. With so much competition for the priced-right listings (almost half selling in less than a month and a full quarter selling for full asking or more) buyers need to know how to identify those listings. Throwing out random lowball offers isn't working right now. The lowest discount to asking in October was 15% and was a sale in which I represented the buyer. Just throwing out an offer that was 85% of asking would not have succeeded. We were able to show the seller that their asking was unreasonably high and produced solid comps to justify our reasonable offer. By knowing the market and doing our homework and then demonstrating the reasoning behind our offer we were successful in our purchase.

Low offers without justification have very little chance of success in this market. Conversely, knowing what the current market is paying for properties with specific criteria, basing an offer on that knowledge and providing substantiation with the offer is a recipe with a very good chance of success. For unique or low-supply property types, buyers may have to try another strategy. Your buyer's agent, if he's good and if he's doing his job, will know what tack to take. As always, knowledge is power. Have questions? Call or email me.

"There is no excellent beauty that has not some strangeness in the proportion."  ______Francis Bacon

Tuesday, November 20, 2012

November halftime report

I didn't choose the thug life. Thug life chose me.
The week of Thanksgiving 2012 and as of Tuesday morning the 20th, 21 MLS listed condos and townhomes have closed in the month in Cocoa Beach and Cape Canaveral. The majority of the closed sales fall in the over $200,000 range with a full third closing at prices between $200,000 and $300,000. This is a shift away from the lower price ranges that we've been expecting as the supply of sub $100,000 distressed listings have dried up. I don't track median closed prices but it appears that that number has probably moved significantly higher this year because of this shift.

Sales of note so far have included the following:

A 2nd floor 3/3 corner unit in the new Ocean Cove building in south Cocoa Beach with 1902 square feet and a single garage that closed for $585,000. This was the last new unit for sale in the building.

Another direct ocean, this one a 4th floor SE corner 3/3 unit in Sand Dunes Cape Canaveral closed for $450,000. One car garage and 2102 square feet.

A 10 year old Country Club Point direct Banana River 4/3 that has been on the market since 2008 sold for $399,000. This beautiful unit has high ceilings, 2 car garage and 2115 square feet.

A nicely remodeled 4th floor direct ocean Xanadu 2/2 sold for $330,000. These units are big for a 2/2 at 1761 square feet. This unit had a one car garage and new hurricane shutters in addition to the new remodel.

River Bend in south Cocoa Beach was on fire last month with several closed sales. Another  unit has closed so far this month. This one a 3rd floor direct river 3/2 with 2050 square feet and one car garage. Closed for $282,500.

Two non-direct ocean Shorewood units have closed. Both were 5th floor B building big 2/2 units with 1862 square feet and one car garages. One was a corner with wrap balcony and was newly remodeled. It sold for $280,000. The other non-corner sold furnished for $235,000.

A 3/2, 2nd floor direct ocean Sun Club in south Cocoa Beach closed for $250,000. Small for a 3/2 at 1344 square feet. Has a one car garage.

A 2nd floor direct river 8 year old Solana River unit in Cape Canaveral sold for $225,000. This big 2/2 unit has 2055 square feet and a single car garage.

Three units at 6 year old Bayport have closed so far this month. All had one car garages. A 5th floor 3/2 corner with 2092 square feet sold for $220,000. Another 5th floor non-corner with 2032 square feet closed for $182,900. A same size 3/2 on the 4th floor closed for $163,000.

A top floor (5th) Port Royal SW corner 3/2 with 1572 square feet sold fully furnished for $220,000. Had a one car garage and was partially remodeled.

One of the bank-owned Pier Resort 3/3 east facing units with 1900 square feet and one car garage sold for $175,501.

A 2nd floor direct river Costa del Sol 2/2 with 1315 square feet and one-car sold for $147,000.

A 2nd floor 6 year old Puerto del Rio short sale wins the "smoking deal" award in this group of sales. This 3/2 corner with 1862 square feet and one-car closed for $140,000.

A lakefront Harbor Isles 3/2 on the 2nd floor closed for $140,000. This 1401 square foot unit came with a one car garage.

A furnished non-waterfront Four Seasons 2/2 with 1058 square feet and no garage closed for $92,000.

A ground floor 7 year old Portside Villas 1 bedroom 1.5 bath with 943 square feet sold for $76,000. No garage.

MLS condo and townhome inventory stands at 288 units for sale this morning and there are 49 single family homes for sale in the two cities. Forty listings are either short sales or foreclosures making 12% of the total inventory distressed.

Space Coast Art Festival is this weekend in downtown Cocoa Beach. If you can, try to make it. The streets will be closed off and there will be thousands of friends and visitors checking out the hundreds of exhibits. It's always a good time.

"There are things we do not know we don't know." __Donald Rumsfeld

Friday, November 09, 2012

The trend is your friend (sometimes)

Click on charts for larger easier-to-read versions.

The trends of recent months remain firmly in place. Sales held strong through October (55 condos and 9 single family homes) even as the inventory depletion continued. At October's rate of sales it will take just five months to sell the entire MLS inventory.

Distressed listings (short sales and foreclosures) in Cocoa Beach and Cape Canaveral are now at their lowest point since 2007 when there were none. Of our total residential inventory of 325 homes and condos there are only 32 short sales and foreclosures offered, 10%. Only one of those is a single family home.

2013 should be an interesting and different year for real estate sales in our market. I expect selling prices to continue their slow increase as a side effect of the low inventory and diminishing distressed listings. We should also see far fewer total sales next year unless some as-yet-unknown source of properties falls on our market. The rumored backlog of bank-owned properties predicted to flood markets has yet to appear here on the beach. At this point I see no reason to think that we will see any significant number of new bank-owned listings here. County records show quite a few REO properties in other parts of our county but they include very few in Cocoa Beach and Cape Canaveral. Personal anecdotal observations seem to indicate far fewer unit owners behind on condo fees than in recent years. This from daily conversations with owners, board members and property managers. That would support my hunch that there are not a lot of pre-foreclosure or future short sale condos hiding out there.

Buyers need to realize the changes in our market and adjust their expectations accordingly if they hope to purchase a property here. Those hanging their hats on paying no more than the lowest price already recorded for a comparable property will likely be disappointed. Unless there are multiple units selling at the exact same price, only one buyer buys at the absolute bottom. Everyone else has to be content with buying near the bottom. At current prices, missing the absolute bottom by a few thousand dollars does not a bad deal make. Buyers with reasonable expectations (swift decision making doesn't hurt) are still being occasionally rewarded with smoking deals.

