Saturday, June 29, 2024

Trying to Reason With Hurricane Season

 After peaking in early June, the inventory of residential real estate for sale in Cocoa Beach and Cape Canaveral has pulled back somewhat. There are currently 278 condo and townhome units and 47 single family homes for sale on our MLS. Those levels are about 10% less than they were three weeks ago.

A total of 54 condo units have gone under contract since June 1. Median time on market before finding a buyer was 49 days and median price was $350,000. The median time on market for the remaining condo inventory is 79 days with a median asking price of $405,000 and a median monthly condo fee of $642. 

Forty nine condos and townhomes have closed so far in June with a median time on market of 61 days. 63% of them sold for cash. Only five of them sold for full original asking price or higher with the majority of sales at substantial discounts to original asking price. Median condo fee for the sold condos was $705 a month.

We are seeing more condos completing their milestone inspections and reserve studies with fees adjusting to fund the new reserves. Fees across the board including one and two story buildings which are exempt from the new reserve requirements continue to rise. The main driver pushing fees higher for the exempt buildings has been insurance premium inflation. For everyone else, in addition to more expensive insurance, it is funding the new structural reserves. One other expense facing some condo owners is paying for a new roof required by their insurance company to keep coverage. Our takeaway; the golden years of cheap Florida condo living are effectively over.

The median asking price of the 47 single family homes for sale is $875,000 with a median time on market of 64 days. Lowest asking price for a Cocoa Beach single family home right now is $599,000 and highest is $4.7 MM. Only seven homes have closed so far in June with a median price of $770,000. Three of those sold in the first five days on the market.

We are about six weeks away from a tidal change in the way buying and selling real estate will happen. Buyers will not be able to view properties without a signed representation and compensation agreement with the agent showing them the property. Buyers can no longer count on their agent being paid by the seller and will be faced with the responsibility of paying their agent at closing whatever they agreed to in the buyer's broker agreement. Some sellers may agree to pay some or all of the buyer's broker compensation but it is reasonable to expect some of them to offer nothing, pushing the burden of buyer's agent's pay onto the buyer. It's going to be interesting and seems reasonable to expect a lot of agents to fail in this new landscape.

Buyers, read that buyer's brokerage agreement carefully and know that it's all negotiable. This is especially true of the transaction (junk) fee so many agents try to push on their clients. Do not agree to transaction or brokerage fees despite an agent telling you that they are not negotiable. They are lying. Just say no or find a new agent. 

"History can definitely repeat itself if everyone concentrates very hard on making the same stupid mistakes." _Nelson DeMille