Sunday, April 24, 2022

Measure Twice, Cut Once

Snowbird season 2022 is behind us and all but a few of our winter guests have returned to their northern homes. Those who have only visited during the Christmas to Easter snowbird season might be shocked at the pace of life post season. Restaurants are no longer jammed, sidewalks are empty and a golfer can show up at the Cocoa Beach Country Club without a tee time and be assured of getting a round in. We'll enjoy a month or so of this before the summer vacation season takes off in earnest on Memorial Day weekend. 

Real estate sales are somehow keeping the pace despite depleted inventory and crazy, high prices. We have a total of 55 existing residential properties for sale this morning in Cocoa Beach and Cape Canaveral. Just twelve of those are single family homes. In the last two weeks, 57 sellers accepted an offer, most of them choosing from multiple offers. That works out to a 16 day supply at the current rate. That would seem unsustainable except for the fact that we've been maintaining this precarious pace for a few years. Ever-higher prices are reflecting the skewed demand/supply dynamic. 

Of the 75 properties that closed since first of April, 31 of them closed for more than asking price, several for considerably more. Weekly rental oceanfront condo units continue to set records. Among those that raised my eyebrow was a 4th floor furnished 2/2 at Canaveral Towers that  closed for $696,000, which was $46,100 over asking. This seems crazy for a 47 year old unit without a garage but the magic comes from the ability to do weekly rentals at Canaveral Towers. The current sky-high weekly rental rates for nice oceanfront units helps the math pencil out even at these astronomical selling prices. Another weekly rental 2/2 next door at Cape Winds closed for $530,000 with a side ocean view and no garage. A north facing Sandcastles 2/2 weekly sold for $575,000, $46,000 over asking while a direct ocean Sandcastles 2/2 brought $645,000.

The weekly rental condos weren't the only ones setting records. A Windjammer direct ocean 2/2 sold for $532,000, $7500 over ask while a 59 year old Diplomat 2/1 with no view or garage sold for $300,000. Single family homes are likewise setting new records with selling prices. There is only one single family home in our two cities asking less than $550,000.

One disturbing trend I have recently noticed is incorrect square footage of condo listings. Two of the sold listings I mentioned above had inflated square footage in the MLS listings and there was a new one this morning that overstated the size by 14%. This is deliberate on the part of the listing agent and I can think of no reason other than to deceive potential buyers. Perhaps the sellers are convincing the listing agents that the tax record is incorrect and the agents go along with it rather than lose the listing. Whatever. Be careful out there and don't trust everything stated in a listing. It's easy to confirm the size with the tax record.

If something looks irrational – and has been so for a long time – odds are you have a wrong definition of rationality.” __Nassim Taleb