“Markets aren’t completely efficient, but they are mostly efficient. Easy money tends to be rapidly removed by the largest, fastest, most connected participants. In other words, someone other than you.” __from Mortality Sucks

Thursday, November 01, 2012

October out with a bang

Slater Brothers contest site Sunday Oct. 28, 2012
While the Twitter feed of my daily updates is down I will post updates to the main blog here. Twitter and several other major websites are feeling the effects of Hurricane Sandy.

First we'll look at the single-family home sales since last Wednesday.

Lowest price of the five sales was for a 2 story, 2 bedroom, 2 bath beach house in south Cocoa Beach across the street from the beach and a stone's throw from the river. It had a garage and 1433 square feet and closed for $164,200.

A 10 year old 3/2 half-duplex on Adams in Cape Canaveral with 1476 square feet and 2 car garage sold for $169,000.

A foreclosed 3/2 on Dorset in Cocoa Beach with 1858 square feet and 2 car garage sold for $202,000.

A super nice 3/2 with 1860 square feet and 2 car garage in Harbor Heights Cape Canaveral sold for $325,000.

The huge 5 year old, 2 story beauty at the end of the canal on Catalina in Cocoa Beach that's been for sale for around two years finally sold. This house has 7 bedrooms, 4.5 baths, a 3 car garage and a total of 6475 square feet under air. Closed for a remarkable $599,000.

Condo sales of note in the last week included the following:

A 4th floor direct ocean Meridian 3 bedroom, 2 bath with 2072 square feet with many upgrades and built-ins and garage closed for $690,000. According to my research, this is the first resale at Meridian that has sold for more than the original when-new selling price. Times are a-changing.

A 4th floor Michelina direct ocean 3 bedroom, 3 bath corner with 2011 square feet and garage sold for $680,000 according to the MLS. Details of this sale are somewhat hazy as the sale is recorded on the appraiser's site for $560,000. Insight anyone?

A 2nd floor direct ocean southeast corner Chateau by the Sea (next to the Pier). It was a 2 bedroom 2 bath completely remodeled and furnished weekly rental unit. Closed for $255,000.

Two River Bend side view units in south Cocoa Beach closed in the last week. Both were 3/2 units with 2292 square feet and garage. A 4th floor south facing closed for $250,000 and a 2nd floor north facing sold for $240,000.

A furnished, very nice condition Coral Seas 2nd floor direct ocean 3 bedroom 2 bath with 1969 square feet and garage closed for $320,000.

A furnished Flores del Mar south facing 2nd floor, 3 bedroom, 2 bath with 1589 square feet and garage sold for $255,000.

A south ocean view 5th floor 2100 Towers 2/2 with updated kitchen and garage closed for $215,000.

A 4th floor direct Banana River fully furnished River Lakes 2/2 with 1244 square feet and garage closed for $180,500.

A direct river Sunset Harbor 4th floor 2/2 with 1323 square feet and two garages sold for $154,000.

A 5th floor ocean view, fully furnished Port Royal of Cocoa Beach 1 bedroom 1 bath with 960 square feet and garage sold for $130,000.

A 2nd floor furnished Villages of Seaport 2/2 with 1014 square feet and open parking closed for $144,000.

An Oceana of Cocoa Beach 2/2 with 912 square feet and garage closed for $112,000.

A 3rd floor Twin Towers short sale 1 bedroom 1 bath sold for $71,100.

A very nice ground floor Riverview Manor 1/1 with 665 square feet and open parking sold for $61,000.

It was a busy week. After being postponed for two days because of Hurricane Sandy the Slater Brothers Annual Surf Festival ran last Sunday in perfect conditions, sunny skies, offshore winds and surf that was clean and a couple of feet overhead. Local boy CJ Hobgood took a break from the world tour to come home and snatch first place away from the less-fortunate local boys. All this while Sandy was bearing down on the northeast with (unknown at the time) devastation. Our thoughts are with all of those so severely affected by the storm.

"Mounting evidence suggests that beer, and the beer industry that surrounds it, may be as good for growth as excess sobriety." ___Charles Kenny

Wednesday, October 24, 2012

Catch-up on October activity

I am back. Thanks to the tolerance of those who've had to deal with my very sporadic access to email and total lack of cell phone service for the last two weeks. I am freshly recharged and here for you again. For the record, I was delivering a boat from Florida to Abaco in the eastern Bahamas. Weather was mainly perfect and the diving was a welcome change from our less than clear and always deep waters offshore central Florida. The tasty crustaceans pictured were welcome visitors to the dinner plate most nights. Lobsters the size of the two larger ones are unusual in the Bahamas but are there if you know where to look. For perspective, the smallest one pictured is just barely legal size. Easy access to these abundant and beautiful waters is just another plus of living in Cocoa Beach. One hour from Melbourne International Airport by air.

During the two weeks there has been brisk activity in the Cocoa Beach and Cape Canaveral real estate market, mainly in condos. A total of 22 units closed in my absence. Sales ranged from a high of $347,500 for a remodeled and fully furnished, direct ocean 6th floor Emerald Seas 3/2 to $42,776 for a foreclosed Lamp Post 1/1 that was listed for $29,900. That's 43% over asking price. Competition in the lower price ranges has become fierce as supply has dried up. A slightly larger Star Beach foreclosure closed for $35,700.

A couple of short sale 3/2 units on Orlando Ave. one block from the beach were picked up by an investor for $65,000 and $85,000. Both sold for $6000 over asking.

A Portside Villas 2/2 ground floor sold as a short sale for full asking price, $89,900. It took about 2.5 months from contract to close. This particular unit sold new in 2006 for $229,900.

A direct ocean, top floor (5th) Sand Dunes in Cape Canaveral sold as a short sale for $305,000. It is a 3/2 with 1612 square feet and a garage. This particular short sale was previously approved by the bank with another buyer at $325,000. When that buyer walked I presented an offer for my client for $305,000 and we were able to get approval at the $20,000 lower price.

A 4th floor Treasure Island Club 2/2 in Cape Canaveral overlooking the manatee canal sold for a remarkable $110,000 as a court ordered sale. It has 1200 square feet and an excellent view.

In another short sale, someone bought a 1st floor direct ocean Sand Pebbles 3/2 with 1375 square feet and garage for $195,000.

A gorgeously remodeled 2/2 Beachwalk canal-front unit with deeded boat slip and garage sold for $165,000. It has 1479 square feet. This sale pushes the comps up in this complex after the last two sales recorded for $130,000 each.

A 3rd floor 2100 Towers 2/2 with a peek of the ocean closed fully furnished for $168,000. It has a remodeled kitchen but no garage.

Another of the Sea Spray townhomes in Cape Canaveral sold as a foreclosure for $91,000 which was $1100 above asking price. These units sold new in 2006 for $315,000. Garage, 1702 square feet and 3 bedrooms and 3 baths.

