Wednesday, December 18, 2019
During the peak of distressed sale activity in 2011, 71% of all condo sales were cash, no mortgage. Some of that was because lending standards had tightened considerably since the fiasco period of NINJA (no income, no job or assets) loans of the early to mid 2000s. That percentage of cash buyers has slowly declined since and we look to have just over 50% of all condo sales in 2019 close for cash. The busiest year for sales during the decade was last year when we closed 734 units. I expect us to end 2019 with just under 700 units closed. It's a remarkable number considering inventory has hovered right around 200 units all year.
In 2009 six units at the two-year old Meridian closed for less than $600,000, the lowest for $510,000. A third floor 3000 square foot unit at Riomar in south Cocoa Beach closed for $550,000 and someone picked off a 6th floor direct ocean 2419 sq ft Constellation unit for $395,000. Prices in most complexes were well off the highs of 2006-2007 but would continue to drop for another couple of years. Even so, everyone who bought then and held on has done well. For what it's worth, the S&P 500 has just about tripled in the same ten year period.
Of the 663 units closed so far this year, 129 of them sold in the first week on the market and 42% closed within the first month. Just over half were purchased for cash even though mortgage rates are only about a third of a point above the all time low reached in 2012. There remains good demand for the low number of properties available and barring some macro event that would affect activity I see no reason to expect the upward trend in prices of the last seven or so years to slow. The advice for buyers is the same as it has been; know what you'd like to have and how to estimate what it is worth and don't hesitate to offer when that property is found. Forget lowballing in hopes of stealing something. That just ain't gonna happen. Chances are that there are several other prospective buyers looking at the same property. It's not necessary to overpay but it is extremely unlikely that you'll be able to purchase something for less than current value. Starting low may give another buyer time to get their offer in while you're negotiating up from your lowball number. A multiple offer situation is to be avoided if possible.
2019 has been a year of positive changes for Cocoa Beach. We finished our new parking garage downtown and several new restaurants opened downtown. The old Casablanca bar across from City Hall was gutted and turned into a swanky wine bar, Napa Beach Bubbles Bar. Those who remember the Casablanca need to stop by for a look and a drink. Prepare to be amazed at the changes. Another notable new addition is the 4th Street Fillin Station. The old gas station at the corner of 4th St. N. and Orlando Ave. has been transformed into a hip restaurant and bar with a huge backyard and indoor seating and bar in the old repair bays. It is kid friendly and has lots of good vegetarian options with a beer menu of several pages. It demands a visit. A new oceanfront condo project has been announced downtown between Minutemen Cswy and 1st St. North. Prices from $800,000 to $2.2 MM.
It was an exciting year for the space business at the Cape. We saw SpaceX launch a Falcon Heavy and successfully land all three stages, two on land and the other on the drone ship, Of Course I Still Love You. The Boeing Starliner crew capsule is planned to launch in a few days for an unmanned mission to the International Space Station in preparation for future manned missions. SpaceX began delivering its Starlink broadband satellites to orbit with a mind-boggling sixty satellites deployed from one launch vehicle. They expect the network of several hundred satellites to be functional and delivering satellite based broadband internet service by the end of 2020. The Boeing X-37 Spaceplane landed in October after 780 days in orbit. Jeff Bezos' space company, Blue Origin, has been busy with test flights and doing a massive expansion of their existing facility at the Cape. They completed their 12th suborbital test flight and landing last week of their New Shepard vehicle which is designed to carry astronauts on future missions.
Merry Christmas and best wishes to everyone as we wind down 2019 and prepare to launch into a brand new year. If you find yourself in Cocoa Beach, stop by our office downtown and say Hello.
"Don't blame the Clown for acting like a Clown, ask yourself why you keep going to the Circus."___Anonymous