Wednesday, March 13, 2024

It's On

Real estate sales are picking up as we move into peak snowbird season in Cocoa Beach and Cape Canaveral. In the last four weeks 77 condo and townhouse units have gone under contract in the two cities. Median asking price was $415,000 and median time on market was 50 days. Fifteen of those contracted in that period have already closed with eight of them closing within two weeks of contract. 

Current inventory of condos and townhomes is 261 units with a median time on market of 70 days and a median asking price of $430,000. Of interest to potential buyers, a quarter of the condos for sale have monthly fees over $800. We are seeing more and more fee increases as condo associations complete their milestone inspections and begin funding their new structural reserves. This trend of rising fees will continue through the end of the year as everyone comes into compliance by the Dec. 31 deadline.

During the same four week period, eleven single family homes found a buyer. Median asking price was $740,000 with a median time on market of 72 days. There are currently 41 SF homes actively for sale with a median 60 days on market and a median asking price of $970,000. A sad reality of our current market is the fact that there are no homes for sale asking less than $550,000. Potential new residents with a budget of less than a half million dollars are forced to look at condo or townhome units if they want to purchase a home. That condo alternative is not as attractive as it was in the recent past. 

Increasing carrying costs are impacting those who may be considering a condo as an alternative to a SF home. Of the condos asking between $300,000 and $500,000 with at least two bedrooms, over a fifth have monthly fees in excess of $800. Someone purchasing one of these units in the mid $400s with a 20% down payment will be looking at combined condo fees, property taxes and mortgage payment approaching $4000 a month. I suspect a lot of home searches are coming to a screeching halt once the potential buyers add up their likely costs.

Despite the higher carrying costs, sales are happening. I don't know if there is a point at which increasing costs will slow the condo market but if there is, we haven't gotten there yet. Good luck to all those looking. It would be prudent to be aware of the factors affecting condo fees and to do one's homework. If the fees are lower than average, there is a good chance that the new reserves are not being funded yet. They will be by the end of the year and that could turn a currently attractive $500 month fee into a $1000 a month burden. An exception to all this are the exempt condos, those in complexes with no buildings over two stories. Those condos do not have to do milestone inspections nor do they have to fund structural reserves. A nice unit in a well-maintained one or two story building is worth consideration if one can be found. 

"All mushrooms are edible, some of them more than once."

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