Saturday, March 28, 2015

Contraction, My Brother

My old companion, the corn plant (Dracaen fragrens) bloomed again this year for the third time in the last four years. This hardy plant has been with me for over 20 years. It is apparently rare for an indoor specimen to bloom. According to Wikipedia this African native helps remove indoor air pollutants and is very tolerant of neglect. For the week or so that it blooms, my house smells like the Chanel facory.

Inventory of condos and townhomes is down to 240 units in Cocoa Beach and Cape Canaveral. Over half have been on the market since last year, many for years. Two thirds of the single family homes in the two cities have been for sale since last year or before. The new listings that are priced anywhere near fair market value are selling immediately. The overpriced ones stagnate and contribute to making the inventory numbers far less dire than the reality. The reality is there are very, very few properties that are attractively priced. Buyers need to accept that they may need to be patient and, at the same time, ready to move when a good target has been acquired.

Of the 64 single family homes for sale, a third of the offerings are above $500,000 and a third are asking less than $385,000. About half are waterfront. There have been four new listings since March 1. During the same time seven have gone under contract. Both definitions of contraction are at play here.

There have been 26 new condo listings since March 1 and 55 closed sales. In the same time there were 37 newly accepted contracts. Of the accepted contracts a third contracted within four weeks of listing. There are only thirteen foreclosed and five short sale units on the market today. The distressed property dynamic is all but finished in our market.

There were a few interesting, attractively-priced  new listings this week. They included:
  • A 14 year old 3 BR, 2.5 BA townhome on the Cocoa Beach Golf Course with a two car garage asking $235,000. 
  • A cute, remodeled and fully furnished one bedroom unit in an oceanfront building asking $135,000.
  • A ten year old 3 BR, 2.5 BA Majestic Bay townhome with 2307 square feet and a two car garage for $225,000.

Weather has been wonderful this month as we are winding down to the end of snowbird season. The first and largest wave of the northward migration begins Tuesday as those with leases ending March 31 hit the dusty trail for home. Spring break is finished for the majority of schools but we'll continue to see a few stragglers and a handful of lingering snowbirds through the middle of April. It will soon be possible to shop at Publix without protective pads and a drive to the Port for lunch won't take half a day (unless, of course, one wants it to).

Potential buyers, Drop the mouse! Do not click on the "More Information" button next to the listing on Zillow, Trulia, Homes or or any other real estate website. Your info is going to be sent to as many as four self-proclaimed "expert agents" or, even worse for you, the listing agent. Some sites will send your info to an agent who has agreed to pay a huge chunk of the eventual commission to the company operating the website as a referral. That much reduced paycheck in no way is good for you.

You do NOT want the listing agent or one of her staff  writing an offer for you. You'd be better off with some dufus who paid Zillow for your info representing you than the listing agent or another agent from her office. They are prohibited from advocating for you in the deal. That dufus (or me) can battle for the best deal for you with no regard to what is best for the seller. Dufus might not have the experience or skills to do the best job but the law doesn't stop him (unlike the listing agent) from trying. A buyer's strongest play is to have a buyer's agent who is representing only them. We are not hard to find but Zillow or the others are not the place to look.

"A man who doesn't care about what he looks like, he's applauded. We say, 'Oh, he's not superficial.' I, myself, am deeply superficial."  __Fran Lebowitz

Wednesday, March 18, 2015

Don't Say That. Really.

For most people that I encounter in real estate transactions, buyers and sellers alike, removing emotion from the process is difficult. It's easy enough to intellectualize that emotion shouldn't be a factor but it manages to intrude in a large number of negotiations. An irrational, emotional response from the other party can often drag an otherwise rational person straight into the mud and reduce or kill chances of success.

There are an number of self-defeating trigger phrases that can get that response. I've seen the phrases below derail many negotiations over the years that otherwise stood a good chance of reaching agreement. A person hoping to buy or sell property (or most any other thing) would be wise to resist uttering these phrases or adopting these mindsets. At the end of the day, the buyer and the seller decide what they are willing to accept or pay.

"I will not play games." - I hear buyers say this often, especially in multiple offer situations. Guess what? Negotiating is a game. You can't win without playing. Offer what you're willing to pay and take into consideration everything that the other party is telling you. Withdrawing because you "won't play games" only guarantees that you won't get that property. Your initial offer may very well be enough.

