Sunday, March 26, 2017

There Will Be a Quiz

I skipped last week's summary so it's two for the price of one today. In summary, nothing much has changed with property sales almost exactly equaling new listings, a net zero effect on our meager inventory. For the seven days ending last Sunday, 23 condos and townhomes and 5 single family homes went under contract, six of them within a week of listing. During the same period there were 22 new listings.

In this most recent week, March 19 through March 26, there were another 24 new listings with 19 new accepted contracts, four of them in the first week on the market. There are 220 existing condo units and 66 single family homes for sale in Cocoa Beach and Cape Canaveral this morning. That is only slightly more than the number of properties that have gone under contract so far this year.

The Misunderstood and Often Wrongly-Administered First Right of Refusal

An unusual number of the condo transaction I've been involved in recently have been in first right of refusal complexes. There is a lot of misunderstanding about how this antiquated process works and how it should be carried out. From experience, I can say that it is often being done contrary to the procedure the condo docs proscribe. Procedures outlined in the condo docs vary among the dozens of local condo associations that have this right and the Board's or management company's interpretation of the docs is often wrong. First right of refusal gives the association and/or the members (owners) of the association the right to take over a contract to purchase from an outside buyer. For instance, if I contract to purchase a unit in a first right building, the association will offer my contract to the existing owners and they will each have the right to take my contract away from me and purchase the unit at the same terms. Some complexes mail a copy of the contract to all owners and some post it on a bulletin board or website. The length of time is usually between 10 and 21 days in our area. Most docs spell out that a sale to an existing owner is not subject to first right. There is a popular weekly rental complex in Cocoa Beach whose docs spell this exclusion out but the longtime management company insists on offering every contract out to the members regardless of whether the purchaser is already an owner in the complex. There are other complexes offering the right to members where that right only applies to the association and not individual members. I used to own in a complex with first right or so the owners thought. When challenged by a new purchaser, it was discovered that the first right did not and never had existed despite having been offered for over ten years. I would encourage everyone who owns in a first right building and especially Board members to read the condo docs carefully. There is a good chance that the procedure being used for the last two decades is wrong. It may be of little concern to an owner who is not involved in a dispute, but a lawsuit over the interpretation may prevent that innocent owner from being able to sell her unit.

And on another well-worn topic, I continue to receive requests to hold escrow deposits at title companies from agents who should know better. If there is an agent or broker out there who has a good reason for wanting a deposit held at a title company rather than a real estate broker's escrow account, I'd love to hear it. I'll give you a hint; there are none. In the event of a rare dispute over a deposit, I'll take a State of Florida free dispute resolution any day over dueling lawyers.

“We try to abolish intervals by our manic insistence on keeping busy, on doing something. And as a result, all we succeed in doing is destroying all hope of tranquility. You have to learn to immerse yourself in the silences between.”  ____from a book I read years ago that changed my perception of and the direction of my life. Thank you Lyall Watson for writing Gifts of Unknown Things

Tuesday, March 14, 2017

It Fell and Can't Get Up

You know you're in a beach town when the front rack of DVDs at the public library is all surf flicks. Cocoa Beach Library DVD room pictured.

Will the Cocoa Beach and Cape Canaveral real estate market ever return to a healthy supply of properties for sale? I hope for more inventory but I'm not optimistic. Our historical supply peak was in 2006 when we had just under 1200 condo and townhouse units for sale. The long decline began the following year with short sales and foreclosures dominating activity and continued dropping through 2015 when we bottomed at less than 200 units for sale with the distressed inventory depleted. We are only slightly above that number at present with 222 existing units for sale. At the sales rate we averaged last year, we have enough inventory to make it to mid-July. There were 24 new condo listings in the week from Sunday March 5 through March 12. Seventeen units were contracted during the same seven days. There does not seem to be anything suggesting an increase in the supply in the foreseeable future. Barring external events this should continue to urge prices higher.

There are 46 direct ocean units with a view currently available, over half asking above $500,000. Lookers are out in droves but are having an increasingly difficult time finding fairly priced listings. Sellers are listing properties above fair value and hoping for a home run. Over 60% of the total listings have been on the market over 60 days, a clear sign of overpricing in a year when two out of five sold properties were on the market less than a month.

I think it's safe to expect prices to continue to rise in the near future. Slightly higher mortgage rates seem unlikely to impact sales with 60% of all condo sales so far this year having been paid for with cash. Things are only slightly different with single-family homes, 40% of those purchases this year paid for with cash. Good hunting if you're looking. Know that you're not alone and need to be ready to move quickly if you hope to succeed in your search.

"it’s a lot of work not being cynical. Sometimes it just ****ing sucks. Because you have to listen to both sides of every argument – ARRRRGHHHH! All the time it takes, damn!"  ___Henry Rollins

Tuesday, March 07, 2017

February Roundup

Real estate activity in Cocoa Beach and Cape Canaveral continued at the same steady pace last week with 28 residential properties going under contract in the week from Sunday, February 26, to March 5. Six of those were on the market for a week or less. The inventory was barely changed with 27 new listings hitting the MLS during that same seven-day period.

There are currently 66 single family homes for sale in our two cities, exactly half of which have been on the market for less than two months. There are 244 condos and townhomes for sale, 27 of which do not exist yet giving a prospective buyer a universe of 217 existing units from which to choose. If an oceanfront building is a must-have, that number shrinks to 89 units with a median asking price of $375,000. A buyer looking for a direct oceanfront unit with at least two bedrooms and two baths asking less than $300,000 has two possibilities, both ground floor.

Closed sales for the month of February 2017 were considerably stronger than the same month a year earlier with 42 condos and townhomes closed, 40% of which were on the market less than a month and half of which were purchased with cash. Sixteen single family homes closed in February with a median time on market of 80 days. A third were purchased with cash.

The routine has not changed for those hoping to purchase. Have your financing and/or cash in order and be ready to move quickly when an attractive target presents itself. The best properties are going to those who act quickly. Our ongoing inventory shortage is showing no signs of abating.

After two days of temps in the 50s our winter that wasn't resumed with daily temps in the mid 70s to high 80s. The pleasant weather has made for crowded and slow conditions on the always packed (this time of year) Cocoa Beach golf course. For maximum enjoyment, golfers are advised to bring plenty of patience. The foursome in front will almost certainly be scavenging balls from every water hazard along the way slowing the pace even more.  After Easter, it's "back to good" to quote Matchbox 20.

Here am I floating
round my tin can
Far above the Moon
Planet Earth is blue
And there's nothing I can do.  __David Bowie