A direct ocean North Triton Arms 2 bedroom 1.5 bath, 2nd floor unit in downtown Cocoa Beach closed for full asking price, $175,000, after two days on the market.

Buyers take note. If you see "bank-approved" price on a short sale listing it usually means that the first buyer walked after the bank issued the approval letter. There are many reasons for walking away. Sometimes the buyers have found something else during the often-long wait but many times the bank approved price is higher than their initial contract and they refuse to move up to the approved price which may still be in "smoking deal" range. What it means for the next buyer is that, if they are good with the approved price, they can usually close in less than a month. Just because the first buyer walked doesn't mean the approved price is not a deal.

I will resume my usual schedule of updates now. Wind is honking in Cocoa Beach and the island I just left is preparing for Tropical Storm (soon to be Hurricane) Sandy.

"One of the unique things about planes is you can put them pretty much
anywhere you want. They just might not be in the configuration you'd
prefer by the time they get there." ___anonymous

Tuesday, October 09, 2012

Seriously out of the office

I will be relocating my office temporarily to the pictured location.

Posts may be less frequent in the short term. If it's any consolation, I'm thinking about you.
Please direct all calls to Kim at 321.917.5788 or emails to


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Thursday, October 04, 2012

September by the numbers

In the month of September in Cocoa Beach and Cape Canaveral, 47 MLS-listed condominium and townhome units closed. Prices ranged from  $39,000 for a short sale, small one bedroom condo two blocks from the beach in Cape Canaveral to $950,000 for a top floor direct ocean Meridian 3 bedroom, 3 bath corner with 11' ceilings and 2508 square feet. Only four sales exceeded $400,000, all direct ocean units. There was one each in Solana Shores, Meridian, Michelina and 3800 Condo. The top floor NE corner unit at 3800 Condo closed for $550,000, exactly half its selling price new in 2007.

Thirteen of the 47 sold units were distressed, 7 short sales and 6 foreclosures. The short sales took an average of slightly more than 4.5 months from contract to close. Keep that in mind if you're looking for a short sale bargain. Also be aware that the lender may ask for more money when they do finally respond. That happened to one of my clients last week. Contract signed by the seller the first week of March and then seven months of mostly silence from the title company doing the "negotiating" until finally we get a demand of more money from the bank. We paid it and closed. The seller received total forgiveness of the debt and a nice bonus check for $3000 under the HAFA relocation program.

The six foreclosures were scattered at six different complexes with the highest price, $210,000 for a nice 4th floor Solana Lakes 3/2. Tightest haircut was a Portside Villas 2nd floor 2/2 with cathedral ceilings that sold for $75,000 just seven years after selling for $233,000 new.

There were six single family home sales in the two cities in the month. Prices ranged from $180,000 for a canal-front tear-down on Bali in Cocoa Beach to $312,500 for a nice canal-front 3/2 short sale on Antigua in Cocoa Beach.

We are still hovering right around historical low numbers of properties for sale. This morning there are a total of 48 single-family homes for sale in the two cities. That's less than a third of what it was just a few years ago. A similar situation exists with condos and townhomes, down about three quarters from the peak. Total inventory is 295 units, 21 of which have not yet been built by their somewhat optimistic developers. Of the total inventory, 12% are either short sales or foreclosures.

A Delta IV rocket launched this morning into beautiful clear blue skies carrying a GPS satellite. The mullet run is still under way along the beach and the streets are almost deserted. It's that magical time in Cocoa Beach between summer and snowbird season. The ocean water is still warm, the air temps are starting to cool down (some days), fishing is on fire,  the golf course at the Cocoa Beach Country Club is deserted and traffic is sparse. If you've not visited our town during October, you've missed one of the best times.

When times are tough, constant conflict may be good politics but in the real world, cooperation works better.  ___Bill Clinton

Friday, September 28, 2012

It IS Different Here! [blast from the past]

[This post was originally published on Halloween Day 2008. It is still relevant and true so I thought, partly motivated by laziness (if that isn't a contradiction), that I'd repost for the newer readers enjoyment.]

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

Thursday, September 20, 2012

Random September stats

In Cocoa Beach and Cape Canaveral, as of September 20, 2012, more MLS listed properties have closed in the January through September period than in any year since 2005. The trends of recent months continue. The major current dynamics include a declining number of cash purchases, although cash sales still represent the majority at 59% of the total. We are also seeing a much shorter days on market as the inventory contracts. The median so far in September is 44 days on the market with 40% of all sales selling in 14 days or less.

The average selling price of the 35 closed sales was 96% of asking price with six properties selling for full or greater than asking. Only six of the total sold for less than 91% of asking. Keep this in mind when preparing your offers but don't neglect to do your homework and know what a property is worth TODAY before deciding what to offer. Many of the current active listings are unsold because they are overpriced.

Distressed sales continue to be a high percentage (34%) of closed sales, not because there are a lot of distressed listings, but because of the backlog of short sales that contracted earlier this year and last that are just now coming to the closing table. I received notice of approval of two short sales this week, one of them from the first week of March. Only 12% of the current residential inventory in  Cocoa Beach and Cape Canaveral is distressed, either short sales or foreclosures.

Our condo inventory has bumped back up from the recent all-time low of 266 units to 283 this morning. That increase is due almost entirely to 16 new listings in a yet-to-be-built Puerto del Rio building. This building, if they're able to sell any pre-construction units, will be direct Banana River with the larger floor plan 2436 square foot 3/2 units. Asking prices are between $299,000 and $399,000. Of the total condo inventory, 21 of the listings are in not-yet-in-existence buildings.

The mullet run is in full force with millions of finger mullet running south down the beach with plenty of big predators taking advantage of the easy meal. The surf has finally calmed down enough to make surf fishing not quite so challenging as recently. Fishermen using live mullet or mullet-looking artificials in the surf will be rewarded, hopefully with a legal snook. To keep a snook, fishermen must have a snook stamp and the fish must be between 28 and 32 inches nose to pinched tail. Daily bag limit is one fish per person. Good luck and good eating.

"Bigger is not necessarily better but better is always better."  __Jason Goldberg

Sunday, September 09, 2012

August breakdown

One of the smaller waves on Sept. 8, 2012 in south Cocoa Beach
A total of 54 MLS listed condos and townhomes closed in the month of August in Cocoa Beach and Cape Canaveral. Prices ranged from a high of $800,000 for a huge top floor Ocean Club 4 bedroom 4.5 bath beauty with 20' ceilings and 4565 square feet to $25,500 for a 1 bedroom, 1 bath Jeannie by the Sea with 396 square feet. Fifteen units sold for $100,000 or less and five closed for $300,000 or greater. Fourteen of the condos were direct ocean and sold in a range of $140 to $278 per square foot. Those who use dollars per square foot to justify offers or asking prices take note. Comps need to be very similar in size and condition to have any validity when the market has this kind of range of selling ratios.

