Friday, October 16, 2015

3Q - The Year On The Beach So Far

How is the real estate market doing in Cocoa Beach and Cape Canaveral? I get this question more often than "How have the waves been?" or "Catching any fish?" Based on personal observation I would say the market is the most active it's been in ten years. After crunching the numbers, that impression is confirmed. Comparing sales in the first three quarters of the year for the last ten years, 2015 tops the list with the highest number of closed MLS-listed residential properties. What other trends are we experiencing? Let's dig a little deeper.

The number of property sales in our two cities peaked in 2005 with a sharp dropoff in 2006 that continued until flattening in 2008-2009. I graphed condo and townhome sales only because they make up the majority of residential properties in our cities. Single family homes sales mirrored the trend in condos. Prices continued to fall for most properties for a little longer before stabilizing. From 2009 sales activity began rebounding and has increased every subsequent year.  Note that 2014 finished higher than 2013 even though we were lagging at the end of September that year.

Prices have been steadily creeping upwards for most properties since around 2010 although there are pockets that haven't moved as much as others. Condo complexes that experienced heavy investor buying during the boom years took longer to stabilize. The years of distressed sales in Cocoa Beach and Cape Canaveral have ended. There are no bank-owned nor short sale single family homes for sale in either city this morning. Only nine of the 190 condos and townhomes for sale are bank-owned AND all of us; buyers, sellers, real estate agents and title companies, should be celebrating the fact that there is but one short sale listing of any kind here today.

In the first three quarters of 2014 there were 118 single family homes closed in the two cities. Only two were short sales and 17 were bank-owned. Fifteen houses (13%) closed for $500,000 or more. This year sales increased by 14% with 135 closed through September. None of them were short sales and 16 were bank-owned. Thirty houses (22%) brought $500,000 or more. There are 55 houses for sale this morning with zero short or bank-owned offered.

From January 1 through September 30 of 2014 there 523 closed condos and townhomes. Distressed sales (short and bank-owned) made up 17% of the total. Seventeen units or 3% of the toal sold for $500,000 or more. 2015 saw activity increase by 8% with 564 units closed in the first three quarters. Distressed sales accounted for 13% of the total and $500,000 and above sales held steady at 3% (19 units) of the total. Inventory this morning is 190 units which is just over three months supply at the current sales rate.

Our takeaways:
Sales are increasing even as inventory shrinks (two thirds what it was just two years ago). New listings are being sold as fast as they are coming on the market propping up the activity for the moment. As is to be expected, with demand exceeding supply, price momentum is upward. Let's hope new lsitings don't dry up.

Short sales and bank-owned properties are no longer a factor in our beach market. Price direction (up) is reflecting the absence of these properties. Sellers are in the power position at the moment so buyers should negotiate accordingly. As is the case in any market, many are unrealistic about the value of their property and those will have to be ignored until they accept reality. The sales numbers tell us that many others are realistic. Those buyers and sellers who understand fair value and are willing to accept it can complete a successful sale/purchase. Any agent familiar with our market can approximate fair value for a property here. Speaking of; Beware the expert from afar. Zillow may be willing to sell an agent space on the "Search for a Cocoa Beach Agent" page but it's safe to say that three quarters of the 250 "Cocoa Beach Experts" displayed there probably can't distinguish high tide from Tide detergent and would have to consult Google maps to find Indian Creek Drive on their drive over from their office in another city. How's a consumer to know? Easy. Where is your office? If there is a bridge between that office and the

"When kids hit one year of age it's like hanging out with a miniature drunk. You have to hold onto them. They bump into things. They laugh and cry. They urinate. They vomit."  __Johnny Depp