This is one insider's unpolished take on the current state of the Cocoa Beach and Cape Canaveral, Florida real estate market. I am a licensed agent and partner with Walker Bagwell Properties. My sometimes blunt opinions here are not welcomed by the real estate mainstream. Whatever. Hopefully my insights will allow you to make better decisions about your participation in this market.
Larry Walker - 321.917.5786 - email@example.com
Saturday, April 28, 2012
Clarification, my brother
Another much-discussed subject is that of a predicted tidal wave of soon-to-arrive inventory. I can't comment on any bank's backlog of to-be-foreclosed loans as I don't have access to that info if they haven't filed a lis pendens. As Local Appraiser mentioned we can get a feel for the number of troubled owners in a complex who may be in trouble by searching for HOA liens which, in most complexes, will be recorded before a lender gets around to filing a lis pendens. Looking at one large 8 year old complex that we have discussed often we find that the association filed it's first lien for unpaid association dues in 2007. The history of this association's liens and MLS foreclosure sales is charted below. The correlation between HOA liens and foreclosure sales is obvious. There are three foreclosed units under contract at the moment with no others actively for sale. There are less than five unsatisfied liens besides the three foreclosed units under contract. Interestingly, this particular complex had it's own little mini-flood of foreclosures dumped on the market in two separate groups. The last group sold for about 20% more than the first group. As always, draw your own conclusions.
This brings up another point, the idea of a "market" that behaves in sync. Ours does not. The dynamics are entirely different in a complex that was completed at the peak of prices. Example: Mystic Vistas, Portside Villas, Sea Spray Townhomes, Meridian, Oak Park, etc. Because these units closed when prices were highest, every owner found themselves with a unit worth less than their purchase price within a year or two of purchase. By 2009 those who bought with a low down payment mortgage found themselves owing more than their units would sell for. Their options were; keep making payments on a depreciating property, short sale,default or sell for a loss and write a check for the difference. The ones who paid cash had the bitter luxury of being able to wait for a rebound or selling for a loss and moving on.
In complexes that were completed before the run-up of prices in the mid-2000s the dynamic was, and is, far different. Except for units that turned over during the peak years or were refinanced, the pressure to sell didn't exist. Prices did retreat in these complexes as the market cooled but at a far lower rate than the new complexes. We saw prices retreat by over 70% in some of the new buildings while some older complexes had declines of less than 30%. These older buildings are likely to have far fewer foreclosures going forward and consequently less downward pressure on prices. My point is that a flood of foreclosures, should it come, will not be equally spread among complexes and will not have equal effect. The "average" would be affected but no one buys or sells the "average".
For the record, I maintain my opinion that we will not see a flood of new foreclosures in Cocoa Beach and Cape Canaveral. The declining incidence of HOA liens seems to support the fact that there isn't a massive group of troubled owners that are freeloading on the bank's dime. Maybe there are hundreds of condo owners in default who are current on their HOA fees. I tend to agree with Local Appraiser that, whatever the number of properties that will be foreclosed, they will be not be dumped on the market at once. The banks find themselves in a good position of very low supply and can use that just like they did at Mystic Vistas to get higher prices. I could be wrong but I'll be happily wrong at the beach with my toes in the sand. Thanks to all those who commented (especially Snowy and Local A) for the spirited discussion. I gladly entertain dissenting opinions and other's research.
"Nothing in life is quite so exhilarating as to be shot at without results." ____________Winston Churchill
Friday, April 20, 2012
Single family home inventory is in a similar shrinking trend with a total inventory in the two cities of 65 homes for sale. Only 6% are distressed, four short sales and no foreclosures. Buyers with specific criteria have a very small basket of matching properties from which to choose. One consequence is an increase in the frequency of multiple offer situations. A note to buyers here; if your buyer's agent tells you that there are other offers on a property you want, don't assume the listing agent is playing games. If you want the property, stay engaged. Withdrawing or not offering because you distrust the Realtors involved doesn't accomplish anything other than eliminating a property from your list. With the abundance of lowball offers floating around, the fact that there are multiple offers may have no impact on your eventual purchase price. One of my clients was the winning offer this week at 83% of asking price in a three offer situation. Keep in mind.that, while distrust of real estate agents is a healthy thing, some of us can be trusted. Blanket distrust can be counter-productive to your goal. As I've said before, if you don't trust your agent, get another one.
"Weaseling out of things is important to learn; it's what separates us from the animals...except the weasel." ___Unknown
Friday, April 13, 2012
Low and outside - batter walks
March 1 through April 13
2009 - 12 units closed - High $/square foot $286 (new Meridian corner)
___________________Low $/square foot $158 (foreclosed Almar)
___________________Average $/sq. foot $214
2010 - 8 units closed - High $/square foot $253 (Cape Winds corner)
___________________Low $/square foot $122 (foreclosed Ocean Club)
___________________Average $/sq. foot $216
2011 - 9 units closed - High $/square foot $272 (Michelina)
___________________Low $/square foot $163 (short sale Las Palmas)
___________________Average $/sq. foot $213
2012 - 12 units closed - High $/square foot $272 (new Ocean Cove)
___________________Low $/square foot $108 (ground floor La Mer)
___________________Average $/sq. foot $191
In April 2009 our total MLS-listed condo and townhome inventory in Cocoa Beach and Cape Canaveral was at 700 units with 36% (just over 250) of those distressed (short sales or foreclosures). Our inventory this morning is less than half that at 346 total units for sale with 15% (52 units) of those distressed. In the three years being discussed our inventory has been halved and the number of available distressed sales has been reduced by 80%. Those buyers who've been waiting for that screaming deal foreclosure or short sale have a much smaller pool of possibilities and greater competition from others who have found themselves in the same position.
