Sunday, March 25, 2018

Crossing T's and Dotting I's

A portion of another excellent Cocoa Beach mural on the north wall of Coconut's Fish Market.

Those tired of reading about bad listing agent behavior may want to skip this one.

Browsing my hotsheet one morning this week I notice a price reduction on a three quarter of a million dollar luxury oceanfront condo unit that's been on the market a little more than a month. I browse the photos to refresh my memory of the unit and to see if it really should command the still-high $350 per square foot price. It might, considering the remodel job, the fact that it's a corner unit and is being offered fully furnished. Problem is, I can't really tell from the listing photos because they appear to have been shot with a Kodak Brownie with Vaseline smeared on the lens. I know the listing agent would like to get a check for selling this listing but she's hampered the process with poor photos. Friction.

On the same hotsheet is another unit, same building that is more aggressively priced that has been on the market for 94 days and that has a newly accepted contract. It might have sold sooner had the listing agent bothered to put the condo name in the listing. Anyone doing a search for listings in this particular complex over the last 94 days wouldn't have found this one because it had no name entered. Friction.

In this day of universal access to the MLS and the syndication of listings to Zillow et al,  non-MLS marketing has become far less effective at selling specific listings. A marketing effort made by a listing agent in non-MLS media is good for every other comparable listing including those that do nothing but exist on the MLS. A buyer attracted to a Cocoa Beach condo by a slick ad in the Dubai Gulf News will almost certainly check the easily browsed comparable listings before making an offer. Knowing that, it is imperative that MLS listings be complete and with accurate descriptions and good photos. I cringe to think of the buyers who declined to view the first listing mentioned above because the photos made the unit look so dark and small or who missed the second because the absent condo name made it invisible in a search for that building.

Takeaway: Sellers should be concerned more with how their listing appears on the MLS than by fancy extra marketing efforts. A Wall Street Journal classified for a Cocoa Beach condo is less effective than good photos in the MLS. The appearance and content of a seller's MLS listing should take precedence over all other marketing efforts. Those who settle for crummy photos or bad descriptions are not taking full advantage of the current robust market.

"Mr. Gorbachev, tear down this wall." __Ronald Reagan

Sunday, March 18, 2018

The Dog Ate Your Showing Appointment

What is the best excuse a listing agent can give for not showing up to an appointment to show a luxury oceanfront condo? I tend to doubt the "I had car trouble and forgot to call" or "in the hospital" excuses that came from the same agent this week on two successive days to two different agents. She probably never dreamed that the agents, from different brokerages, would randomly mention their bad experiences with her to one another. Her client, the property owner, would probably not be pleased to know about that or that she refused to show the property another time this week with a 12 hour notice saying that the out-of-town buyers, if serious, should be willing to fly back down to see the unit when it was convenient for her. I'm waiting for "my dog ate the appointment calendar." Her friction to showing might explain why this attractively-priced property has been for sale for almost five months while other units are selling in less than a week. She may have agreed to a reduced commission rate and is regretting it after the fact and is just doing the minimum hoping for a miracle in spite of her resistance. Who knows?

Listings with easier access are selling fast. Since March 1, fifty-five condo units have gone under contract, twenty-five in a week or less on the market, ten of them asking $499,000 or more. All price ranges are active right now with waterfront, both ocean and river, especially strong.

There are currently 155 existing waterfront units for sale in Cocoa Beach and Cape Canaveral with another 12 to-be-built units offered. Asking prices range from $74,900 to $1.13 MM. For those looking there are possibilities. As always the ability to know what price is fair is paramount.

The old Cocoa Beach Publix that was torn down and currently being rebuilt is taking shape and we just heard that the newly remodeled Cocoa Beach Winn Dixie will not be among the 37 WD stores slated for closure in Florida. The Cocoa Beach City Commission has been discussing and taking public comment about relaxing the 45' height restriction and whether to allow dogs on the beach. Opinions on both sides of both issues are heated. Change is afoot.