Of the 54 sold units, 16 were distressed, five foreclosures and eleven short sales. That's a higher percentage than exists in the "for sale" inventory because of the number of previously contracted units. The current level of distressed condo inventory in the two cities is at 14%. Without the nine bank-owned units at the Pier Resort the ratio is 10%. There are a total of 272 condo and townhome units for sale this morning, right at the record low number reached a few months ago. The same sparse conditions exist in the single family home market with a measly 49 actively for sale on the Cocoa Beach and Cape Canaveral MLS. Only one of those is distressed, a nine year old 4 bedroom, 3 bath home on the water in Cocoa Beach with a suggested price of $419,900.

This has been a week of excellent surf. We got our first pulse from Tropical Storm Leslie last weekend and it built through the week with some help from Hurricane Michael until the crescendo yesterday when waves were double-overhead plus in south Cocoa Beach with perfect conditions. It's still there as I write this, although smaller, and expected to be fun for a few more days. There are a lot of happy, tired residents today in this lucky little beach town.

"You'd be surprised how little you can live off if you're willing to sacrifice anything that makes life enjoyable." ___Unknown

Sunday, September 02, 2012

Moving targets

A shift is underway in our local market. As the distressed inventory has disappeared many sellers' willingness to deal is lessening. Buyers using the recent comps for offer substantiation are not being well received by sellers who have seen recent prices edging upwards. Expecting to buy for the same or less than the recent comps isn't unreasonable in a down-trending market but we are no longer in a downtrend. In a stabilized market, like ours currently, a non-distressed seller has little incentive to match the recent low comps. Inventory is low and there are lots of active buyers. Considering our current conditions, serious buyers should be open to the idea of paying more than the comps suggest. It may not be necessary but flexibility might be rewarded. From 2008, the first year we saw a short sale, until last year, the idea of paying over the recent comps was insanity. Mid-2012, not so crazy. Our  inventory of distressed properties for sale in Cocoa Beach and Cape Canaveral was around 120 in 2008 and 77 of those closed that year. The history of distressed property sales in Cocoa Beach and Cape Canaveral looks like this.

Closed distressed sales
  • 2008 -   77
  • 2009 - 137
  • 2010 - 233
  • 2011 - 219
  • 2012 - 118 through August 31

There are 74 contracted distressed sales yet to close in the two cities and a mere 43 actively for sale. For buyers hoping to steal a distressed direct ocean condo the list is short. There are two. After burning through 784 short sales and foreclosures in Cocoa Beach and Cape Canaveral since 2008, that chapter of our market story is coming to an end. Total condo inventory is at an all-time low of 275 units. Our total residential inventory this morning including condos and single family homes is 329. Of those 43 are either short sales or foreclosures.  

Take-away: we have transitioned from a declining market dominated by distressed sales to a market state of near-normalcy. It surely took long enough. Biggest issue at this point is the scarcity of desirable listings. A lot of the new inventory that would be coming on the market now got flushed out prematurely by declining prices. Buyers and sellers of real estate, adjust your expectations and strategies accordingly. Good luck in your quest. Surfers, a new swell should start showing by Tuesday with waves expected to peak at about head high on September 5 courtesy of Tropical Storm Leslie. See you in the water.

" using a strategy of averaging down, you are guaranteeing that your biggest positions will be in your worst trades." - Zikomo

Monday, August 27, 2012

Warm, green and fuzzy

This post is a little off the usual subject but relevant. For sellers and listing agents; You may want to occasionally visit your property if no one is living there as bad things sometimes happen to vacant property. Of particular concern is keeping the air conditioning set low enough (and making sure it's working) during the warm months to prevent mold and mildew. The photo at the left is from a very nice oceanfront condo that has an asking price of  $400,000. Apparently no one has been inside in a while. The AC is either not doing it's job or it's been set high to save a few dollars on electricity. In either case, the green fuzzy stuff you see on those utensils is mold prospering in the warm, damp conditions. Check your vacant properties often. Speaking of warm and damp, that's exactly the conditions this morning in Cocoa Beach as we are getting the blustery outside rain bands of Tropical Storm Isaac hundreds of miles away in the Gulf.

“The difference between stupidity and genius is that genius has its limits.” - A. Einstein

Saturday, August 18, 2012

Dog days and mortgages

Nine of the 24 condos closed so far in August were on the market for less than a month. This is the new normal in our market. One quarter of the closed units sold for less than $100,000 and only three sold for more than $233,000 including a mack-daddy penthouse unit at Ocean Club with 4565 square feet and 20' ceilings that sold for $800,000. Of the 24 sold units, five were distressed. In a radical departure from the trend of the last few years, cash sales lagged financed purchases. Fifteen of the 24 condo purchases were financed and only nine sold for cash.

Lowest price for a direct ocean unobstructed view was $192,000 for a 4th floor Wellington 2/2 in downtown Cocoa Beach. Only 1049 square feet and open parking, BUT, 4th floor direct ocean within a few blocks of over two dozen restaurants and the post office and library for less than $200,000.

A foreclosed, 2nd floor, direct ocean Boardwalk 2/2, also in downtown Cocoa Beach, closed for $231,900. Not a bad price for 1296 square feet and a garage and the ability to rent weekly.

Also in downtown Cocoa Beach, a fully furnished and nicely remodeled 2nd floor Ocean Pines direct ocean2/2 with 1353 square feet and garage closed for $300,000. Note that the selling prices of these units varied in dollars per square foot by around 20% at the extreme.

A new ten year low price at Emerald Seas recorded at $225,000. This was for a direct ocean 2nd floor 2/2 with 1602 square feet. Partially obstructed ocean view from the 2nd floor here because of all the palm trees but still quite a deal, in my opinion, at this price in this complex.

Another 2nd floor direct ocean unit, this one at Mystic Vistas (A building), closed for $280,000. Even less of an ocean view here because of the row of townhomes between the building and the ocean but still a nice 8 year old 3/2 unit with 1775 square feet and garage. Sold fully furnished.

A Spanish Main weekly rental 2/2 on the 2nd floor with direct ocean views over the pool closed for $180,000. This unit unlike many Spanish Main units has a garage. The seller financed part of the purchase price.

A foreclosed south facing 1st floor Royale Towers C building 2/2 closed for $158,000 with 1374 square feet and a garage.

