Tuesday, July 18, 2017

Running to Stay in Place

The routine summer flatness prompted me to offer a contrast of that lake of an ocean that summer visitors see. The webcam screen grab above was during an epic hurricane swell at the Cocoa Beach Pier years ago. Most visitors have never seen our surf in such form but it does happen and more often than most would think. Regretfully I have no shots of the Halloween swell of 1991 from the Perfect Storm off New England. All my shots of that one are biologically stored and unavailable for publication.

Another year already half gone. Despite the tight inventory of properties for sale in Cocoa Beach and Cape Canaveral, the first half of July has been strong. Forty two  condos and townhouses have gone under contract in the first 14 days of the month, a quarter of those on the market less than two weeks. Activity was spread across all prices with the median at $225,000. During the same two weeks, eight single family homes were successful in getting a contract.

As of this morning there are 69 single family homes on offer in the two cities at prices between $3 MM and $274,900 with a median of $530,000. Inventory of existing condos for sale has declined to another all-time low of 190 total units offered at prices between $1.45 MM and $79,751. At the current sales rate, that is a 64 day supply.

While prices are responding to the tight supply by continuing upward, many of the current listings are overpriced. Whether buying or selling, knowledge of fair current value goes a long way towards securing a contract.

Enjoy the vacation. I am.

"There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat." __William Shakespeare


  1. Low inventory may be the reason one very large broker with over 50% of new Cocoa Beach listings won't even respond to offers. I've made two offers on separate condos through this particular broker and both didn't even receive the courtesy of a response. I guess that's due to their "Lifestyle"

  2. Was it just that the seller didn't counter or that the agent never acknowledged receipt of the offer? Your agent should have gone to their office in person if it was the latter and asked for a response. Low offers in this environment are increasingly getting the "no counter until you offer closer to asking price" responses. It's a byproduct of the demand/supply skew.

  3. This broker tends to overprice their listings. My offers were based on accurate "comps". The broker did acknowledge receipt of the offers but I have no way of confirming they were presented.

  4. Care to post the MLS numbers? I'll post my opinion of current fair value.

  5. Bingo. Agree that both are over-priced. Will run comps this afternoon and post my best guess at current fair value. The first one will use different comps as it's a weekly rental with much higher income potential BUT over $300 a foot for a mainly original condition unit, south facing, no washer and dryer and without a garage is quite a stretch.

  6. Here you go:
    First I'll comp the weekly rental unit. I find eight 2/2 oceanfront weekly units closed in the last six months. Only three are over $300 per square foot and those three were the best units in their respective complexes, all top floor east facing corners, two with extensive remodeling and two with garages, all with washers and dryers in the unit. (I represented the buyers of two of these) The remaining more similar of the six comps all closed for between $240 and $262 per foot. At the top of the range of these best six comps, our subject would be at $299,000 before adjustments for lack of a garage or washer and dryer in unit, or condition and $275 at the bottom end. Based on these comps my seat of the pants guess at fair value taking into consideration our tight inventory is a fair current value of somewhere in the $275,000 to $290,000 range for this south facing unit. There might be a frustrated buyer out there who is tired of looking and willing to pay more just to get a weekly unit with a great view in a good building.

    The second of your listings is easier to comp. There are over a dozen good comparable sold units in recent months. East facing units of similar size in similar remodeled condition with garages in buildings with a one month or more minimum rental have been selling in the $278 to $311 per square foot range. That would put this one between $337,000 and $377,000. I'd make my bet at the high end of that range somewhere around $360,000 to $375,000 as fair current value. Again, same caveat; a frustrated buyer in a rising market might be willing to slightly overpay to secure a good unit in a good location knowing that time will erase the initial overpayment.

    Good luck in your search and know that a rising market favors the buyer.