"I overthink your punctuation use. " __Lorde

Monday, March 05, 2018

It's All About the Price

The striking mural above is on the west wall of Mainely Lobster downtown Cocoa Beach and is missed by most vistors to Cocoa Beach. It's one of my favorites of the several good murals scattered around downtown.

If the meager for sale inventory in Cocoa Beach and Cape Canaveral were magically repriced overnight to within 5% of fair market value, I suspect over half would sell in two weeks. The demand for property remains high but the supply of fairly priced listings is not enough to satisfy that demand. I'm amazed that so many sellers insist on crazy high prices and that agents are willing to take on those listings. Some agents do it knowing there's a good chance the owners will drop the price later when the market doesn't deliver a buyer. Others will take a listing that will never sell knowing it will garner inquiries from prospective buyers. When those buyers realize they can't negotiate a fair price on the over-priced listing they'll move on to something else. Agent finds them something else at a fair price, gets paid and the over-priced bait continues to attract fresh prospects. Rinse, repeat. For an agent willing to put in the time and with the skills to work this angle efficiently, the results can be worth it. The over-priced sellers can continue to hope for a miracle. In this rising market, appreciation will eventually catch up to all but the most optimistic fantasy prices. Other than opportunity costs and mortgage payments, our recent rate of appreciation has been enough to cover condo fees and property taxes for most properties. However, considering a boring S&P index fund returned over 20% in 2017, the opportunity cost was significant for those who rode the year out clinging to an unrealistic price.

The evidence for overpricing is overwhelming. Exactly three condos have sold in our two cities in 2018 for more than $300 per square foot. Two were beautiful units in newer buildings and the other was a beautifully remodeled corner on a high floor. All three were direct ocean, third floor or higher. There are units that are worth $300 a foot and higher but they must be special. Any unit in the Meridian or a new oceanfront building will bring over $300/sf but in the older buildings a unit must be in exceptional condition to cross that threshold. Example: I saw  a new listing in Emerald Seas last week asking $327 a square foot that was worth every penny of that, in my opinion, due to an exceptional total remodel and tasteful included furnishings. Congrats to the buyer that contracted that one. It's a beauty.

Looking at the inventory of condo and townhouse units for sale this morning I find 44 asking over $300 per square foot, 15 of them over $350/sf. Only a handful of these 44 are worth within 10% of their asking price. Not surprisingly, well over half have been on the market for over a year. Many of those have had their days on market manipulated to appear to be new listings. Some change their asking prices frequently to trigger inclusion on lists of price-changed listings. All it takes is a change of $1 lower or higher to trigger that inclusion. It will, however, take more than cute MLS tricks, marketing in Dubai, or the most beautiful agent in Florida to sell a property for 25% more than it's worth. I'm guessing the buyer of that funky unit close to the Pier asking $396/sf is not going to be willing to pony up that number no matter the "$80,000 native coral wall framing the ocean view".

It's exciting to get an email like the one below from the City. This was the warning last Friday.
And this below is the reality this morning, Monday, 10.8' with a 16 second period.

The forecast was spot on. The swell was showing already Friday and was filling in nicely by Saturday evening. It's off it's face this morning with double-overhead freight train lefts breaking well offshore. The angle of the swell is hard out of the north so those beaches north of downtown will be significantly smaller than the south beaches not shadowed by the Cape. Streets north of the Pier to the Port will be best for those wanting a more manageable size. Breaking waves should be significantly larger than the open ocean measure of 10.8' at locations south of downtown Cocoa Beach all the way to south Florida. The Reef Road break in front of Mar a Lago in Palm Beach should be one of the best and biggest. Be safe out there. We look to have a few days of epic conditions after the wind switches offshore tonight or tomorrow.

"The problem of the world is that fools and fanatics are always so certain of themselves and wiser people so full of doubts." __Bertrand Russell