A Royal Mansion 2nd floor 1/1 weekly rental unit with a decent ocean view closed for $147,000. We saw six of these 1/1 units sell below $100,000 in 2010 and 2011 but of the three closed so far this year, the lowest price paid was $127,500.

Six single family homes have closed so far in the month of August in Cocoa Beach and Cape Canaveral. A 3002 square foot 4 bedroom, 3 bath with a three car garage in Discovery Bay in Cape Canaveral sold for $579,000. This beautifully appointed canal-front home is three years old and has a pool and covered boat dock.

A very nicely remodeled canal-front 4/4 pool home in the Cocoa Beach Country Club subdivision closed for $548,000. It has 2550 square feet and a boat dock.

A remodeled 4/2 pool home on Dorset in Cocoa Beach on a corner of the canal with 140' of waterfront sold for $410,000.

An open water fixer upper 4/2 with 2111 square feet on La Riviere closed as a short sale for $242,000 after six days on the market.

We continue to be locked in our summer pattern of calm mornings followed by afternoon thunderstorms. Temps have remained mild in areas close to the ocean as the afternoon sea breeze off the colder than normal ocean serves as a natural air conditioning system. Turtle nesting and hatching also continues at a very intense pace. While offshore last week I saw dozens of adult and hatchling turtles swimming in the calm Atlantic. Some areas of the beach have so many nests that the beach appears to have been the scene of a tractor pull.

"Morality is doing what's right regardless of what you're told.
Obedience is doing what you're told, regardless of what's right."

Tuesday, August 07, 2012

July sales

Condo sales in Cocoa Beach and Cape Canaveral slowed significantly in July. After 68 closed sales in May and 62 in June we finished July with only 37 MLS-listed condos and townhomes closed in the month. Single family homes were stronger with 13 closed, two in Cape Canaveral and eleven in Cocoa Beach. Of the 50 total closed residential sales, 12 (24%) were distressed, ten short sales and two foreclosures. There are 286 condos and townhomes for sale this morning and 43 single family homes. There are two foreclosure homes for sale and zero short sales or 5% of the total distressed. There are 18 short sale condos and 21 foreclosures making distressed condos 14% of the total for sale condo inventory.

Sales of note included;

Two Meridian direct ocean units, both 2nd floor. One was an interior 3/2 with 2072 square feet that sold for $580,000. It sold new in 2007 for $672,900. The other was a corner 3/3 with 2487 square feet that closed for $700,000 after just 5 days on the market. It sold new in 2009 for $735,000.

The last unsold unit in the Ocean Paradise building in south Cocoa Beach. This was the 2nd floor NE corner, 3/3 with 2444 square feet and a 2 car garage. Sold for $507,500. If memory serves me right they were asking close to a million for this pre-construction.

Another south Cocoa Beach complex, Magnolia Bay direct Banana River 3rd floor corner 3/3 with 2552 square feet and a 2 car garage closed for $435,000.

Again in south Cocoa Beach, a very nicely remodeled Constellation 2nd floor direct ocean 3/2 with 2126 square feet and a 1 car garage closed for $365,000. This one had been on and off the market for six years beginning at $975,000. When the price finally got down to $380,000 in June they had an accepted contract in 15 days. There's a lesson here.

A Royale Towers B building direct ocean 2nd floor Sand Dollar 2/2 with one car garage sold for $280,000.

A fully furnished "A" building Stonewood direct ocean 4th floor 3/2 with 1588 square feet and one car garage closed for $275,000. The "A" building is the one on the right that looks over the pool to the ocean.

A foreclosed Solana Shores side ocean view 3/2 with 1921 square feet and a one car garage sold for $257,500 after eight days on the market. It had previously been offered as a short sale at steadily dropping prices from $314,000 to $289,000 for over a year without any takers.

Another Royale Towers direct ocean A building 6th floor Sand Dollar 2/2 closed as a short sale for $250,000. It last sold for a shocking $510,000 in 2005 by an owner who doubled his money in three years. Ah, those were the days. This particular contract was taken out in the first right of refusal process by another RT owner.

A tastefully remodeled and fully furnished 3rd floor direct ocean Wellington 2/2 in downtown Cocoa Beach closed for $250,000. It had 1049 square feet and no garage.

Another unit in the resurrected riverfront building behind Sunset Cafe (don't know if they've decide on a name for this condo) sold for $238,000. It was a 3rd floor 3/3 with 2084 square feet and a one car garage.

Yet another Royale Towers unit, this one in the south facing C building closed for $220,000. It was a remodeled and fully furnished 3rd floor 2/2 with 1256 square feet and a one car garage.

Another 3rd floor Wellington, this one the SE corner 2/2 with 1139 square feet and open parking closed for $199,900 after 25 days on the market.

Three units closed in July in the weekly rental Chateau by the Sea next to the Cocoa Beach Pier. Two were ground floor 2/2 units, one a direct east facing with 910 square feet that closed for $190,000 and the other a south facing with 844 square feet that closed for $153,000. A third floor south facing 2/2 with 910 square feet closed for $173,000. All were fully furnished and none had a garage. Of note here is that two of these contracts were taken away from the original buyers by another owner in the first right of refusal process.

A very nicely remodeled ground floor direct Banana River Waters Edge West in south Cocoa Beach closed for $215,000 fully furnished. It was a 3/2 with 1445 square feet and a one car garage.

A fourth floor furnished canalfront Commodore 2/2 NW corner with 1234 square feet and one car garage closed for $175,000.

A top (5th) floor Puerto del Rio sold as a short sale for $173,000 after just four days on the market. It sold new in 2007 for $390,000. It is a 3/2 with 1852 square feet and a full 180 degree wrap balcony and one car garage.

A first floor direct ocean Canaveral Sands 2/2 with 1222 square feet and a one car garage sold for $171,500 after being on the market since early in 2009.

An eleven year old Minutemen Villas 4/4 townhouse on the Cocoa Beach golf course sold for $150,000.It had 1564 square feet and a 2 car garage.

A direct ocean 2 bedroom 1.5 bath North Triton Arms with 1088 square feet in downtown Cocoa Beach closed for $145,000 after 11 days on the market.

A 6 year old Oak Park townhome with 4 bedrooms, 2.5 baths and a 2 car garage closed as a short sale for $140,000. It sold new for $349,900 in 2006.

A south ocean view 2nd floor Siesta del Mar short sale finally closed for $130,000. It has been for sale since January 2008 and has had multiple buyers with accepted contracts along the way but for various reasons, mainly the bank's slow pace, they all walked.A buyer finally went the distance and after waiting just five months this time was able to close. I'm sure the neighbors are relieved.