Take away: The days of expecting to score with a crazy lowball offer are, for the most part, behind us. For buyers hoping to purchase a condo, there are still some very nice units at very attractive prices, just fewer than in the recent past. I would advise offering a fair price in line with recent comps if you find something you like. Throwing unsupportable lowball offers is a recipe for frustration. By the way, Apple closed yesterday at $622. I'm still waiting for my $110 order to be filled.
"Did you ever feel like a plastic bag,
drifting through the wind,
wanting to start again?"
Thursday, April 05, 2012
Spring forward - [updated]
|Mother and baby ducks at CB golf course|
Higher priced units were strong in the month with sales closing over $390,000, the highest, a new 4th floor NE corner Ocean Cove in south Cocoa Beach that sold for $750,000 with a 2 car garage. Fifteen of the 52 sales closed for less than $100,000. Inventory of condos and townhomes in the two cities stands at 350 total units this morning, a record low since I've been keeping records. Distressed sales (short and foreclosures) make up 16% of the total, the lowest level since the first short sale appeared in 2007. There are 53 units asking less than $100,000 with 36% of that price range distressed. In the over $400,000 range there are 44 active listings with none distressed.
Sales of note included;
[added] Two more Villa Verde super luxury 2875 square foot, 3 bedroom, 3.5 bath units in south Cocoa Beach recorded for $360,000 and $375,000 although the price paid was probably less than the recorded price with a buyer credit going back to the buyer at closing.
A 3rd floor direct ocean Meridian 3/2 that sold for $555,500. It sold new in 2007 for $699,900.
A 4th floor SE corner Emerald Seas 3/2.5 with 2394 square feet sold fully furnished for $435,000.
A 2nd floor 3/3 Magnolia Bay with 2552 square feet and a 2 car garage closed for $435,000 and a 3rd floor 3/3 with 2180 square feet and 2 car garage sold for $395,000.
A south facing oceanfront 3rd floor 3/3 Michelina short sale with 2325 square feet and a 1 car closed for $405,000. Sold new in 2006 for $695,000.
A 12th floor direct ocean 2/2 Stonewood foreclosure sold for $263,000. This same unit sold for $475,000 back in 2005.
A remodeled 4th floor direct ocean Sea Era Sands 2/2 with 1409 square feet and a one car garage closed for $260,000 just $3000 more than the selling price 11 years ago before it was remodeled.
A remodeled 4th floor direct ocean Park Place 2/2 in downtown Cocoa Beach with a 1 car garage and 1316 square feet sold for $255,000.
A 5th floor Canaveral Towers 3/2 with 1417 square feet, two ocean balconies and carport sold furnished for $250,000.
And, shocker, the short sale 4th floor 2/2 at Wavecrest in south Cocoa Beach that I wrote about back in August as likely never to get approved closed for $230,000. Not bad for 1568 square feet and garage in a good building. There was $846,000 owed to two banks plus unpaid taxes and unpaid condo fees. Incidentally, the buyer paid an additional $5000 (approximately) to one of the lenders to get the deal done.
A 6 year old direct Banana River South Beach Cays 4 BR, 3.5 BA with 2611 square feet, boat slip and a 2 car garage sold for $195,000.
A fully furnished top floor (5th) direct ocean Shorewood 1/1 with 868 square feet and 1 car garage sold for $205,000.
A 2nd floor 2/2 direct river River Lakes with garage closed for $153,000.
A direct Banana River 4th floor Harbor Isles 2/2 with 1308 square feet and garage sold for $150,000.
A 1st floor north facing weekly rental Sandcastles 2/2 with 1286 square feet and garage sold for a shocking $140,000.
Two short sale 6 year old Bayport 3/2 units with 2032 square feet and 1 car garages sold for $159,900 (4th floor) and $142,900 (3rd floor).
A Brisa del Mar 2/1 on Ridgewood that sold when freshly converted to a condo in 2006 for $195,000 sold as a foreclosure, this time for $61,000.
A 6 year old Portside Villas 2nd floor 2/2 with 1211 square feet and open parking closed as a short sale for $77,000. Sold new in 2006 for $183,900.
A 2nd floor 2/2 Oaks of Cape Canaveral with 1050 square feet and open parking closed for $57,900. It was not a distressed sale.
It's that transition time of year in Cocoa Beach. The first big wave of departing snowbirds left this past weekend. There are still a few around as well as a few lost spring breakers but by next week it'll be time to roll up the sidewalks and spread the sand back over our paved roads. It's the beginning of that nine month season when it's possible to show up at the Cocoa Beach Country Club Golf Course without a tee time or drive the length of town catching all green lights. Or park right by the front door of the Publix Supermarket any day of the week.
The fishing has been good, if spotty, with a lot of very big kingfish and small numbers of decent cobia being caught. The lack of a winter this year has the migratory fish like cobia completely confused as they typically migrate along a specific water temperature break.
"Most people are other people. Their thoughts are someone else's opinions, their lives a mimicry, their passions a quotation." ___Oscar Wilde
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