Monday, January 16, 2023

The Year of Reckoning

Shuttle on the pad in 2011

There are 135 existing MLS-listed condo and townhouse units for sale this morning in Cocoa Beach and Cape Canaveral plus two units at The Surf, the almost-completed, new oceanfront building in downtown Cocoa Beach. New contract activity so far this year has been slower than we enjoyed through most of 2022 with only twenty two units going under contract since Jan. 1. During the same time 35 new condo listings hit the market. Sales activity typically spikes February through April every year so we'll have to wait to see if sales can overtake the flow of new listings during that period. Condo inventory got as low as 34 units for sale last March because of strong sales during that time. Half of the units for sale right now have been on the market for two months or longer including a bunch of weekly rental units that were selling like hot cakes last spring and early summer but have since cooled considerably. The AirBnB investment hysteria of 2022 appears to have lost momentum. 

As condos begin performing their newly mandated structural inspections and reserve studies this year I expect to see an increasing number of new condo listings as the impact becomes apparent. I think that impact will include lower selling prices. That's not a guarantee but higher monthly fees for most condos is almost a certainty. Those who live in older buildings with unaddressed concrete issues would be well-served to be thinking about how much the new structural reserve fund will add to their fees. Concrete restoration is costly and buildings that already have well-funded reserves will not escape the impact of the new reserve accounts. Prospective condo owners should include the possibility of substantially increased fees as part of their purchasing decisions. 

The launch of the Falcon Heavy yesterday evening was spectacular and the two boosters were visible  from separation to landing at the Cape. Next launch is Wednesday morning.

"Tell people what they want to hear and you can be wrong indefinitely without penalty." _Morgan Housel

No comments:

Post a Comment