Somebody got a smoking deal on a short sale 6 year old, 2nd floor Portside Villas 2/2. Closed for $80,000. It has cathedral ceilings and 1211 square feet. No garage. Sold new in 2006 for $224,900.

Two 672 square foot 1/1 units at Starbeach in Cape Canaveral closed for $40,000 and $43,000.

A foreclosed Cape Shores 2nd floor 2/2 with 1038 square feet sold for $62,900. No garage.

Five canalfront single family Cocoa Beach homes closed in the month at prices between $299,000 for a short sale with tiny waterfront on Indian Creek needing work to a remodeled 4/2.5 on Jamaica with pool, boat dock and tiki bar that closed for $365,000. Lowest single family sale was $135,000 for 1404 square feet needing a lot of work. Several nice non-waterfront homes closed between $165,000 and $215,000.

With the tight inventory most good listings that are priced anywhere within reasonable range are selling quickly. If you're looking, get your criteria as defined as possible and be prepared to move quickly when a good one appears. If you plan to buy with a mortgage, talk to your lender before you begin the search. Be aware that at least one of the biggest mortgage lenders is failing to meet deadlines at an alarming rate. Local lender is almost always better than an out of state lender even if that out-of-stater it is your brother in law. Also, be aware that first right of refusal is being exercised a lot recently especially in a few certain complexes. Your buyer's agent, if he's good, will know which complexes I'm talking about. If you need a good buyer's agent call me. Buzz words today: shade, breeze and liquid refreshment.

"Fertile's the word."  ___Matthew McConaughey (expecting his third child)

Friday, August 03, 2012

Yikes - Back to school

Surf school session behind Coconuts at Minutemen Cswy.
Just hearing those words puts a knot in any student's stomach unless you're talking about surf school. We've only got a few days before first day of school, Wednesday August 8 for most Brevard County students. We are lucky in Brevard County to have highly ranked schools. Among Florida's high schools, four of Brevard County's are in the top 50 with three in the top twenty, according to USNews and World Reports

They are:

Edgewater Junior/Senior High - Merritt Island - # 6 in Florida and #43 nationally
West Shore Junior/Senior High - Melbourne - # 9 in Florida and #64 nationally
Cocoa Beach Junior/Senior High - Cocoa Beach #18 Florida and #188 nationally
Satellite Senior High School- Satellite Beach - #45 in Florida and #794 nationally

To put these rankings in perspective this is out of 990 Florida high schools and just under 22,000 nationwide. The top three on our Brevard list have been awarded the gold medal as best schools in their categories nationwide. Only 30 schools in the nation received this designation.

As of this writing I'm not aware of any rankings of surf schools but based on my casual observations this summer, our local surf schools would probably rank higher than our high schools. They have churned out a healthy quantity of stoked young grommets this year judging from the smiles on the young faces. See the photo above of a class carrying their boards back from a morning session. Look for the lineups to be crowed into the foreseeable future.

"The important thing is not so much that every child should be taught,
as that every child should be given the wish to learn." __John Lubbock

Saturday, July 28, 2012

Going for the gold

Thunderstorm over the Cocoa Beach golf course
Multiple offers have become the new normal in our market. I submitted an offer on a short sale Cocoa Beach canal home last week. There were 12 offers in the first five days with $10,000 above asking not being enough to win. Of four houses I planned to show yesterday two had contracts between Thursday and Friday, one of those receiving three offers. A third of the condos closed so far this month in Cocoa Beach and Cape Canaveral and almost half of the single family homes were on the market less than a month before going under contract. A couple of things are contributing to this. There seem to be a lot of buyers who were waiting for prices to bottom or stabilize who have now begun actively offering on properties. Add that increased demand to the depleted supply and, Voila, multiple offers on any new offering that's priced right.

Another shift in activity is increasing numbers of condo sales in the higher price range. In the first three months of the year 19 condos closed for more than $300,000. Since April 1 we've seen 29 closed units over $300,000 with eight of those over $500,000. Meridian has been a large part of that activity with seven units selling in 2012, all over $520,000. Other active luxury buildings in 2012 include Constellation and Villa Verde with five sold units each and Magnolia Bay with twelve.

This morning there are a total of 291 MLS-listed condos and townhomes for sale in the two cities and a mere 47 single family homes. Those looking for a river or canal home in Cocoa Beach have but 21 from which to choose. Lowest price for a livable waterfront home is $261,000 for a tiny 3/2 with a view of commercial property across the canal. Of the total residential inventory (condos and homes) 12% are either short sales or a foreclosures. That number was 56% two years ago.

We experienced a pleasant weather phenomenon yesterday, one that happens every so often in the summer. After a few days of west winds the warm surface water near the beach is pushed offshore and the cold water underneath moves in to take its place. The result for us is natural air conditioning as soon as the sea breeze kicks in. While the rest of the state and country was sweltering we were enjoying a cool breeze in the low 80s off the ocean under beautiful blue skies. The photo at the top was from last week, another normal weather pattern for us in the summer, afternoon thunderstorms. Eight more days until lobster season.

"Stay thirsty my friends." __The most interesting man in the world

Wednesday, July 18, 2012

Short sale timelines

Earlier this year real estate grunts were pleased to hear that some of the big banks were going to streamline their short sale approval process. This was welcome news to me as dealing with the prolonged, nonsensical short sale process is one of the most frustrating parts of a buyers agent's life. Alas, it was not to be, at least not the intended result. The process may have been streamlined somewhere behind the lenders' curtain but out here on the front end, the period from contract to closing appears to be taking longer than ever.

I pulled stats for all closed residential short sales in Cocoa Beach and Cape Canaveral since May 1, 2012. There were 21 short sale condos, townhomes and single family homes closed in the period. Two of the 21 were previously approved and both closed in one month from contract date. Of the remaining 19 sales, the average time from contract to closing table was 118 days. Longest time was 270 days and shortest for a not-previously-approved sale was six weeks. Half took four months or longer.

Best case scenario for a buyer hoping to purchase a short sale is to find a property with an approved price that another buyer has walked away from. In the event of an unapproved sale, be prepared to wait for months often with no progress reports along the way. Buyers and their agents are at the mercy of the listing agent and getting status reports from some of them is akin to pulling teeth. I am in the fourth month on one short sale right now. Contract was submitted to the listing office first week of March with proof of funds with the contract which is normal with a cash offer. Six weeks later they informed me that "we are getting there" and asked for a more recent proof of funds. One month after that I am told "we are moving in the right direction". I ask if there is something more specific I can report to the buyer. Answer: "Yes, Once a processor has been assigned (next week, hopefully), the end will be in sight." One week later (eleven weeks in) I get a message that the BPO is being done. Five weeks pass with no contact from listing agent. I ask for another progress report. Listing agent informs me (16 weeks since initial contract) that she was told by the title company that we "should" be there in another 45 days.