    1. I would be interested in your opinion on the value of MLS listing #789661

  7. Looks like a nicely remodeled unit with somewhat of an ocean view that includes a lot of the Atlantique building next door. No garage and the monthlies are high at $525. This one is harder to comp because it's big for a 2/2 and the discount for the compromised view is difficult to quantify but we have recently sold units with better views of similar size in newer buildings with garages that have closed in the low $200s per foot. Once again a seat of the pants guess would put this one below $325 before I'd feel comfortable and as a personal purchase well below that. I'm not crazy about the building at any price. Just my opinion. The people who live there may love it.

  8. Hi Larry. I read your blog witb interest because I will purchase the 1200 square foot unit at Flores de la Costa, and we are making decisions about upgrades. Assuming a base price of 350000, what do you feel is a reasonable extra amount to pay for upgrades assuming we intend to rent it on a limited basis. We like nice finnishes and are upgrading the cabinets, flooring, and some faucets. It might total 25000 or so. Are we overdoing it? Thanks for your advice.

  9. I like that project and especially the two week minimum rental period. At $350,000 the base prices are attractive for brand new units. I think I'd personally spend the money to get the finishes and fixtures I wanted (within reason). Having said that, $25,000 seems a lot for upgrades on a 2 bedroom unit. Must be very much nicer stuff than the base. Of course, by the time you close, there's a good chance the unit will have appreciated enough to cover the cost. Good purchase.

  10. Hello Larry, I have been following your blog for a while now and really enjoy it, thank you! I have a similar question if I may, on two units I am interested in, in oceanfront condominium. I have now made an offer on both units, a NE corner, and a SE corner, both quite dated but the NE corner more so, no recent updates, stuck in 80's mode. Have had some concerns on whether the agent even presented the offers to the seller, no counters made. Has had many listings in building, many which listed high initially sell much lower than asking, eventually. Would love to hear your thoughts on fair market value on these two units and whether overpriced and what would be reasonable expectation in this market to acquire property for. The MLS #s are as follows:


    Thanks in advance!

  11. I knew which building you were talking about before looking at the MLS. One of those units has had quite extensive updates done. including walls removed. Whether the agent presented your offers or not, who knows? I have had clients tell me "don't even bother me with an offer below $X". If yours was substantially below asking that could be the case. Did the agent offer any response at all? Were your offers in writing? I'll run some comps and post my opinion in a response to follow later today.

    By the way, if you like those units, you may want to email me about an unlisted Cocoa Beach corner unit on a high floor, top to bottom decorator remodeled., similar size. Will be on the MLS in a few days but I can get you in before it hits.

  12. Thank you for your reply Larry. The "updated" one has had a kitchen wall removed but is still what I would consider far from updated. Both offers were in writing, one was around 12% off ask, the other 14% after we countered ourselves. Neither were countered, and quite some time spent chasing down lister. Rather frustrating. Is it in same building? I do have my agent I am working with. Thank you kindly!

  13. What did your agent tell you was fair value? In my opinion, your low offers telegraphed the seller that you were unlikely to get close to fair value. If you were willing to come up significantly, you should have started higher. In this market you aren't going to buy way below market value.

    Did you see 803 when it was on the market? It closed for $50,000 more than your offers and was in similar condition to the NE corner you offered on.

  14. Hi Larry - yes I saw 803, but felt it was more updated and "cleaner" than current listing, also one flight up. I am curious as to your thoughts on FMV on those units. In particular, what is the price/sf premium that one would expect to see in a corner unit as opposed to straight east exposure unit. What building is the renovated corner in? One of the tallest 3? Thanks

  15. I don't think you can accurately quantify a corner premium with a $/sf number. Too many variables. Corner units are usually larger than interior units and may have better or worse floor plans than the interior units. At 2100 the high corners are definitely more desirable because of the wrap balcony and abundance of glass and views. Considering the recent sale of 803 for $475,000 and the dearth of inventory, I believe either of the current listings is likely to attract an equal or higher price.

    I can't name the building yet.