Slowdown

Inventory of residential real estate for sale in Cocoa Beach and Cape Canaveral has increased more than 150% since April this year but the pace of increase has slowed in the last couple of months. I'm not seeing much softening of selling prices but new contract activity has slowed significantly. Closings lag contracts by several weeks so the impact of this slowdown will become apparent next month. If the slowdown continues, sellers will be forced to temper their optimism if they hope to attract attention from a dwindling number of buyers. While Ian's impact locally was very limited, I think it's reasonable to assume some reduced buyer enthusiasm from the media coverage of Ian's damage and impact on the future cost of insurance for Florida properties. We had a couple of false slowdown alarms earlier this year so we may be back off to the races by Christmas. I do not expect selling prices nor pace of sales to maintain their vigor but I have been wrong before. Participants are encouraged to weigh the available evidence before jumping into this market.

There were sixty closed sales of condos and townhomes in our two cities in the month of September. Prices ranged from $1,585,000 for a remodeled 22 year old oceanfront corner 3/3 at Solana Shores to $129,400 for a 64 year old, 338 square foot 1/1 a block from the ocean in south Cocoa Beach. Median selling price for condos was $385,000 with a median dollar per square foot of $333. Three years ago only the nicest, remodeled direct ocean units with garages were bringing over $300/sf. In September there were 17 sales of condos for more than $400/sf.

There were 14 closed sales of single family homes in September. Prices ranged from $2 MM for an oceanfront Cocoa Beach home on a double lot to $415,00 for a small, fixer-upper in north Cocoa Beach probably destined to join the swelling ranks of AirBnB properties locally. If the conversion of single family homes to vacation rentals continues much longer Cocoa Beach schools are going to be without a source of students. This is a growing problem without an obvious solution. Municipalities in Florida are prohibited from banning vacation rentals. The City of Cocoa Beach has been discussing strategies for dealing with the issue but there doesn't seen to be an easy fix.

I have recently heard a couple of stories of new homeowners being surprised that their property tax bill was significantly higher than the previous owner's. They had expected, because the seller was homesteaded at a low rate, that they could homestead and continue to enjoy that artificially low rate. That's not how it works. Once a homesteaded property is sold, the taxable value is increased to current levels and taxed accordingly. When the new homeowner homesteads that property they get a reduction in taxes from that new, higher level and, more importantly, a cap on the annual increase in taxable value. Do not expect to pay the same low property taxes as the long-time, homesteaded seller even if homesteaded again post sale.

"It's hard to accept the truth when the lies were exactly what you wanted to hear." _unknown