As always with short sales, we're ready to close but our search for a property continues while the bank picks its nose.

"Not all information is beneficial." _____Ben Bernanke

Thursday, July 12, 2012

Terminal velocity [updated]

Reported MLS condo sales for June continue to trickle in as the listing agents get around to closing their listings. As of this morning the total stands at 61 closed MLS-listed condos and townhomes in Cocoa Beach and Cape Canaveral for the month of June 2012. That's on the heels of May's 66 closed sales which was the busiest month since 2005. In fact, three of the top five busiest months of the last 81 months have occurred since March this year. Sales in the $300,000+ range have been helped in large part by ten closed sales this year at Magnolia Bay in south Cocoa Beach. Meridian on the ocean in north Cocoa Beach has been active as well with six closed sales this year at prices between $521,250 and $599,000.

Inventory of condos and townhomes in Cocoa Beach and Cape Canaveral today, July 12, 2012, stands at 283 units or 73% off the high of 1049 units for sale in November 2006. There are 31 units asking less than $100,000. That's the same number of sub-$100K units that have closed in the last eight weeks. Distressed sales are at 13% of the current for sale inventory with about a third, eleven, of those in the Pier Resort. Asking prices in the five year old building are $188,000 for the 1900 square foot 3/3 units and $299,000 for the 3400 square foot 3/3s.

Activity on the ground hasn't changed much in the last month. I'm seeing lots of multiple offer situations when priced-right new listings appear. I'm also seeing a greater occurrence of failed offers than in the past as buyers expectations have lagged the market reality. Buyers of real estate in our small market, in most cases, are going to have to accept that the super low closed price of a comparable unit earlier this year or last year may not be repeated in this cycle. I said this before but it bears repeating. The bottom in most condo complexes will be represented by a single sale. Clinging to the hope of matching or bettering that $150,000 Mystic Vistas sale from two years ago has, so far, been fruitless. So has finding another 2/2 Sandcastles for $140,000. I'm confident in predicting that these sales will not be matched or bettered anytime in the near future. There are dozens of other complexes where, like these two, the bottom sale has probably already occurred. This is, of course, my opinion. I could be wrong. Be aware that if you are holding off on a purchase because you think prices are headed lower that you're going to have plenty of competition if that comes true.

[update] To expand on the reader's comment about the lack of detail in the tax record; The property appraiser does attempt to code and identify transactions that are not normal sales. There are over 40 codes for things from "atypical amount of personal property" to, as in the mentioned sale, "transaction between affiliated parties/family/corp." List of all disqualification codes here. For stats on this blog, unless I state otherwise, I use only MLS sales as there is more (still not 100%) transparency. Even with MLS sales, if a sale looks abnormally high or low, there is probably more to the story than the numbers reflect. We've seen developers record sales at numbers higher than the actual selling price by giving buyers a decorating credit at closing. We see other sales record at lower than actual selling price when personal property/furnishings get broken out of the contract and assigned an above market value on a bill of sale. That is one of the reasons that just one comp is not enough to establish fair value. Your single cherry-picked comp justifying your otherwise crazy asking or offering price means nothing to an informed party. If it doesn't look right, it probably isn't. [update]

Take-away: Be realistic about your expectations if seriously hoping to purchase in our market. Prices have not jumped significantly in most cases and, for someone who wants a Cocoa Beach getaway, purchasing slightly above the rock bottom will probably have little impact on the enjoyment of toes in the sand. I would also advise care in internet research. There is a lot of misinformation out there. Recorded sales prices don't always tell the whole story and claims on agent websites are sometimes misleading and always self-serving. The best deal in Florida real estate is free. It's a well-informed, experienced buyer's agent with no connection to the seller. Buyers of Florida real estate would be well-advised to find a buyer's agent they can trust and following his lead.

Today's buzz words; hydration, sunscreen and speed limits. Forget any of them at your own peril.

"I have made this letter longer than usual because I lack the time to make it shorter." ____Blaise Pascal

Saturday, June 30, 2012

June property sales

Today is the last day of June and most (but not all) MLS sales for the month have been posted. Single family home sales were very strong with 11 closed sales in Cocoa Beach and Cape Canaveral. Over half the homes were on the market less than 55 days. Five of the eleven sold for cash and seven were waterfront. Four were short sales and none were foreclosures. One of the short sales took only 35 days from contract to closing table. The longest took seven months to wade through the process.

We are left with 45 single family homes for sale this morning in the two cities. Of those, 27 are waterfront and zero are distressed (short or foreclosure).

It was another banner month for condo sales as well with 55 closed sales recorded as of this morning. Of those, 13 were short sales or foreclosures. Twenty sold for $100,000 or less and two closed for more than $500,000. 29% were on the market less than a month before selling.

Our MLS condo and townhome inventory is at 281 total units for sale in the two cities. Six of those are pre-sales in a proposed building. 27 units are asking over $500,000 and 28 under $100,000. Guess which ones will be gone first. Two thirds of the condo listings are in waterfront complexes. 12% of the total (34 units) are distressed with 11 of those in the Pier Resort.

There are 126 condo units currently under contract, half of those distressed.

We are seeing closed prices notching up in a few complexes. It seems a natural response to the supply and demand dynamic that is exerting itself once again with the abnormally low inventory. The disappearance of large numbers of distressed listings is also contributing. This may not be a duck but the waddling and quacking is beginning to look rather duckish.

While most of the country has been sweltering in the triple digits, Cocoa Beach has had a wonderful stretch of balmy weather after Tropical Storm Debbie passed over the state. Judging from the number of tracks I'm seeing on the beach, this looks to be a busy year for sea turtle nesting. Remember to turn your beachside lights off by 9 PM and make sure no light from your dwelling is visible from the beach distracting nesting turtles. I hope everyone enjoys the upcoming holiday and is safe. Hydrate and use your sunscreen. Cocoa Beach fireworks are on Monday the 2nd rather than the 4th.