"I'm not going to give it away." - Consider that your idea of "giving it away" might be at exact market value. Our robust market is more than willing to give you market value or above. That is never "giving it away" even though it might be less than you paid at the market peak.

"The offer is too low. I'm not going to respond." - Unless you are firm at your asking price, always respond to an offer. Most buyers can't help themselves from making a first stab at trying to get the property for less than market value, sometimes with a stupid low offer. I've seen crazy low initial offers work their way up to a number that was acceptable to a seller. Respond to lowballs as if they were good offers. You decide how much to counter. Keep the buyer in the game until they have demonstrated that they won't get near your number. The initial offer is an invitation to begin the negotiations.

"I will not pay full price." - I've been asked many times what percentage of asking price the first offer should be. There is no magic percentage. As I've related before, full price at Target may equal exactly the final price at Macy's after the sticker markdown and additional discount at the register. Know what any property is worth before you offer. Full price can be a good and fair price. While you're screwing around offering a set percentage off asking price, another buyer may have recognized that it's priced right and offered the fair full asking price.

"If they won't include the (fill in the blank) the deal is off." - If the Sonos sound system wasn't included in the listing don't include it in the offer. I've seen buyers walk away from a fair price on a property because the seller wouldn't include furniture that was never intended to be included. Keep your eye on the ball and don't complicate your offer. You can always get a sofa.

"Not a penny more." - Really? So if the seller's mental walk-away number happens to be $100 above your "not a penny more" number, you don't want this house that is exactly what you're looking for (your words). This phrase tells the seller to not even try to compromise somewhere between his last number and your take-it-or-leave-it number. Not a smart strategy. Stay in the game until it works or it doesn't.

"Not a penny less." - Same as above. It's a dare that pride will not let many people accept. You can just as easily make your counter without adding the end-of-negotiations phrase.

"I would have paid that." - This is a good one. You couldn't have paid that without even offering. This is usually in response to a property going for well less than asking. The seller's agent probably already told them that their asking was too high but they didn't listen and clung to the too-high asking price. When the fair offer came in, probably with justifying comps, they accepted reality and the offer. This goes back to knowing what a property is worth. Your buyer's agent can include comps with your offer to demonstrate to hard-headed sellers that your offer is on the money. Solid comps from the buyer's agent with the offer will often swing the tide. Note: If there aren't comps to justify a lowball, don't try to manufacture a justification with irrelevant comps or the Property Appraiser's or Zillow's idea of value. Knowledge and negotiating skills, have them and use them.

How 'bout this weather. Summer came early this year. Back up to 85 again today with light west winds and continued clear blue skies. This has been the busiest March in Cocoa Beach in my memory. I suppose cold weather in the north and low gas prices have contributed. This past weekend, in addition to the usual venues, there was live music in the Juice and Java parking lot and the Mai Tiki complex. The stray spring breakers wandering around downtown Cocoa Beach must have thought they'd found Florida's Bourbon Street, with live music in over a half dozen places in a one block radius. Monday morning, the streets and parking lots (ours included) downtown looked like there had been a heavy snowfall of trash. We had it all cleaned up and ready for the next onslaught by noon. Three more weeks.

"This land is your land and this land is my land, sure, but the world is run by those who never listen to music anyway."  ___Bob Dylan

Friday, March 13, 2015

This Week's Best New Listings

These are the best or most compelling (in my opinion) new listings in Cocoa Beach in the last seven days. None of these are my listings but I'm happy to show any of them. Contacting a listing agent directly on any listing will have you unrepresented and possibly at risk in the transaction. A buyer's agent, whether me or someone else, will not cost you anything except in very rare circumstances agreed to in advance and you will have full representation (unless the buyer's agent is also from the listing agent's brokerage). There were no new listings in Cape Canaveral that I thought deserved mentioning.

