Friday, January 28, 2022

Waiting in Vain

After trending up for a few months the inventory of residential properties for sale in Cocoa Beach and Cape Canaveral is shrinking again. There are only 60 individual residential properties for sale this morning in our two cities, 47 condos and townhomes and 13 single family homes. In addition, there are another seven unbuilt luxury homes offered by reservation in the much-delayed planned community on the river in south Cocoa Beach. 

Activity has been non-stop with 68 condos receiving an accepted contract since the beginning of the year. If the sales rate continues at this pace, the entire existing inventory of condos will have sold by Valentine's Day. Resistance to crazy high prices has all but evaporated and frustrated buyers have been paying prices that can't be justified by earlier sales. In the last two months seven oceanfront condos have sold for more than $400 a square foot, four of them without a garage. These prices put us in unexplored territory. Can prices continue to go up? Sure. Can they reverse course? Same answer. Buyers looking for return on investment can easily calculate whether current prices work with expected rents and occupancy. Those looking for a beach get-away for their family or for a primary residence should be more concerned with the property itself than with where prices are at the moment. I've watched careful buyers wait years because they thought prices were too high and would be correcting. For the last fifteen years or so those buyers either had to reframe their expectations or they never bought. Waiting for a correction that is slow in coming might mean not making memories at the beach during years when it would mean the most. Everyone has to decide for themselves. Paying 10% more than one thinks a unit is worth today will probably be inconsequential years down the road, especially if those years have been spent enjoying the family beach place that Mom and Dad overpaid for. Bob Marley may have been talking about this when he sang, "'summer is here, I'm still waiting there." 

"Let me be clear about this. I don't have a drug problem. I have a police problem." __Keith Richards