"Do I contradict myself? Very well then I contradict myself. I am large, I contain multitudes." ____Walt Whitman

Saturday, June 23, 2012

Anatomy of a flip gone bad

As I was doing my early morning MLS hotsheet yesterday to see what new activity had been reported in Cocoa Beach and Cape Canaveral overnight, I noticed that a house I'd shown a few times over the years had closed. It was a 50 year old canalfront 4/2 with 1764 square feet in Snug Harbor. Knowing that it had been a while since I had first shown it I checked the listing activity to refresh my memory. It went something like this:

It was listed by the seller in the summer of 2005 after he purchased the house for $570,000. Hoping to flip for a quick profit he immediately listed at an asking price of $699,900. Less than a month later the price was jacked up to $825,000. Now remember in 2005 you couldn't turn around without hearing a story or news report about the new paradigm in real estate. Heck, even the National Association of Realtor's chief economist had just published in February that year a book entitled "Are you missing out on the real estate boom? Why home values and other real estate investments will climb through the end of the decade - And how to profit from them."  Perhaps the seller had just picked up a copy of the book. I wonder how many people's lives were ruined after reading David Lereah's ill-timed tome or listening to his NAR propaganda during that time. [edit] By the way, adding insult to injury, David Lereah followed up in spring 2006 with an even more damaging missive entitled, "Why the real estate boom will not bust - and how you can profit from it." Yikes.

In January of 2006 the seller lost a wee bit of his irrational exuberance and trimmed the asking to $779,000 where it remained until March when he brought the price back to where he started 10 months earlier, $699,900. In July, exactly one year since first listing, he reduced the price by $50K to $649,900. By Labor Day we were starting to see signs that the party in run-away appreciation might be winding down. The seller was apparently not paying attention and kept the asking price unchanged until February 2007 when he made a bold price reduction of $200 to $649,700.. Perhaps he was encouraged by NAR's new $40 million  advertising campaign "Now is a great time to buy (or sell) a home." At any rate, something happened and he chopped the asking price to $499,000 on April Fool's Day. This would have been just enough to pay his $450,000 mortgage and closing costs and escape with only the down payment lost. Unfortunately, by this time, similar houses were no longer selling for anywhere close to that price.

Apparently, still willing to accept a loss, he dropped the price again two months later to $479,000. It stayed there until October at which point, motivated by who knows what, he raised the price to $649,000 where it stayed for one month until coming back to $499,000 (our April Fool's price) in November 2007. It stayed at that price until March of 2008 when it was raised to $590,000 where it stuck until 2009.

Come January 2009 the price was reduced to $549,000 where it stayed for three weeks before being pulled back to the April Fool's 2007 number of $499,000. The seller apparently liked the $499,000 number as he stayed put at that mark for over a year until March of 2010 when he whacked the price down to $399,000 where it remained until October of 2010 when the listing expired.

It disappeared from the MLS at that point for a year until it came back on as a short sale asking $279,000 in October 2011. It had a contract within a month and finally closed yesterday for $240,000. The bank lost over $200,000 and the seller lost over $100,000 during his seven years of ownership. The original seller who sold the house to him in 2005 made a tidy $358,000 profit after owning the house for five years. Timing is everything.

"Like the ski resort full of girls hunting for husbands and husbands hunting for girls, the situation is not as symmetrical as it might seem"  _____Alan  MacKay

Thursday, June 21, 2012

By the numbers

Cocoa Beach and Cape Canaveral, where we are and where we've been.
Data from the Cocoa Beach MLS.

Condominium units for sale
June 2012 - 277 - down 50% from 556 units in June 2010
Pending sales - a whopping 136

Distressed condo listings as a percent
June 2012 - 13% - down from 56% of all condo sales in 2010

Months supply * - at most recent month's sales rate
June 2012 - 4.2 months - down from 10.9 months in June 2010
* this does not include pending sales

Single family homes June 2012
For sale - 46
Distressed - 1
Months supply - 3.3
Pending sales - 25

The high number of pending sales is due in part to the large number of previously contracted distressed sales working through the longer than normal contract to closing period. Over half of the pending sales are distressed. The rate of condo units going under contract was almost exactly the closing rate in the most recent month. That rate is holding steady with 43 condo units getting accepted contracts so far in June. The writing is plainly on the wall. Barring divine intervention during the summer the piper will be demanding his check by Labor Day. Might be time for local Realtors to be planning an extended fall vacation.

"You can deny reality; but, you cannot deny the consequences of denying reality." ___Ayn Rand

Thursday, June 14, 2012

Meet the buyers - again

We had quite the electrical storm over the ocean yesterday
The media has recently been reporting (yet again) about the large numbers of foreign buyers active in the Florida real estate market. I thought I'd get under the hood and extract the data for the Cocoa Beach and  Cape Canaveral market. I've been asked, incidentally, if there is a website or a function in our MLS that gives me these statistics with a few key strokes. Unfortunately, there is not. I have to manually wade through sales, either from the property appraiser or the MLS or both and look at each sale to get the numbers that I present here. If there was an automatic function in the MLS it couldn't be trusted anyway considering the manipulation by those entering the data. Example: days on market. Almost every day I see old listings withdrawn and relisted to set the DOM clock back to zero. At any rate, these numbers were extracted from the most recent 50 condo sales recorded on the Property Appraiser's site in Cocoa Beach and Cape Canaveral, 25 in each city with one bank Certificate of Title excluded for a total of 49.

It looks like those large numbers of foreign buyers are active elsewhere in Florida. Of the 49 sales I examined only four buyers were from other countries, two Canadians and two Europeans. Twelve of the buyers listed the property as their mailing address which usually indicates that it is for their primary residence. Of the 33 remaining, eleven were Florida residents, sixteen were from eastern states and six were from states west of the Mississippi.

While I was at it I thought I'd revisit the Property Appraiser's "market value" as compared to the actual selling price. The average variation wasn't as great as the last time I looked but the outliers were still extreme. One condo was valued by the PA at 204% of the amount that it actually sold for. Another had a "market value" that was only 51% of the selling price. The PA's average market value for the 49 sales was 81% of the selling price which is right in the range that they hope to be. However, as long as the ends of the scale are off by a factor of two, "market value" should be used for entertainment purposes only, the same as Zillow.

Total condo inventory this morning is 283 in the two cities. Thirteen percent of those are either short sales or foreclosures with eleven of the foreclosures in the Pier Resort complex. We're down to 46 single family homes for sale with a lone distressed sale in the mix.

Someone caught a mixed-up130 pound yellowfin tuna in 140' of water off Port Canaveral from a 19' boat last week. They fought the fish for four hours but finally landed it and brought it back to the dock to everyone's surprise. We usually have to go to the other side of the Gulf Stream for these tunas, a trip of 60+ miles each way, and a 130 pound fish is a monster. Yours truly made a freediving, spearing trip yesterday and managed his first mahi on the spear, quite the accomplishment, at least in his own little mind. We also got a hefty cobia and some snapper on the spears. Summer fun in Cocoa Beach and tasty fare for the families.

“It almost looks like we’re in cahoots in the sunshine,” CB commissioner Skip Williams