  • Big 1st floor bank-owned 2/2 condo, 1432 sf, east of A1A but not direct oceanfront. Asking $147,900.
  • Fully furnished 2nd floor 2 bedroom, 1 bath, one block from beach, low monthlies. Asking $129,900.
  • Updated 2nd floor 2 bedroom, 1 bath in oceanfront complex that allows short term rentals. Asking $143,500.
  • Totally and nicely remodeled 2nd floor, 2 bedroom, 2 bath in oceanfront building with ocean view. Asking $224,900.
  • 1st floor 2 bedroom, 2 bath Sand Dollar floor plan, garage, Stonewood D bldg. Asking $259,000.
  • Totally remodeled single family 2 blocks from beach 3 BR, 1.5 BA, 1545 sf, tropical landscaping. Asking $225,000.
  • Updated Cocoa Isles single family 3 BR, 2 BA, 1240 sf, 2 car. Asking $239,000.
  • Single family 3/2 pool home five blocks to beach, 1280 sf, 2 car. Asking $289,000.
  • 14 yr. old South Cocoa Beach 2nd floor 3/2 corner in Banana River building with ocean and river views, garage, 2364 sf. Asking $289,900.
  • 7 yr. old luxury 4 bedroom, 3 bath canal home, 3025 sf, pool, dock, boat lift, 3 car. Asking $799,900.
  • 8 yr. old 5 bedroom, 3 bath single family across the street from the beach 3555 sf, pool, 2 car. Asking $729,000.
It's the perfect storm for traffic right now. Peak snowbird population, spring break, Bike Week in Daytona and cold weather up north. Be careful on the roads and expect to move more slowly than usual. Have patience. It will all be over in a few weeks.

The cobia are running a little late this year but are starting to show up in small numbers. Meanwhile the tasty tripletail are here en masse for the spring spawn. Look for them close to shore under seaweed or floating debris and present a live or artificial shrimp on their nose. This week I saw leatherback turtles, loggerheads, manta rays and a rare ocean sunfish in addition to cobia and tripletail. I also heard reports of a couple of great whites being spotted. For anyone wanting to fish, now is a great time to book a nearshore charter. The catch of a lifetime might be waiting. Worse case scenario, a great day on the water in the real Sea World.

"I have exactly as much rhythm as you think I have."  ___John Oliver

Sunday, March 08, 2015

Lost an Hour

Good morning Daylight Savings Time. More daylight at the end of the day makes most Cocoa Beach folks happy although the later sunrise means before work/school surf sessions are abbreviated if not impossible. Nothing is without its cost.

Thinking about the time change this morning I went back and read a post I did the morning after the time change in 2012. Let's compare Cocoa Beach market conditions then and now. At that time we had bounced off the bottom in prices but distressed sales were still a large part of the activity in residential real estate sales. We were still doing the time change at the end of March back then so I've compared activity from January 1 to March 8 in 2012 and 2015.

These stats are for the period from January 1 through March 8.

Asking price <$100,000
2012 - 19 sold, 42% of them distressed - inventory 53 units, 36% distressed
2015 - 25 sold, 24% of them distressed - inventory 26 units, 19% distressed

Asking price >$400,000
2012 - 7 sold with 0 distressed - inventory 44 units, 0 units distressed
2015 - 8 sold with 0 distressed - inventory 55 units, 1 unit distressed (short sale) 

Sold units in all price ranges
2012, _90 units, 29% of them distressed.
2015, 109 units, 17% of them distressed.

For sale inventory
2012 - 350 units, 16% distressed
2105 - 259 units, _7% distressed

The condo inventory has hovered in the 250 unit range for a couple of years now. It peaked at just under 1200 units in 2006 and stayed at abnormally high levels during the crash years fueled by the high numbers of distressed sales. With the bulk of the troubled properties already flushed through the system, I don't think there is any reason to expect inventory to get much above the current number in the near future. I think we'll continue to see the number of distressed sales shrink as the banks dispose of their last remaining beachside properties. Single family home trends are closely mirroring condo trends.

I was fortunate to attend a get-together with my Mom of three lovely members of the 2nd grade class of 1933 this week. Inventory that year of Cocoa Beach condos was holding steady at zero where it would remain for decades. We wouldn't see a short sale for the next 74 years.

A strange thing happened in Cocoa Beach last week. A Waylon Jennings song was performed live at a local venue. The young country band Radio Romance from Nashville slipped it into their lineup of mainly originals at Juice and Java downtown. They wowed the unsuspecting, raised-on Buffet and Zepplin crowd. They'll be back for a repeat on March 20. I recommend trying to catch them, no matter your musical comfort zone.

"Is Neil Young the greatest singer in the world? No, he's not, but he's Neil Young, ain't he? And I've heard a billion covers of "Like a Rolling Stone," and they're all shit. You want to know why? Because Bob Dylan ain't singing it." __Noel Gallagher